The downturn hasn’t dampened manufacturers’ enthusiasm for innovation, with some even putting more emphasis on it. But management problems continue to impede progress.
The Great Recession has affected many things in the manufacturing industry during the past year and a half. The industry has shed more than 2 million jobs, many companies have suffered significant financial losses, and some have had to close their doors. But the downturn has also motivated manufacturers to fight back, to find new and better ways of doing things.
Simply put, a heightened passion for innovation has given many manufacturers a way to turn their economic prospects around. Whether it’s identifying new products, entering new markets, improving operations, or coming up with a better way to please customers, the idea of innovation has become a rallying cry for companies of all sizes.
In fact, a new, exclusive Managing Automation/Manufacturing Executive reader poll suggests that over the long months of the recession, a sizable number of manufacturers — more than one-third of the survey sample — have been placing a greater emphasis than in the past on generating new ideas that can benefit the business (chart 1). And more than one-quarter also say that despite the pressures of the recession, they have held fast in their innovation efforts.
This is just one of the key findings of MA’s third annual reader survey on innovation, devised in collaboration with futurethink, a New York-based innovation consultancy. More than 270 readers of Managing Automation in the United States and Manufacturing Executive, MA’s sister publication in Europe, weighed in on how their companies generate new ideas, develop innovation strategies, and manage innovation processes.
One of the more encouraging indications from this year’s poll is the time horizon within which manufacturers envision and plan for the future. Rather than falling back on a quarter-to-quarter horizon, which would be a natural reaction to the recession, more than 70% of survey respondents say their planning parameter is one to five years, with more than a quarter, 26.4%, saying that their window is three to five years (chart 4).
Moreover, a strong majority, 60%, indicate that their path to the future is based on a strategic plan that includes research and market insights. At the same time, more than one-quarter of respondents say they are devising multiple contingency plans in order to allow for greater flexibility. Nevertheless, when asked several questions about how they think about the future — a new area of inquiry in the survey — 43% of respondents say it is important for their companies to develop a vision of that future and create desired change.
Are manufacturers doing this in an organized, systematic way, measuring their progress as they go along? The answer, as evidenced in prior years’ surveys and again in this year’s poll, reveals a number of paradoxes.
One of the most interesting has to do with the source of new ideas. Contrary to such popular present-day management theories as collaboration, nearly 46% of survey respondents say that future-oriented ideas emerge more often from a few individuals than from teams formed for that purpose (chart 3).
In addition, while a majority again this year strongly agrees with the statement that innovation is a key strategic initiative for their companies (chart 7), fewer than one-third again say they have a core set of metrics in place to determine whether innovation efforts are effective (chart 8).
Similarly, a majority of respondents say that customer needs drive idea generation (chart 5), but less than 10% say they use anthropological or ethnographic research to discover what those needs are (chart 6).
