How do we break this cycle of boom and bust?

Late last month we held another very successful AMT Global Forecasting & Marketing Conference. The theme of the conference was “Make Your Own Future,” and we learned much to help us do just that in the coming months and year.

Here is some food for thought. Are you satisfied with your new product development and R&D activities? Do your competitors surprise you with new, state-of-the-art products or services? Does new product development find itself playing “second fiddle” to delivery and production requirements in your company? Is product development sometimes concentrating on projects that linger, or that will not monetize when they are completed?

If you answered yes to one or more of the above questions, then you are like the vast majority of manufacturing equipment and services companies. Especially during these challenging economic times where we are experiencing great fluctuations in market growth and shrinkage, it is common that new product development and R&D take a back seat to current delivery requirements. During the good times, we focus all of our efforts on current production needs and managing growth. Then when things slow, we struggle to invest in new products as we deal with right-sizing to the current production requirements.

How do we break this cycle of boom and bust? How do we bring innovation to the forefront of our companies? These are very important, in fact crucial, questions for small and medium-sized manufacturers. We do know for sure that no one will do this for us. We must do it for ourselves and time is of the essence.

All companies go through business life cycles that are primarily driven by their product/market life cycles, and the first step in getting better is to understand where you are on that life cycle curve. It is important to honestly assess where you are and face it head on.

It is obvious that we all want to “ride the wave” and to introduce new products and services at the “right” time in the life cycle. That time is while the wave is on the up curve, or just beginning to crest, but all too often we find ourselves somewhere on the down curve scrambling to come up with the next best product or service.

The ideal business case looks something like the graph below, which portrays an ongoing introduction of new products and services.

We have embarked on a journey to integrate innovation, new product development and R&D into the very fabric and DNA of our company.

The strategic goal is to have an ongoing stream of meaningfully unique new products, new services, and new customers and markets that have the highest probability of success. In addition, attention is paid to identifying and implementing more profitable business processes within our company. The intent is to increase the speed of innovation and decrease the risk.

To accomplish this, we are using the Innovation Engineering Management System (IEMS) that has been developed by Eureka Ranch, and is distributed by the Manufacturing Extension Program (MEP).

We are working with our local MEP center, TechSolve. By using a systemic approach to innovation, it forces the company to organize around this important business process, to invest resources and to encourage involvement by every team member in our organization. It takes time, resources, vision and energy.   

We are about 10 months into this journey and you may be asking, “Have you developed that blockbuster product of the future?” The answer is no, not yet.  We have, however, made some very significant process improvements – process improvements focused on our customers and not on us! On the product market side, the innovation idea pipeline is filling up with more than 100 innovation ideas, and we have active projects in the Define, Discover and Deliver stages of the process. We are dedicating more resources to the innovation process and to new product development. The confidence is high that new product introductions will occur in the near future and that they will continue for years to come.

Additionally, what is very evident is that there is a growing sense that the company is becoming deeply engaged in the IEMS process. The cultural change toward a customer and product/market focus is very exciting to watch. It is very rewarding to see team members step forward to take on additional responsibility and to do it with a sense of pride and willingness.

This is not easy – it is challenging, hard work. It requires the vision and commitment of top leadership and it requires lots of communication at all levels of the company. It requires thinking in new and different ways. It requires flexibility and patience as new things are discovered and new ground is covered.  Remember that this is a journey and not a destination – the work will never be done.

Difficult to achieve, but the rewards will be great. The future holds a more profitable business with consistently new and better products and services, and a corporate culture that is defined by never-ending innovation dedicated to the success of our customers. We are making our own future!