Dictionaries tend to define innovation as the creation of something new. When spoken by CEOs and business managers, I don't believe this is what they have in mind. I believe they are talking about cost cutting. A recent news item crystallized this issue for me.
Dell Computers is getting rid of 8,000 jobs in Texas. "While reductions in headcount are always difficult for a company, we know these actions are critical to our ability to deliver unprecedented value to our customers now and in the future," said Michael Dell in a statement. They say they have too many employees. I say, they have too few customers.
In a past forum, he also said "It's all about speed, learning, and coming up with product innovation, services innovations faster." No hint of job cuts here. Unfortunately, true innovation might challenge Dell’s business model. But, few businesses today would dare to tamper with their business model. A past incident makes folly such reverent protection.
I needed a new laptop. I owned a Dell and, for travel, an extra transformer. My suggestion to buy another Dell, so I could reuse it was met with laughter by my coworkers. Some months before, they had been at a conference. All had Dell laptops and one transformer burned out and became useless. In panic, the others found that their transformers were not compatible. They did not have matching plug designs. Dell's business model forced buyers to buy new transformers along with their new laptops.
Neither is Dell alone in such innovation fraud. Hewlett-Packard does the same with cartridges for their printers. Each new model requires a new, incompatible ink or toner cartridge. All printer manufacturers have the same business model. I can imagine that some model changes are ONLY to make old cartridges incompatible, and their inventories unusable. That office supply commercial rings true. The one with people standing around a store employee calling out cartridge numbers. Waiting, like in a lottery, for their number to come up.
Imagine what the outcome had been if my coworkers had found they had compatible transformers. Every new laptop would be a Dell. As it turned out, they said they would never buy another Dell. What a wonderful business model. Sell an extra transformer; lose out on selling many more laptops. Such wisdom smacks of the manufacturing story. The one where the plant manager admits that he loses a bit on each product sold. But, figures he will make it up on volume.
CEOs scream for innovation, and it is right under their noses. It is innovation that helps CUSTOMERS. I think that is the true meaning of innovation. Helping customers.
