July 24, 2012
Read More »
Do you ever feel like an outcast when you promote innovative thought?
Do your colleagues raise an eyebrow and smirk?
Every one of the folks we mentioned in the video faced that kind of alienation.
In a way, your friends and colleagues can be innovation killers.
...Dismissing break-through thinking and new ideas.
...Presenting to you all the reasons why a new approach WON'T work.
...Persuading you that the status quo is "good enough".
It's no wonder that most innovative ideas never get traction.
Innovation is often construed in lofty terms - stroke of genius, epiphany, ah-ha moment - I'm here to dispute those notions. Innovation can come from anyone and anywhere. Sometimes, innovation is incremental - building blocks that instill change over time. Sometimes it comes from what already exists that has been transformed by taking a different viewpoint or gaining insight from others.
As a case in point, I'd like to tell you the tale of two cities - Clarksdale Mississippi, where I grew up, and Chattanooga. You may wonder what these two places have in common. After all, one is perched in the mountains - the other is in the Mississippi Delta which is about as flat as it gets. One has land that is rocky and inhospitable to farming; the Delta's alluvial soil is some of the most fertile in the world.
Actually, they have a lot in common. They share a history fraught with poverty, founded by hardscrabble hard workers who were abandoned by disappearing income sources - industrial manufacturing here; cotton in Mississippi.
How did this happen? How is it that relatively small places like Chattanooga and Clarksdale have produced such creative people? What makes a place a hotbed of new ideas and innovation?
Let me talk first about the Delta since I'm better qualified to talk about it. I'll start with a litany of talent: Elvis Presley, William Faulkner, Eudora Welty, BB King, Oprah Winfrey. They all came from a triangle of Mississippi that is home to the poorest counties of the nation.
One thing I know about my homeland is that the geniuses that rose up in past years didn't have the benefit of Ivy League schools, or new technology or high priced consultants to pave their way to success.
In every case, these geniuses looked around them, where they were, and found inspiration.
Take Delta Blues Music - rooted in African slave and gospel music, seasoned with the angst of poverty. Musicians like BB King and Elvis Presley took those roots and made something completely new that changed the world.
Eudora Welty, one of America's best short story writers, lived nearly her whole life in the house where she was born in Jackson, Mississippi. Her stories reflected the happenings in her then-small town yet the themes she wrote about were universal.
William Faulkner did the same but took those stories of the Delta and Oxford to the extreme, to almost mythical proportions. Both writers had unique perspectives on the ordinary - turning their hometowns into masterpieces.
Then there's Jim Henson, creator of the Muppets, who came from Leland Mississippi. The original Kermit was made from Henson's mom's green coat he retrieved from a trash can and two ping pong balls. Now that's innovation from anywhere!
I bet you are saying...but I'm not a musician. I'm a business person.
Well, there's plenty of inspiration for you right here in your hometown.
Most of you know the story of Chattanoogan Ernest Holmes, who invented the tow truck when he helped a friend retrieve his car by using three poles, a pulley and a chain hooked to the frame of a 1913 Cadillac. He filed the patent and successfully built a whole new industry.
Garnet Carter was the first person to patent miniature golf, when he built "Tom Thumb Golf" on Lookout Mountain in 1927.
And there's the most important Chattanooga invention of all - the Moon Pie.
UPS follows the same path as some of these innovators. Sure, we've filed hundreds of patents over our 103 year history and now are a global company. But a creative entrepreneur started it all, revolutionizing our business and industry.
Jim Casey was a first-generation Irish immigrant who started working as a messenger at 11 years to support his widowed mother and his 3 siblings. At age 19, he started his own bicycle messenger company in Seattle. But then the telephone came along, so Jim shifted his business to delivering department store purchases to homes by automobile. Then airplanes made it possible to deliver shipments faster and longer distances. Technology advances made it possible to replace the old clipboards that tracked deliveries into bits and bytes. Today, Jim Casey's company stretches across 200 countries, delivers more than 15 million packages a day and processes more than 30 million tracking requests a day.
For more than a century, UPS has faced economic challenges and business shifts that could have crippled or killed the business and looked for innovative ways to change with the time.
Chattanooga's city leaders took the same incremental approach to growth. They took deliberate steps to adapt to the times and create something bigger and better.
If you look back at Chattanooga, there were some definite milestones when the city could have stumbled.
But at each point of Chattanooga's history, civic leaders have stepped up to find innovative directions for the future.
When we look at the Delta's artists, Chattanooga's story, and UPS's history, there are three things that they all have in common:
1. Vision
2. An environment that nurtured innovation, and
3. Passion for achievement.
Let's talk about Vision first.
There's no question that Chattanooga's leaders viewed their city as a vital place to live and work, even in decline. They overtly documented their plans in 1989 when they wrote the Vision 2000 project that laid a roadmap about how to revive the riverfront and downtown.
Company leaders have to set a clear vision too. You have to decide the path of your enterprise and stick with it. It takes creative, yes innovative thinking, to go into the future without mile markers.
