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Management

Henry Ford’s model of ‘change’ remains a pillar of innovation in business

‘Open innovation is a solution that can benefit all types of businesses’

PUBLISHED : Saturday, 26 August, 2017, 10:00am
UPDATED : Sunday, 27 August, 2017, 1:15pm

When business is ticking along, it is tempting not to question the status quo. There are plenty of adages to support this view. You’ll often hear management 101 advise to “stick to your knitting” or to follow a plan of “if it ain’t broke, don’t fix it”.

But that’s precisely how businesses have been left behind. When the Ford Motor Company launched the Model T in 1908 there were already other automakers selling cars. Yet Henry Ford’s car stands out in history because Ford reinvented the way to build cars.

His factory innovation was to take the work to the men instead of the men to the work – it was the conveyor belt. Thanks to the manufacturing solution, by 1914 Ford produced about 300,000 cars with 13,000 employees, while 299 other companies with 66,350 employees produced about 280,000 vehicles.

Since then, this story has been a text book example of the transformative value of innovation – but typically most companies have tried to develop big bang theories by themselves. That is until recently, when “open source” and “open innovation” became buzzwords.

Open innovation is what it sounds like it is. Everything from the inspiration to the brass tacks details can come from anyone to quickly develop and commercialise new offerings. By directly engaging with outsiders - consumers, suppliers, universities and even competitors - businesses can pull from a variety of sources to develop differentiated products and services.

How to open up to innovation?

Start by casting the net wide but picking your partners carefully. In Hong Kong, Accenture runs the FinTech Innovation Lab Asia-Pacific, in which start-ups go through a 12-week mentoring programme with participating financial services companies. This gives the start-ups an opportunity to develop their products and services offerings and gives financial services firms exposure to the latest ideas in the marketplace. There are also cross-industry, government incubator programmes such as the Cyberport Accelerator Support Programme, as well as university-led initiatives that pair up businesses with students, which give companies exposure to new ideas.

Bigger companies could launch their own initiatives. Haier, for example, has five research and development centres in the United States, Europe, Japan, Australia and China that form a company-wide global innovation resource network. It also has an open online platform known as HOPE (Haier Open Partnership Ecosystem) that encourages open source innovative solutions and has resulted in the development of new products.

For large companies, whether you are collaborating with eco-system partners, start-ups or peers, to succeed you need to truly invest in the programme. You need genuine management buy-in from the C-suite to the IT team to entry-level staff, and an eyes-wide-open attitude. Ensure that your management team are not just aware of and believe in the value of the opportunities, but also embrace them.

Once you have identified a project, for assimilation and application to work senior executives on both sides of the collaboration table need to be honest about their strategic goals, and the potential problems of implementation. Hiding the ball – be it a technological challenge, an operational hurdle or a logistics nightmare, helps no one.

Open innovation is a solution that can benefit all types of businesses. It can help multinationals that welcome startups, university students and eco-system businesses into their fold to assist in improving processes, rethinking services, products and customer interaction. And it can help smaller companies gain access to new markets. But no matter what seat you are in, it is important to remember that “open” is part of the language for a reason. You need to be open to new ideas, open to cooperation and collaboration and open to challenges.

And remember – you can stick to your knitting and at the same time fix something that ain’t broke. That’s exactly what Henry Ford did when he applied the conveyor belt to making the Model T car. He stuck to manufacturing cars but he re-envisioned how to do it.

Gianfranco Casati is Accenture’s group chief executive for growth markets

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