When most people think of innovation, they think of revolutionary products — the iPod, the radio, even the lightbulb. The term innovation is often closely tied to tangible products or services that get put into the marketplace and are visible to a variety of consumers. But in order to innovate, we don't always have to create the “next big thing.” Sometimes, innovation is best expressed through finding a creative way to improve your processes. In other words, we might not need a revolutionary product if we have a revolutionary method of delivering or creating that product.
Innovation, in this sense, is the ability to create unique solutions that solve any problems that prevent our product or service from reaching our customers quickly and efficiently. The best examples of this type of innovation? Ray Kroc and Henry Ford.
Henry Ford, the founder of Ford Motor Company, and Ray Kroc, the long-time CEO of McDonald's, are two of the greatest innovators in American business history, but neither of them sold a novel product. Unlike some of the innovators we've discussed previously, they didn't create a unique or inimitable product in the hopes of disrupting markets (see our post on Steve Jobs and iTunes). Ford isn't credited with inventing the automobile, nor Kroc with the world's first hamburger.
What made these two special was their ability to recognize, correct, and exploit inefficiencies in the production of existing products. Both understood the high degree of inefficiency within their given markets and sought to correct this through what is known as process innovation. According to Innoviscop,
“Process innovation means the implementation of a new or significantly improved production or delivery method (including significant changes in techniques, equipment and/or software).”
These great innovators had a vision of maximization, resulting in faster times to market and increased production totals. Once they created the processes, the rest was history.
Innovators Assemble: Henry Ford
At the start of the early 20th century, the automobile was a sign of wealth. Most automobiles were constructed by a handful of skilled workers assigned to individually create specialized parts of a whole vehicle. The production process was painfully slow and difficult, and as a result, automobiles were seen as luxury items for the very rich.
In 1908, when Henry Ford founded the Ford Motor Vehicle company, the public was generally unsure of the importance of the automobile. Most people used electric streetcars or horse carriages, so owning a car wasn't seen as a necessity. Ford had a different vision and, in the 1913 edition of the Ford Times, he explained it himself,
“I will build a motor car for the great multitude. It will be large enough for the family but small enough for the individual to run and care for. But it will be so low in price that no man making a good salary will be unable to own one.”
In order to achieve this, he understood the automobile production process had to be changed.
The Assembly Line
Ford looked to other industries — clock makers, watch makers, meat packers — as he began designing a scalable assembly line. From this research, he concluded his plant must be based on four principles: continuous flow, interchangeable parts, division of labor, and reducing wasted effort.
Using these principals, he created a process where workers were constantly working through the day, parts were both mass produced and specialized, and workers themselves were not required to have specialized skills. As Steve Forbes, Chairman and Editior-In-Chief of Forbes, explains,
“[Ford] not only wrought the first mass-produced auto in the world but also created many of the numerous parts that made up the vehicle. Ford and his engineers created the modern moving assembly line, which required the creation and coordination of numerous machine tools.”
Henry Ford's vision didn't involving crafting a new idea and forging adventurously into an unknown market. He saw a way to innovate a production process so as to make a product more affordable, more available, and, therefore, more successful.
Innovators Imitate: Ray Kroc
Ray Kroc's theories about innovation were quite similar to Ford's. Originally a milkshake salesman, Kroc entered a McDonalds near San Bernardino on a sunny day in 1954. What he saw inside that small “burger and fries” joint would change his life forever. As Daniel Gross explains in his book Forbes Greatest Business Stories of All Time,
“Unlike so many food-service operations Kroc had come across, this joint hummed like a finely a tuned engine… they offered a nine-item menu — burgers, french fries, shakes, and pies — eliminated seating, and used paper and plastic utensils instead of glass and china. They had also devised the rudiments of a hamburger assembly line so they could deliver orders in less than sixty seconds.”
Kroc channeled his inner-Ford and realized this restaurant had made the ordering process simpler and more efficient, which allowed them to serve more customers and price their product much more affordably. He purchased the rights to the franchise later that month and began building his business. He knew that in taking the concept from single restaurant success to a chain of thousands, he had to impose strict principles to an industry that was relatively void of them. For this, Gross explains, Kroc turned to Ford,
Forty years earlier, Henry Ford had realized that the mass production of automobiles required the marriage of precision parts to an efficient assembly process. Kroc's insight was to apply the same rigor to the construction of sandwiches. Espousing the idea that 'there is a science to making and serving a hamburger,' Kroc endowed his beef patties with exacting specifications.”
Regardless of what you think about the quality of their food, McDonald's affordability, rapidity, and consistency undeniably helped it grow to become one of the most successful restaurant chains in the world. Today there are McDonalds in over 115 countries worldwide, serving over 68 million customers a day. Ray Kroc changed a simple process and leveraged Ford's assembly line to grow a small restaurant into a world-renowned empire.
Innovation, Imitation, and Application
Not every innovation has to be disruptive — revolutionizing our business can be as simple as applying principles from other industries to our own processes. Sometimes innovation is merely creative imitation. Think about ways you could change or improve your production strategy. Are there are more efficient ways you can get your service to your customer? What other processes are preventing you from being as successful as you want to be? Innovate not by thinking outside the box, but by redesigning the box itself.
Which great innovations inspire you? Let us know by tweeting @EidsonPartners!