Lack of Requisitely Holistic Thinking and Action a Reason for Products to Not Become Winners

LACK OF REQUISITELY HOLISTIC THINKING AND ACTION – A REASON FOR PRODUCTS TO NOT BECOME WINNERS

DDr. Matjaž Mulej, Professor Emeritus

(Systems and innovation theory)

UniversityofMaribor, Faculty ofEconomics and Business,Maribor

E-mail:

Abstract: A big majority of attempts to transform an interesting idea into a winning product fail because the process participants practice over-simplification, hence one-sidedness and therefore make oversights leading to unpleasant surprises. In this contribution we are trying to point to many viewpoints and synergies to be unavoidably considered for a product to become a winner.

Key words: The Dialectical Systems Theory, invention-innovation-diffusion process, requisite holism

THE SELECTED PROBLEM AND VIEWPOINT OF CONSIDERATION OF IT

Internationally famous researchers of business practice find, that hardly any more than one single percent of ideas become innovations yielding benefit to authors and owners along with users; even ideas trusted as much as to become official company development projects of the world top companies succeed in less than five percent (Nussbaum, 2005). We are trying to suggest a reminder list based on the law of requisite holism (Mulej, Kajzer, 1998) to help its user make more winning products.

A SHORT DIALECTICAL-SYSTEMS VIEW ON THE WAY TO WINNING PRODUCTS

The invention-innovation-diffusion process (IIDP) that many tend to call with an over-simplication innovation or innovation process can be briefed in Table 1(Mulej, 2007).

The business success,including its IIDP part, depends on quality and hence on modernity of management. Therefore the most crucial innovation type of them all is the very influential innovation of management. Its essence is summarized in Table 2.

In order to manage the IIDP as a part of business, we need a management process that is summarized briefly in Table 3.

Of course, IIDP is not so simple in practice that the process in Table 3 could be considered a one-way one (Fujimoto, 2006): steps/phases of IIDP often just show up along the way, during the practical working.

All these facts matter because innovation is complex also as an outcome, not only as IIDP. It depends (at least) on every point in Table 4.

In the official international definition innovation is'every novelty found beneficial in experience and judgment of its users'(EU 2000: 4). Our typology of them is summarized in Table 5. History has shown that the biggest impact belongs to the type 4.1: if the management style is obsolete rather than cooperative, there is little room for any IIDP. Among other types of innovation the method-related ones support the managerial ones, the organizational ones activate most coworkers and do so in all types of organizations – enterprises and others – while the technological ones that most older references talk about, make sense when they – together with others – support business program innovations. Along with that, the newer sourcesreport the experience that the business style innovations (the 6thcontents type) matter at least equally much as the technological ones: a contemporary business style can sell a somehow obsolete product, while an osolete business style can hardly sell a very contemporary product (IBM, 2006).

Tables 1- 5 showed clearly that IIDPs are very complex and complicated. Thus, European Union rightly requires that IIDP must be considered with systems theory, and must be so with the version of systems theory based on interdisciplinary cooperation rather than on one that works on a single problem with a single viewpoint, although with a precious quantification and preciseness. See quotation in Table 6. The Dialectical Systems Theory meets this criterion (Mulej, 1974, 1979, 1992, 2000, 2008, in press, etc.)

