16 Apr Visions: Innovating like Madonna and Willie Nelson (and Steve Jobs)
Milwaukee, Wis. – Oren Harari is coming to Milwaukee next week for a very simple reason – to convey the importance of innovation.
Not just to manufacturers, who he will be addressing at the state’s annual Manufacturing Matters conference, but to business organizations in a number of sectors, including technology.
Based on his latest book, Break From the Pack: How to Compete in a Copycat Economy, he intends to deploy some provocative props – Madonna and Willie Nelson.
Innovation, he said, gets paid a lot of lip service, but to actually drive constant innovation as a critical part of business strategy, operations, recruiting, and leadership is “absolutely essential” in a global economy where competitors from abroad can do routine commodity work at a cheaper price. The only way to stay on top of the food chain is to break from the pack by creating extraordinary and unique products and services that add value for customers.
“The only way that’s going to occur is through constant innovation,” Harari said. “So I think there is a huge opportunity for manufacturers, especially smaller manufacturers that at this point might be feeling a lot of concern about economic conditions. I think with innovation and building innovation into their organizations, there are really substantial opportunities.
“On the flip side, failure to do that, basically playing price-war games, or trying to rely on either lobbying or legal protectionism or attempting to just mimic rivals, I think is a loser’s gambit.”
Convergence of forces
Harari, who teaches in the graduate school of business at the University of San Francisco, got the idea for the book through his work with companies. Although there are differences across industries, he found some common threads, anxieties, and challenges. He also discovered that the convergence of forces like deregulation, globalization, technological advances, transparency, and fragmentation are leading to increased commoditization of products and increased imitation of services, regardless of industry.
Having gleaned all that, he came up with a label – the copycat economy – for which relentless innovation is the only antidote. When he speaks to Wisconsin manufacturers, Harari will tell them that they can have Six Sigma programs, mergers and acquisitions, and marketing campaigns, but if they don’t help them get beyond the problems of imitation and commoditization, they will do no good.
To leapfrog over them, and avoid narrower margins and eroding customer loyalty, he recommends adherence to what he calls the “Madonna Effect” and the “Willie Nelson Principle.” He not only talks about Madonna and Willie Nelson, but also business leaders like Sam Palmisano at IBM and Steve Jobs at Apple who, knowingly or unknowingly, have done precisely what Madonna and Willie Nelson have done.
Madonna, with an eye for trends that others haven’t yet seen, continually reinvents herself by latching on to those trends, harnessing them, packaging them, innovating around them and, in effect, creating a temporary monopoly on them. In much the same way, Willie Nelson and Waylan Jennings introduced the concept of outlaw country music, and Apple CEO Steve Jobs built a market for online music.
While music companies reacted to the trading of songs online by circling the wagons to protect their existing cash flow, Steve Jobs found a way to capitalize on something that he sensed would one day become a conventional business, Harari explained. Jobs developed ways to brand it, innovate around it, and dominate the market with it.
In so doing, he did more than launch the iPod and iTunes platform, he demonstrated how to reinvent products, services, and value propositions by “looking into the horizon and capitalizing on opportunities that aren’t in your face yet, but one day will be,” Harari said.
In the book, he explains how a number of businesses, publicly and privately held, defy convention and break from the pack in unorthodox ways that matter to customers.
Beyond commodity
Taking a page form Harari, Wisconsin Manufacturing Extension Partnership has designed the Manufacturing Matters conference around the theme of “standing out in a copycat world.” Heading into the conference, to be held April 25 at the Midwest Airlines Center, WMEP Executive Director Michael Klonsinski said a number of metrics indicate the state’s $44 billion manufacturing sector is in good shape.
He said most Wisconsin manufacturers are making the changes necessary to compete in the new economy, and he noted that Wisconsin ranked 12th in value-added manufacturing in the recent New Economy index. In addition, Wisconsin is reporting stronger export growth than most states, which largely is driven by the manufacturing sector.
Manufacturing Matters will cover a number of technology-related topics, including electronic return on investment, R&D funding, supply-chain automation, lean manufacturing, and emerging roles in innovation, but the overall thrust will remain tied to global competition and avoiding the perception of commoditization.
To that end, Klonsinski said the conference will hammer home the importance of strategic repositioning and strategic redevelopment. “You’ve got to be lean to be in the game,” Klonsinski said, “but you need these two things to really grow.”
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