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Management Side
Week of 9 November 2015: Innovation vs. politics

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For most people, innovation is difficult. As I noted last week, I have a gift for innovation and ideas, so I don't see it as difficult. However, I observe what goes on around me and how others struggle. I understand that it is difficult for most.

So, to get ahead in the modern business world, many resort to politics. Internal politics at a major corporation can be brutal and personally devastating if you are on the losing end. Even if you are on the so-called winning end, you will likely end up paranoid and a mental wreck.

There is not much room in major corporations for innovation; they are more about continuing the status quo, coupled with small, incremental improvements. Often those improvements are related to internal procedures, not actually improving products or services for customers.

Startups and small companies have no choice but to compete on innovation, for they must win the hearts and wallets of consumers. Inertia is not on their side, as it is with large organizations.

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How does inertia affect business? I'll give you an example. My wife and I bank with a bank that now and then sends us new bank cards (ATM Cards). A couple of years ago, this happened: For many, many years, these cards carried the VISA logo. Not long after the last time we got new VISA cards, and went into accounts where we might have these set up for payments and changed to new expiration dates and so forth, the bank did an about face. They issued new cards to everyone once again that now carried the MasterCard logo. Of course, this changed all the numbers on every account and required updating at all places where we had used our previous card. They got away with this nonsense because they are a large bank. That's inertia. It probably saved them big bucks but it did nothing for their customers. In fact, it caused their customers a great deal of unnecessary work. Did we change banks? No, because it is likely they all behave this way with their customers.

In our own industry, we are known for inertia. We are not known for innovation, in fact, innovation is almost discouraged. We are known for politics. If I took off my socks right now, I don't have enough digits on my hands and feet to count all the bad managers I know in positions of power in our industry. Politics wins.

At the time it was going on, I accepted the common logic that newsprint and the printing and writing grades were being destroyed by the Internet. That was an easy excuse to buy into and by and large, we all bought into it.

However, looking back, there is little evidence that the companies making these grades worked very hard at keeping the business. It was as if when the traditional business dried up, they simply said, "Oh well, the business is gone. Guess we will close up shop."

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An example from the 1990's is worth mentioning. As I understood it, at one time Champion had one machine at Courtland, Alabama, that produced nothing but Sears and Roebuck catalog stock. Sears dropped the catalog and Courtland moved on--for a few years. After Champion was bought by International Paper, Courtland continued to operate. However, a few years ago, in a shock to the entire industry, Courtland was shut. A very large mill, a fairly new mill--gone.

What might have happened if the executive team at Champion had decided they were in the catalog paper business, not just the Sears catalog paper business? What if they had decided to really work the catalog business and go after it, big business, small business and so forth and so on. I suspect at our house we get catalogs that are the equivalent of two or three of the old Sears catalogs every year in the mail. Someone has that business and likely it could have been Champion's if they had been innovative.

Our lack of innovation is killing us one slice at a time. What do you think? Do you think your company is more innovative or more politically driven? Take our quiz this week and let us know.

Surprisingly, innovation seems to come regularly in the safety business. Both equipment and methods are constantly changing for the better. Are you up to date?

Be safe and we will talk next week.

You can own your Nip Impressions Library by ordering "Raising EBITDA ... the lessons of Nip Impressions."


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