IIP Phases / Crucial inputs / Usual outputs / Usual creators of outputs / Usual economic situation
Creation of ideas, especially inventions from knowledge and values of authors / Creative and requisitely holistic behavior, expertise, ambition, values, time and research conditions / Promising ideas resulting from a part of research, tacit knowledge and values, such as interest, ambition, .. / Inventive and professional humans and groups, and (non)-professional researchers / Cost of work and research conditions, no revenue or profit from market
Creation of sug-gestions from inventions / Writing etc. – ones' expression of invention / Promising idea written etc. (made available) / Inventors and advisors about writing etc. the idea / Cost of message preparation, no revenue/profit
Optional diffusion of suggestion/s / Offer to the market of inventions -suggestions in or outside ‘the home’ organization / Partly sale, partly giving up, partly transition to further development of suggestions / Owners of suggestions (authors and/or others) and their co-workers / Cost of offering; revenue and/or profit from sold suggestions
Creation of potential innovations from suggestions / Creative and requisitely holistic behavior, expertise, ambition, values, time and conditions for development of a suggestion to a potential innovation / Usable new product, method, procedure, managerial style, potential market, and/or business item (not yet used and/or beneficial) / Inventive and professional humans and groups, (non)-professional researchers and developers (incl. market developers) / Cost of work and conditions of development, no revenue and/or profit
Optional diffusion of potential innovations / Offer to the market of potential innova-tions inside or out-side ‘the home’ organization / Partly sale, partly giving up, partly transition to application as innovation / Owners of potential innovations (authors and/or others) and co-workers / Cost of offering; revenue and/or profit from sold potential innovations
Creation of innovations from potential innovations / Creative and requisitely holistic behavior, expertise, ambition, values, time and conditions for development of potential innovation to innovation, incl. the entire business operation / Beneficially used new market / product / method / procedure / management style / organization / business style – upon users decision and experience / Inventive, innovative and professional humans / groups developers of the novelty and its market, (non)-professional, including entire business operation / Cost of offering; revenue and/or profit from sold innovations (inside or outside ‘the home’ organization)
Optional diffusion of innovations / Offer to the market of innovations inside or outside organization, especially to additional customers (after the first ones) / Beneficially used old/new market, product, method, procedure, management style, organization, business style – with users in broader circles / Owners of innova-tions (authors and / or others) and co-workers, especially in marketing and sales, but the entire production/business process matters equally / Cost of offering; revenue and/or profit from additionally sold innovations (inside or outside ‘the home’ organization)

Table 1: IIDP

Innovation of managementstyle: from commanding to the un-capable and unreliable ones, to cooperation of interdependent specialized professionals. “The human capital is even more important than the financial and other. We all live on creativity of our coworkers. The managers’ role is the long-term development of their organizations and creation of conditions for coworkers to work as creatively and professionally as possible, being requisitely informed and motivated.”This is what years ago the head of the Managers Association of Germany wrote. Managers are either democratic or overburdened.
Promotion of innovativeness (as a human attribute and activity): communication, partially public, mostly in person-to-person contacts, information and awareness-building about how unavoidable, makeable, interesting, and benefiting is IIDP. Impact of opinion leaders, trust, diminishing of (the feeling of) risk…
Big persistence: »If they do not try to block us, it is suspicious. Probably we do nothing new. If you want to attain the fresh source, you must swim against the main-stream, rather than as a dead fish.”

Table2:Summary of the essence of innovation of management

Education and training / For expertise and creativity, including creative (interdisciplinary) cooperation (will, capability and organization for team work) – seminars, courses, handbooks, experience
Mission / Attaining over-average systemic quality of the entire business rather than products only
Politics / Permanent deliberate search for possible novelties and realization of them; no peace but: 1) research, development and marketing as the most crucial business functions; 2) no division in the ‘thinking and commanding tank on one hand and the working tank on the other hand’, but ‘all of us work, invent and innovate, and do the daily jobs’ as the managerial style; and 3) many/all feel motivated for IIDP rather than laziness and evasion of work
Strategy/ies / Assess and deliberately develop everybody’s behavior to match the ISO 9000 (in 2000 version including IIDP and systemic behavior) or even the European Business Excellence Award (with learning and IIDP as its basis) – but not in a bureaucratic style (providing only visibility and insight, no IIDP); support to IIDP in strategies of all business functions/units
Tactics / Organized criticism – a source for IIDP, partly by R&DMarketing, partly by Suggestion Systems activating individuals, mostly by quality etc. circles/teams
Practice/
Operation / Regular IIDP, permanent removing of obstacles, hopefully a proactive one (especially the routine-loving and bureaucratic behavior, esp. thinking and decision-making)
Monitoring and intervention / Top-management board for promotion of IIDPand quality/excellence; in session once in 3 or 6 months; agenda: 1. Comparative assessment of achievement of all units concerning IIDP, 2. Variable part of incomes of units’ managers depending on it, 3. Approval of new IIDP-related objectives of units
Rewarding / Non-monetary (a grounded feeling you are found creative by your boss and peers) and monetary (e.g. half of income from IIDP belongs to the organization, half to coworkers, of which 30% to authors and co-authors, 10% to all unit-members authoring the innovation, 10% to all organizational members, including managers and supervisory board members)

