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	<title>Tim KastelleSchumpeter &#038; Keynes on an Innovation Dilemma &#8211; Tim Kastelle</title>
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		<title>Schumpeter &#038; Keynes on an Innovation Dilemma</title>
		<link>https://timkastelle.org/blog/2012/07/schumpeter-keynes-on-an-innovation-dilemma/</link>
		<comments>https://timkastelle.org/blog/2012/07/schumpeter-keynes-on-an-innovation-dilemma/#comments</comments>
		<pubDate>Thu, 05 Jul 2012 08:06:33 +0000</pubDate>
		<dc:creator>Tim Kastelle</dc:creator>
				<category><![CDATA[innovation strategy]]></category>
		<guid isPermaLink="false">https://timkastelle.org/blog/?p=5127</guid>

				<description><![CDATA[John and I were talking last week with a CEO for whom we were doing some consulting. His firm had gone through some major stress during the project when their primary customer switched suppliers. The company is remarkable &#8211; they are in a traditional industry with a history of poor workforce relations. Despite this, they [&#8230;]]]></description>
					<content:encoded><![CDATA[<p>John and I were talking last week with a CEO for whom we were doing some consulting.  His firm had gone through some major stress during the project when their primary customer switched suppliers.  </p>
<p>The company is remarkable &#8211; they are in a traditional industry with a history of poor workforce relations.  Despite this, they have been very successful in implementing a lean production system.  One feature of this has been that they have reorganised their entire manufacturing plant into teams, and then delegated a huge amount of decision-making authority out to the teams.</p>
<p>Everyone else in their industry thinks they&#8217;re nuts.  And so did their main client, which appears to be part of why they lost that contract.</p>
<p>Pulling out of that contract was stupid though &#8211; the company has successfully reduced operating costs by 10-20% as a result of their lean program. The client didn&#8217;t leave due to outcomes, which were excellent and getting consistently better.  They left because the company wasn&#8217;t acting the way they were expected to.</p>
<p>It&#8217;s as though they are acting out this quote from John Maynard Keynes:</p>
<blockquote><p><b>Worldly wisdom teaches that it is better for reputation to fail conventionally then to succeed unconventionally.</b></p></blockquote>
<p>The issue isn&#8217;t whether or not the company is succeeding or failing, but rather that they are doing things unconventionally.</p>
<p>That&#8217;s pretty scary.</p>
<p>And it raises an important issue.  Doing things that are look weird scare people off.  Yet, we have to be a bit weird to innovate.</p>
<p>That&#8217;s scary, and it&#8217;s also hard work.  Consider this quote from Joseph Schumpeter:</p>
<blockquote><p><b>Carrying out a new plan and acting according to a customary one are things as different as making a road and walking along it.</b></p></blockquote>
<p>Making a road is a lot harder than walking along one.  But innovators break new ground &#8211; they have to.</p>
<p>I grabbed my cat named Schumpeter and thought about what we can do.</p>
<p><a href="https://i0.wp.com/timkastelle.org/blog/wp-content/uploads/2011/12/meandschumpeter.jpg"><img data-recalc-dims="1" fetchpriority="high" decoding="async" data-attachment-id="3766" data-permalink="https://timkastelle.org/blog/2011/12/two-reasons-why-you-must-change-your-mind/meandschumpeter/#main" data-orig-file="https://i0.wp.com/timkastelle.org/wp-content/uploads/2011/12/meandschumpeter.jpg?fit=540%2C720&amp;ssl=1" data-orig-size="540,720" data-comments-opened="1" data-image-meta="{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;}" data-image-title="meandschumpeter" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/timkastelle.org/wp-content/uploads/2011/12/meandschumpeter.jpg?fit=225%2C300&amp;ssl=1" data-large-file="https://i0.wp.com/timkastelle.org/wp-content/uploads/2011/12/meandschumpeter.jpg?fit=540%2C720&amp;ssl=1" src="https://i0.wp.com/timkastelle.org/blog/wp-content/uploads/2011/12/meandschumpeter-225x300.jpg?resize=225%2C300" alt="" title="meandschumpeter" width="225" height="300" class="aligncenter size-medium wp-image-3766" srcset="https://i0.wp.com/timkastelle.org/wp-content/uploads/2011/12/meandschumpeter.jpg?resize=225%2C300&amp;ssl=1 225w, https://i0.wp.com/timkastelle.org/wp-content/uploads/2011/12/meandschumpeter.jpg?w=540&amp;ssl=1 540w" sizes="(max-width: 225px) 100vw, 225px" /></a></p>
<p>Here are a couple of ideas.  If we are the innovators, we simply have to be ready to do the work.  And we have to be ready for people to think that we&#8217;re weird.  Both of these are challenging, but the payoff is pretty good.  Making a difference is worthwhile and rewarding.</p>
<p>If you&#8217;re managing innovators, you must do all you can to protect them from the fallout that being weird attracts.  Removing obstacles for your people is a fundamental but often overlooked management role.</p>
<p>I&#8217;ll also recap one idea that I had in a previous post:</p>
<p><b>Be extra vigilant for conventional failures</b>. These are hard to spot because people who are failing conventionally will look normal, or average.  This is the outcome of the saying that I kept running into back in my photocopier days &#8211; &#8220;no one ever got fired for buying Xerox.&#8221;  But if Xerox isn&#8217;t the best choice (and they weren&#8217;t then), then someone should be getting fired for buying Xerox.  Or you should at least have a word with them&#8230;</p>
<p>Keynes and Schumpeter didn&#8217;t agree on a lot, but both talked about the challenges you face in getting new ideas adopted.  It&#8217;s never easy.  </p>
<p>Nevertheless, we should be thinking about what new roads we can make.</p>

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