No one likes being vulnerable. It involves risk, and risks are scary. In business, innovation or trying new things is often seen as a risk. There are entire service industries that revolve entirely around the concept of managing or mitigating risk, have you talked to your insurance agent recently?
David Brown, in an article titled “Managing Risk and Innovation: the Challenge for Smaller Businesses,” discusses the concept of innovation for small businesses and the unique challenges faced by SMEs. At one point he states:
“Small and medium sized enterprises (SMEs) are caught in a double bind. As competitive pressures mount and customers press for higher quality standards, tighter cost control and faster response times from suppliers, SMEs find it increasingly vital to accelerate process and product innovation. At the same time, the attendant risks of innovation are higher for a small firm than a large one: usually, the smaller firm will have fewer technical and managerial competences, more limited finance, and more limited access to information than a larger organisation. The risk of getting it wrong comes into sharp focus for those firms where one major unsuccessful product or process development may threaten the survival of the enterprise and possibly the entrepreneur's personal assets. The consequence is a characteristic and understandable risk aversion.”
Based on that, is it no wonder that R & D investments in product designs concepts and new product launches are such a scary concept for manufacturers? Many manufacturers choose to ‘play it safe’ and stick to what they know . . . but this raises another issue mentioned in the above article . . . something he calls the “tomorrow as well as today” problem. The need for companies to continue to demonstrate to end users, be it suppliers or consumers, that they are not only capable of providing a competitively priced, quality product now, but committed to maintain market relevancy and offer product improvements in the future.
This is especially important as technology changes at an ever rapid pace. What’s a company to do? There are risks either way. If you move ahead too fast, you need to be able to fail quickly and fail cheaply or you’ll fail yourself right out of business. If you wait too long, you’ll be the one making products when consumers and customers have moved on to the next item on their technology menu. VHS tapes anyone?
There are ways, of course, to make technology work for you. The Digital Manufacturing Revolution held an invitation only kick-off meeting on October 1 & 2 with the opening of the GE Advanced Manufacturing and Software Technology Center. The goal of this new initiative is to connect 21st Century digital manufacturing tools with American industry. This will leverage the power of big data, predictive simulations, and high-performance computing in a community-driven virtual world. Copies of some of the keynote presentations are available online.
Sometimes the best thing to do is to hear how others have done it. We invite you to attend an upcoming Leadership Best Practice Series at no cost to you. On October 30th, from 7:30 am to 10:30 am, attend our New Product Launch panel and interact with company representatives from Morbark, Inc. and Roll-Rite, LLC that have been involved with successful product launches.
From there you can explore MMTCs services on the Product Preparation Process (3P) or take a look through out Business Development offerings and design your own strategy for growth.
As a side note, just in case you think this is a new concept, the above article was written in 1997. While technology has changed, the issues facing SMEs are still the same. It’s not if you face risk, but what you choose to risk and how you manage it, that matters.
We look forward to seeing you later this month.
Since 1991, MMTC has assisted Michigan’s small and medium-sized businesses compete and grow. Through personalized services fitted to meet the needs of clients, we develop more effective business leaders, drive product and process innovation, promote company-wide operational excellence and foster creative strategies for business growth and greater profitability. Find us at