Table3: Process of management of IIDP

Innovation = (invention X entrepreneurship and entrepreneurial spirit X requisite holism X management X co-workers X innovation friendly culture X customers X competitors X suppliers X natural environment X socio-economic environment and other outer, i.e. objective conditions X random factors, such as luck)

Table4: Equation of precondition for innovation to be created

Three networked criteria of inv., sugge-stions, pot. innov., and innovations / (2) Consequences of innovations / (3) On-job-duty to create inv., sugg., potent. innovations, and innovations
(1) Content of inventions, suggestions, potential innovations, and innovations / 1. Radical / 2. Incre-mental / 1. Duty exists / 2. No duty
1. Business program items / 1.1. / 1.2. / 1.3. / 1.4.
2. Technology (products, processes, ..) / 2.1. / 2.2. / 2.3. / 2.4.
3. Organization / 3.1. / 3.2. / 3.3. / 3.4.
4. Managerial style / 4.1. / 4.2. / 4.3. / 4.4.
5. Methods of leading, working and co-working / 5.1. / 5.2. / 5.3. / 5.4.
6. Business style / 6.1 / 6.2 / 6.3 / 6.4
7. Business management process / 7.1 / 7.2 / 7.3 / 7.4
8. Values, culture, ethics, norms / 8.1 / 8.2 / 8.3 / 8.4

Table 5: The basic types of inventions, suggestions, potential innovation and innovations

‘The Action Plan [First Action Plan for Innovation in Europe, 1996, based on Green Paper on Innovation, 1995] was firmly based on the ‘systemic’ view, in which innovation is seen as arising from complex interactions between many individuals, organizations and environmental factors, rather than as a linear trajectory from new knowledge to new product. Support for this view has deepened in recent years.’

Table6: Systemic thinking about IIDP according to definition by EU (2000, 6).

More concretely, definitions from Tables 1-6 could be transferred to the business practice as in Table 7.

* Perception of troubles – need for IIDP / Search for opportunities to match needs
Marketing and cooperative leaders / Volunteers and cooperative leaders
Research of (potential) market for potential novelties inside and outside the organizations / Search for possible ideas to create possible novelties matching perceived possible/probable needs

↓

Idea  / Invention / Suggestion / Potential innovation / Innovation (diffusion) *
Unclear potential / Promising (= potential for benefit) / Recorded invention / Usable, i.e. able to provide benefit / Used and providing benefit (to many)
Scientific research and applied development professionals/authors / Production & market managers
Scientists (for the basic knowledge) and technologists (for applied knowledge) and helpful experienced practitioners / Entrepreneurs, managers, coworkers, (many) users (for the final benefit, including authors)
Interdependent complex phases of complex processes; all are essential, none is self-sufficientneed for requisite holism basedon (informal) systemic behavior, especially thinking and decision-making

Table7:IIDP from the viewpoint of activities /functions having the upper hand in impact per phases

All said facts require managers' attributes summarized in Table8.

1. Governors – owners and managers have the broadest and most long-term influence.
2. They know and consider that in the innovative society – the central problem is not the needed financial and material capital, but the requisitely up-to-date knowledge and values (hence learning, training and education influence outcomes even more than the daily operations do!!!).
3. They know and consider that in the innovative societyknowledge and values are requisitely up-to-date, when they are requisitely holistic for humans/teams as experts to make no crucial oversights and therefore to listen to each other in an interdisciplinary creative cooperation.
4. They know and consider that in the innovative societyexperts must therefore manage a dialectical system of five viewpoints:
(1)Comprehension of the entire society;
(2)Comprehension of the entire economy;
(3)Comprehension of the entire unit, e.g. enterprise, e.g. as business system (if experts in business economy);
(4)Capability of doing with requisite quality (including IIDP) a jobinside the organization.
(5)Capability of networking of jobs of requisitely many coworkers and partners into a harmonious, requisitely creative, innovative, and competitive unit.

