Monday 28 August 2017

Shu-Ha-Ri: An essay on innovation in plastics industry

The new economy is disrupting one industry after the other. With its customers being disrupted the plastics industry is no exception. Industries are pushed to adapt and in many cases even shift their core competencies in order to survive. A case in point is the ongoing shift from combustion engine expertise to battery technology expertise in the automotive industry [1]. Every disruption brings along opportunities for implementing new plastic solutions.

What are the ways in which a business organization must change to take up hard problems and offer unique solutions in a VUCA (Volatile, Uncertain, Complex and Ambiguous) world? First, business development must be customer-focused, i.e., customer is the center for innovation. This means a paradigm shift from market push to customer pull is necessary. Secondly, innovation concepts must be pre-defined. Only in this way, organizations can work effectively toward it.
Shu-Ha-Ri is a Japanese concept used in martial arts [2]. In my opinion, this may be applied in the context of innovation as well and help us to gain ground in the new economy environment. Following, I will explain the concept of Shu-Ha-Ri at first through a cooking example [1, 2]. Thereafter, I will make the bridge from the mentioned example to the plastics industry.
  • Shu ("protect", "obey"): This is the beginner’s stage. In this stage, you start cooking according to the recipe and you keep yourself strictly to the recipe. There are no modifications. Convenience food manufacturers and fast food services are in those categories as industrial examples.
    Translation to the plastics industry: For instances, concerning injection moulding: the machine operator is acquainted with the machine and the handling of the moulding process. The focus is mainly on how to excel the task in a mechanistic manner, e.g. proper injection moulding of thermoplastic resins.
  • Ha ("detach", "digress"): At this level, you still follow the recipe for cooking, but you start adding your sense of flavor. This can mean that you add a bit more salt and pepper to better fit the taste of the whole meal.
    Translation to the plastics industry: The above-described machine operator starts learning the underlying principles behind the injection moulding process and is able to combine knowledge from the three M’s in plastics processing: Material, Machine and Mould. As a result, he/she is able to set up and adjust the running process.
  • Ri ("leave", "separate"): This is basically reinventing the way you cook a certain meal or even one step further to invent complete new ways of making new meals. To put it simple, with Ri you are the rule and you are able to seek unique solutions to hard problems or re-invent the way we do things. Translation to the plastics industry: The machine operator starts creating his/her own ways of processing and incorporates that in his/her daily operations. 

  • Shu-Ha-Ri in plastics industry:
    The basic idea is that people in a (plastics) technology organization have to go through the different stages of Shu-Ha-Ri to be able to achieve excellence in innovation. Their mind- and skills set need to reach the Ri-level.
    For too long, the majority of big companies shaped their departments toward Shu. This resulted in process thinking, performance self-assessment and outsourcing of services. Several departments made themselves redundant, which is highly beneficial for commodity type of business. Reduction of costs is the major upside of such systems, while major downsides include brain and skill drain. Because core competencies were more and more outsourced to Tiers [2], organizations struggle now to bring Ri-type of innovations to the market.
    Now, in the times of new economy, we need more Ri skillset to integrate software, hardware and design into excellent products. The expectation of business leadership to transform Shu level stuff (‘cooking according the recipe’) to Ri innovators (‘re-invent the way of cooking’) has several challenges. Take plastic resin formulation as an example: Changing a resin formulation will result in Shu- and Ha-type of innovation. The base feedstocks are well known and available mostly in huge quantities. Exchanging certain parts of the recipe can, thus save costs.   There is no new market, nor new product involved. Conversely, for Ri-innovation, the business outcome is not clearly defined, meaning that there is no business case where you can be 200% sure that the numbers will be hit. This means that people need to have more an entrepreneurial edge then a classic business economics background. In Shu and Ha, business cases make sense and are accurate, since experience exist (from R&D, procurement over to supply chain). This is the reason why this way of “innovation” is preferred, resulting in efficiency innovation (e.g. moving production to cheaper locations) and good enough downgrade innovations (e.g. hardcover book to paperback only).

    I would like to end this post with an example in plastics business, which shows a Ri behavior:
    The 3M Company implemented a three-step process [3], which ensured them fruitful innovations over the years. The designated functions of the steps are “Scouts,” “Entrepreneurs” and “Implementers”. The scouts are the project hunters. Their job is to identify hard problems which are worth solving. The Entrepreneurs help then to figure out how to capitalize on the opportunities. Those can be manufacturing experts, engineering and other functional experts. They carve out a functional prototype. Once all the product related investigations are done, Implementers take over. Their job is to get the new product ready for commercialization. Scouts, Entrepreneurs and Implementers have a strong Ri-mindset and are able to think outside the classic ways because they know that is the only way to solve hard problems! It is a step away of ‘what’s in it for me’ and focusing on the greater vision of improving everyone’s life.

    Thank you for reading and successful innovating!


    P.S. New to my blog – check out the start here section
     [1] Prof. Dr. Gunter Dueck – Der Prozess ist der Innovation ihr Tod, Podcast Markenrebell, June 2017

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