Wednesday, July 14, 1999
Wednesday, July 14, 1999 |
| Innovate
don't exterminate By GREGORY SMITH Many large businesses suffer from short-term management thinking. Some companies are more concerned about the welfare of their stockholders than the welfare of their employees. When trying to keep the business afloat the first response should not be to throw the crew overboard. Not all corporations are led by shortsighted executives who only think about their stock prices and annual bonus checks. They are some excellent organizations that are led by responsible people like Rubbermaid, for example. Rubbermaid is one of the most innovative and profitable companies in the world today. Rubbermaid is faced with all the same problems as other large corporations like cutting costs, global competition, quality and changing trends. However, compared to other large corporations, they lead using a more innovative management philosophy. They view their people as assets, not liabilities. The proof is in the pudding. Consider the following. They generate 400 new products a year-almost one new product a day. Products from the past five years contribute to 33% of their sales. They own 5,000 different products and do business in more than 100 countries around the globe. A few years ago earnings broke all records totaling $1.8 billion. Not too shabby when you think all that money comes from mundane stuff like mop buckets, bird houses and mail boxes. Innovate Not Exterminate-Success rarely comes from luck. Rubbermaid combines a mixture of science, creativity, innovation and good old-fashioned intuition. Capture Ideas-Rubbermaid is a literal innovative hotbed of ideas. They send their workers to off-the-wall places, like museums to study the Egyptians to get new product ideas. The CEO,Wolf Schmitt, once visited a kitchen in China and discovered they were using ordinary rubber spatulas to stir fry food. Subsequently, they went back and created a heat-resistant plastic spatula that withstands 500-degree heat. They are working on a special bird feeder that uses a microchip to broadcast bird chirps into the owner's house. Every year they look at 2,000-4,000 new ideas sifting them down to the ones that can make money. Team Approach-Their organization is designed like a plant or tree. Instead of the usual departmental approach, they structure themselves based on process. They have approximately 20 teams responsible for coming up with new products. One team may only look at commercial/office products and another team responsible for bathroom products. Each team consists of five to seven people (one each from manufacturing, R&D, marketing, finance, and other departments) This team structure minimizes delays, approvals and the bureaucracy normally associated within the traditional style organization. Pressure from Wall Street: Like other companies, Rubbermaid feels the pressure Wall Street generates to cut costs and improve earnings. Several years ago, when Wall Street put pressure on Rubbermaid to cut costs,Schmitt's approach was radically different. Instead of firing his employees, he decided to hire an additional 300 people. So they went about and started hiring culturally diverse, young managers, mostly from foreign countries—going after the global market. The reason—Greater diversity leads to better ideas. New ideas ideas lead to new products. New products create more profit. Greater profits create job security and everyone lives happily ever after. Schmitt realized that the best way to improve profits is not to cut the workforce but to improve productivity and innovation. He said if we cut out people “we would give up our future.” I guess that's why Rubbermaid has made the “most admired company” list over the years. In conclusion, I can't help but add one of my own maxims. “If you want to innovate, you can't exterminate.” Free by e-mail/fax: If you would like a free article on how to make your company more innovative, please fax us your name on you letterhead with the words, “Innovate” to 770-760-0581 or e-mail us at greg@chartcourse.com. Gregory P. Smith speaks at conferences, leads seminars and helps organizations solve problems. He leads an organization called Chart Your Course International located in Conyers, Georgia. Phone him at (770)860-9464 or send an email at greg@chartcourse.com.More information and articles are available at www.chartcourse.com. ++++++++++++++++++++++++++++++++++++ Chart Your Course International is a training and management development company preparing people today for tomorrow's new business horizons. Gregory P. Smith is the President, Lead Navigator and the Captain of the Ship. He is the author of The New Leader, and How to Attract, Keep and MotivateYour Workforce. For more information or for a free monthly newsletter call (770)860-9464 or sail an email message to greg@chartcourse.com. Visit our award winning website for helpfull articles, tips, newsletters. Available at
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