Table8: The role and hence required attributes of coworkers and managers in IIDP/innovative business

The framework of the innovative business is the innovative society. In it, both the business and personal life on IIDP and innovations prevails, which means that the majority of enterprises and other organizations practice the innovative business. The innovative business is briefly summarized in Table 9.

1. In principle, every cost is unnecessary, but in reality it is so, if we work smarter, not harder, and produce innovations in a requisitely holistic IIDP, rather than one-sidedly cut e.g. cost of maintenance or care for sustainable future.
2. Today, every product and process becomes obsolete, sooner or later. That’s why we must know their life cycles, do research, do development (connecting research results with the daily needs and practices), create other inventions and make from them innovations as a new, useful / beneficial basis of survival, in a continuous IIDP.
3. Survival, and therefore both good and poor work, is everybody’s business. Nobody, neither the superiors nor the subordinates, are entitled to be irresponsible and oppose or disregard IIDP/innovation in their own life reality. Everybody must be a co-worker.
4. Therefore let us continuously, all the time and everywhere, search for possible novelties! Only a small portion of them can become inventions. Some of them will be registered as suggestions. From some of them, by research and development, or connect and develop concept (Huston, Sakkab, 2006), sometimes something both usable and new might be created, a potential innovation. Customers will accept only a fragment of them as useful / beneficial and worth paying for, hence making a benefit to both customers and suppliers, therefore deserving the name of innovation. They can be diffused, too.
5. The entire business policy and practice is IIDP/innovation oriented, not just a fragment of it.
6. Customers buy results, not efforts. Hence, let us work like the clever ones, not like fools. Diligent stupid humans are dangerous: they do it wrong all the time. So are clever criminals.
7. These six sentences no longer apply to the producing part of the organizations only, but to all activities and all parts of life in all organizations.
8. The IIDP must be broadly disseminated and permanent, because the pressure of competitors is permanent.
9. For competitiveness the quality must be systemic, which is impossible without continuous IIDP and innovation.
10. Innovative business is a regular practice of the sustainable enterprises with sustainable ethics and systemic quality. See Table 5.

Table9:A short definition of the innovative business

The innovative business can more easily lead to systemic quality consisting of product attributes that customers accept in terms of cost, quality, range, uniqueness and environmental care as interdendent attributes offered. The road to systemic quality leads through consideration of the five interdependent pillars of total quality in Table 10; quality cannot change from the given to an excellent one without IIDP and innovation, and customers are on surface interested in quality, and only in its background they see IIDP.

Perfect product /  / Perfect processes
↕ / ↨
O R G A N I Z A T I O N
↕ / ↕
Leading (= managing by example and co-operation) /  / Commitment

Table 10: Five Pillars of Total Quality (backed by IIDP)

Today, the guild-based economy no longer prevailsin whichsuppliers were able to expect well-known customers, but the market-one, meaning that supply is bigger or even much bigger than demand. There are not many local markets, but the global ones with attributes expressed in the formula (information society + science/technology society + learning society + creating society = innovative society).[1]Thus, one must apply the innovation management that is innovative, to fight/face the very demanding situation summarized in Table 11.

Existence/survival and development
Competitiveness
Investment and IIDP capability
Supply of “systemic quality« (= suitable price X technological and commercial quality X range of choice X uniqueness X consideration of sustainable future/development) 
IIDP (= creation of new benefit from new ideas /EU 1995, 2000, 2004 etc./) 
IIDP/Innovation friendly social and organizational values/culture/ethic/normsand other preconditions X (fresh!) expertise X creativity X cooperation capability
Innovated and innovative management

Table11:Survival in the contemporary market depends on innovativeness of the innovation management and IIDP

Briefly, one must consider at least everything summarized in Tables 12 and 13:

Ideas / ┌→
│ / Inventions / ┌→
│ / Suggestions / ┌→
│ / Potential innovations / ┌→
│ / Innovation / ┌→
│ / Diffusion
- PRO-
MISING
- No / ┘
→ ? / - RECOR
DED
- No / ┘
→ ? / - DEVE
LOPPED
- No / ┘
→ ? / - USED IN PRACTICE
- No / ┘
→ ? / - MANY USERS
- No / ┘
→ ? / BENEFIT
- MANY
Ne → ?

Table 12: Process model of IIDP (feedbacks not considered)