So to give you a few compass points, think of finding vision in four ways:
You can Steal It, Build It, Tweak It, or Buy It,
Some of you may have the vision of building the best product in your industry. Others may aim for growth. And some of you may want to simply run a sustainable and successful business right here in your community.
Fortunately, there has never been a time when there were more sources for guidance.
Today, the ideas and knowledge of the world are at your fingertips. Inspiration literally is a click away. This is where the "Steal It" idea comes in. I don't literally mean steal it, at least legally. What I mean is that inspirational stories, business models and motivational ideas are waiting for you on the web.
Never before in history have entrepreneurs had so much access to information. And to me, information is opportunity.
Suddenly, small companies are able to compete against much larger and more expansive competitors.
By just Googling, you now have access to market research that once was too expensive for small companies. You can read technical documents that once were only available to PhDs in university libraries.
Need market information about your new product idea? You can use survey monkey and poll a hundred people around the country.
Need to know who your competitors are in France or Brazil? Send an email. And even if the reply is in Portuguese, you can translate it into English in seconds using Babblefish or GoogleTranslator.
Which leads me to one of my favorite subjects. International trade. I think this is should be part of the strategy for any ambitious company. This is where the "Build it" category comes from.
I'm a big proponent of small businesses expanding into global markets. The reason is opportunity. Every year 70 million people in developing economies worldwide achieve middle class standing. By 2015, 200 million people will reach middle-class standing in China. That's roughly two-thirds of America's population. All these business people and consumers need U.S. goods and services.
Yet, despite the opportunity, very few small businesses are selling abroad. We conducted a study that indicates that two thirds of smaller firms don't engage at all in cross-border trade. What's the problem? In a word...it's Fear.
Companies contemplating going offshore may not know what the laws are...where the banks are...and whether there's assurance that they'll be paid.
The good news is today there's more government and private sector support for exports than there's ever been. And just like your city visionaries reached out for venture capitalists and government subsidies to support the community's growth, so should you. All you have to do is click.
One of the things that stalls people from articulating their long-term vision is that it seems like a monumental task. How do you come up with the BIG IDEA? Something so breakthrough and different that it revolutionizes your industry. The answer might actually be to "Think Small".
This is one of the other approaches to vision: "Tweak it." Let me give you an example of why innovation doesn't have to be revolutionary...
Just evolutionary.
At UPS, we are big fans of incremental innovation. By that I mean tweaking our operations over time. We are always striving to make ourselves a little bit better, helping us focus our vision more precisely.
Better, smarter, cheaper, faster, easier, more profitable.
Let me give you a UPS example. We have engineers that spend hours in our sorting facilities and on our package cars. They observe how we do things, and then recommend improvements.
One result of this process was the observation on the road that turning left meant longer waits, more engine idling, more lost time, more accidents. These engineers figured out that if drivers moved forward in right hand loops, they could get places faster and safer. That idea was embedded into our routing software so that drivers were directed to avoid left hand turns. This was one of thousands of observations that were incorporated into our software, called Package Flow Technology.
What seems like a tiny change actually translates into millions of dollars. Since 2003, that technology has shaved 100 million miles off our routes. Reduced fuel use by 10 million gallons and carbon emissions by 100,000 metric tonnes.
That's how little things...incremental change...can add up.
Here's another UPS example. One that came from our customers.
For years, our customers have set up informal methods to let their UPS driver know not to stop because the customer didn't have a package for pick up that day. Usually, they left out a red flag or set up some kind of signal to tell the driver to keep going. But it was inconsistent and sometimes the customer forgot.
We took that same idea and built it into our IT systems. The service, just introduced last month, is called Smart Pickup.
Here's how it works: If you are part of the program, and you don't create a package label in our shipping systems, the driver's vehicles are routed to skip your stop for pickups. No action needed. The benefit to the customer is a lower weekly charge. But the benefit to us as a company is even greater. We estimate that Smart Pick up will cut 8 million miles off our routes and save nearly 793 million gallons of fuel annually.
So when you set your vision, don't just forecast the future. Look at today's world for opportunity.
Which brings us to the third way to find vision: "Buy It"
One of the ways we find new ideas is through a "Strategic Enterprise Fund" started in 1997. We identify emerging, start-up companies that are on the cutting edge of technology and business applications and then invest in them....not so much to gain a great return as to learn about their perspective. These entrepreneurs see the world differently and are looking at a horizon we sometimes can't even see - even from our high-rise headquarters.
We've learned a lot from them - in the 90s about how e-commerce would change the way we shop and most recently, how entrepreneurs in rural India use cell phones and public buses to efficiently connect to urban marketplaces.
Another way to "buy" ideas is through mergers and acquisitions. We bought more than 45 companies during the 90s, bringing in new ideas, new expertise and market knowledge that are supporting how the company is expanding - into areas like healthcare distribution, supply chain reengineering and reverse logistics to name a few.
We also have gotten a lot of new ideas from our suppliers, using their brainpower and market knowledge to help us improve efficiencies or create new products.
The collection of those outside voices drives our vision in new directions, serving us well as the future unfolds.
