INNOVATING FROM A KNOWLEDGE LENS
It all started in a farm in Dearborn, Michigan. When the new century started, cars were very much regarded as luxury goods, only affordable for big fortunes. It was in 1908 when Henry Ford first introduced his most famous ever car, the Model T. The A-side of the story is well-known, but it is worth a read. Ford streamlined the existing manufacturing processes, so he could cut costs down and shorten the production time. By so doing, the price of this new car was now attractive to the middle class. Ten years later, cars were goods of massive consume. The Tin Lizzie, as it became popular among consumers, was based in an innovation: a breakthrough innovation focused on the development and exploitation of new technology. This example has been used in countless times to illustrate how an innovation can dramatically change the existing ways of working.
The B-side of the story remains too often somehow forgotten. At that moment, General Motors (GM), another automotive company based in Michigan, was no rival for the Dearborn giant. Actually, when Alfred Sloan joined it, GM was a kind of jumble. But when Henry Ford closed his eyes and stopped looking around to see what was going on in the market - Ford only manufactured one model up to the mid twenties – GM decided to start selling “a car for every purse and purpose" as Sloan explained it in 1924. Despite the fact that no such a remarkable innovation as the Ford’s one was developed in the company born in Flint, only thirty years after the introduction of Model T, GM was already leading the market. Furthermore, by the middle of the century their sales represented nearly half of the American trades, even doubling those of Ford.
GM outperformed Ford throw the means of innovation. While Henry Ford systematically denied the need for a change, Alfred Sloan saw the opportunity to do business in a new way. The cornerstone of his success was to innovate not in better products but in the way a company should be managed. Therefore, he innovated from a knowledge lens.
It is widely accepted that we live in a knowledge-based society. Thus, innovation is in the foundations of economic growth and social wellness. This text addresses the question of “to what extent, innovation is not a matter of telling the customers what we can offer them, but of listening what they actually want us to offer them”. Nowadays, it is quite common that companies insist in launching new products that diverge from the social demands. The above tale shows us how by understanding and exploiting the information that customers provided, GM was able to deliver an improved product. In other words, innovation is a two direction path, where creating must be preceded by learning. In this sense innovation does not rely so much in inventing but in listening and observing. That is the way to widen what we know and use to build a better future.
Be the first to comment on this contribution.