May 24, 2011
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FedEx Global Brand Management Director Monica Skipper shares a cost-effective way to build a bigger brand for your small business.
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Combined research from the U.S. Employee Involvement Association and Japan Human Relations Association reveals that the average number of ideas submitted per employee annually is 100 times greater in Japanese companies than in U.S. companies. The reason is that Japanese companies consistently practice kaizen, or continuous incremental improvement.
While kaizen is a Japanese word, it was the United States military that taught Japan the principle science behind continuous improvement well over a half century ago during the U.S. Occupation in the aftermath of World War II.
When France fell to Germany in 1940 and U.S. involvement in the European theater looked imminent, U.S. manufacturers needed ways to ramp up production. Then President Roosevelt formed an emergency service called Training Within Industries (TWI) to help quickly boost production and productivity. Nearly 2 million factory supervisors, through a training program called Job Methods Training (JMT), were taught how to generate and implement ideas through hundreds of small experimental changes that could be effected immediately if they worked.
The term used for the method was continuous improvement. Result? Quality, cost and speed were improved an average of 25 percent across the board. Students of history know that this factor figured heavily in the Allied defeat of the Axis forces. TWI vanished after the end of the war, but the approach followed General MacArthur’s occupation forces in Japan as the U.S. began to help rebuild the devastated nation. The approach became Japan's primary business method.
Each of the millions of small ideas were, as author Peter Sims calls them, a "little bet," in his new book by the same name. Little Bets: How Breakthrough Ideas Emerge from Small Discoveries gets to the heart of what makes kaizen to this day such a powerful principle.
A little bet is a low-risk action taken to discover, develop, and test an idea that represents a better way to do something. At Toyota, where I spent the better part of decade learning to master kaizen, well over 1 million small ideas—little bets—are placed each year. Electronics makers like Sony and Toshiba may well implement twice as many.
Big Idea:
When trying to navigate amid uncertainty, create something new, or solve open-ended problems, experimenting by making little bets—concrete and low-risk ideas that get iterated and refined over time through constant trial-and-error approach to gradually reach breakthroughs—provides the best way to discover the right direction and reach extraordinary, lasting success.
Key Takeaways:
There is absolutely nothing new in Sims's thesis. What's new is the stories, examples, and cases covering a variety of domains. Here are just a few that make his narrative particularly interesting and entertaining:
The writers for the humor publication The Onion, known for its hilarious headlines, propose roughly six hundred possibilities for eighteen headlines each week, a 3 percent success rate.
In gearing up for his latest global tour, stand-up comedian Chris Rock made nearly 50 unannounced appearances before tiny audiences of about 50 people at a small comedy club called Stress Factory near his home in New Jersey. In sets of under an hour, most of his jokes fell flat. "But Rock understands that ingenious ideas almost never spring into people's minds fully formed—they emerge through a rigorous discovery process."
Amazon’s Jeff Bezos uses a similar approach to develop new ideas and opportunities. Bezos compares Amazon’s strategy of developing ideas to “planting seeds” or “going down blind alleys.” They learn and uncover opportunities as they go. Many efforts turn out to be dead ends. No one used a feature the company tested that would in one click compare a customer’s entire purchase history with its millions of other customers in order to find the one person with the closest matching history.
Steve Jobs didn't expect Pixar to be a film company when he bought it from George Lucas. And he didn't predict its success, because digital animation was brand new. Although Pixar’s hardware never found a market, Jobs allowed a small animation division to be formed and make little bets on short animated films. They were affordable losses that eventually turned into an enormous gain.
Like Most:
Little Bets represents my general approach to creativity, so I'm biased when I say I liked the whole book. I enjoyed Sims's journalistic chops, deep research and fresh stories most of all.
Best For:
Anyone tempted to engage in the hunt for the killer app and neglect the more scientific discipline behind what history and research has shown to be by far the most effective, repeatable and reliable means of moving a business into the future.
What People Are Saying:
“In Little Bets, Peter Sims convincingly argues that we need a new model of creativity, focused around gradual improvement and constant innovation. If you're not learning while doing, Sims points out, then you're probably doing it wrong.”—Jonah Lehrer, author of How We Decide
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