So, we've talked about Vision and the sources of innovative thinking. .....
Next on our list is:
2. Creating a Nurturing Environment.
Chattanooga has done some remarkable things to encourage creative types to locate here. The ArtsMove program offers grants, incentives and affordable housing to artists.
Entrepreneurs are encouraged to set up shop here and can get plenty of help. Retirees and young people alike love the green spaces and recreational amenities that are now here.
Your company also needs to attract and retain creative types. You need to give people permission to experiment and, yes, fail.
One of my concerns is that U.S. businesses have lost sight on the value of research and experimentation. During the Sputnik years in the 1960s when we were racing the Soviet Union to put a man on the moon, the U.S. invested 3 percent of our GDP on R&D. Today that investment has fallen to 2 percent. R&D needs to be a greater priority to nurture high-end products to support America's place in the global economy.
And while research investment is important, so too is helping employees to pursue their own ideas.
Let me share with you the story of how an employee idea helped our customer, Toshiba...
Our sales and solutions team was hired to work with Toshiba to set up their parts distribution operation. The inventory was set up in our UPS distribution center in Louisville, next to our air operations. The benefit was that urgent parts orders could come in as late at 10 pm and still be delivered by 8:30 am the next morning anywhere in the U.S. As our solutions team got to know the Toshiba team, they began to discuss the broader logistics challenges of Toshiba's laptop operation. One of them was the need to speed up laptop repairs that could take two weeks or more. The reason? Repair technicians, parts and laptops were spread across the U.S.; synchronizing the right part to the right laptop and then to the right technician and back to the customer involved dozens of legs of transportation.
Our UPS team considered the problem and came up with a radical proposal: What if UPS technicians repaired the laptops right there in Louisville? Broken laptops from around the company could be shipped to the UPS air hub where technicians would repair them with a centralized parts inventory and then returned directly back to the customer.
The solution was unheard of in the industry. And certainly UPS didn't have trained technicians to repair Toshiba laptops. But we did have technicians there who had repaired UPS's own equipment - printers, copiers, the hand-held DIADS that drivers used for tracking. Why not retrain them to repair laptops?
Toshiba realized that the process could save them not only money by streamlining the process, but also could significantly enhance their customer experience. Now, instead of two weeks or more, customers with broken laptops get them back in as little at 48 hours.
This single idea from a group of UPSers has revolutionized the computer repair industry. And the model has now been adopted by other high-tech equipment manufacturers - cell phones and digital projectors just to name a few.
In some companies, such an idea would have been dismissed as impossible or too radical to consider. Instead, UPS managers allowed the idea to be designed and tested. And in the process, it brought UPS a whole new line of business.
You can be sure that the original UPS-Toshiba team has a great deal of pride about that project.
It's also important to help employees be inspired in their every-day jobs.
Smart companies make sure that employees are exposed to new information and new ideas and are given the opportunity to take on new roles.
At UPS we are strong believers in having a lot of different experiences within the company. We call this "Promote from Within." It's based on the philosophy that good managers will become great managers if they are placed in a variety of situations to test their ability to adapt to new surroundings.
I believe that kind of broad-reaching experience helps us to keep employees for their whole careers.
If you look at the most senior managers of our company, you'll find that every one of them has had assignments in a variety of functions. For example, our CFO has had stints in sales and marketing, operations, engineering, and investor relations. I've had experience in international operations, logistics and freight, and have led the integration of some of our largest acquisitions.
I can assure you that you can never be bored when you have that kind of variety of experience and opportunity.
Which leads us to our third characteristic that fosters innovation: Passion.
Employees are most engaged when they feel like they can make a difference. This is especially true with the younger generation, a generation that is difficult to recruit and retain.
Certainly, that passion is most evident when employees are involved with projects near and dear to their hearts. Volunteer projects for example. Here's how good deeds can translate into good business:
When the earthquake in Haiti hit earlier this year, one of our sales directors, Craig Arnold, went to Port-au-Prince to volunteer at the Salvation Army camp there. Craig had already been to Haiti 5 times in 6 years to volunteer. And this time, his logistics expertise was in great demand.
His colleagues in Sacramento were deeply moved by the video and photos he sent back. Families were living in makeshift tents made from sheets and sticks. Salvation Army workers depended on paper index cards to keep track of family locations, details about the number of family members and which supplies they had received. What Craig really wanted was an automated way to keep track of that information.
His colleagues thought about a technology called UPS TrackPad, which tracks packages from the mailroom through a customers' building. Over the weekend, they adapted the technology software so that each family member received a scannable card that electronically documented needed information. They also got the vendor to donate equipment and sent it to Haiti by Wednesday. A week later, the Salvation Army had their replacement for those paper index cards. And UPSers had the satisfaction of knowing that thousands of Haiti earthquake victims could reliably get supplies.
Craig Arnold and his team received a tremendous amount of recognition for their work. But the thing that drove them the most, I imagine...wasn't the story in USA Today or the praise that they earned from our CEO. The thing that drove them the most was passion. A drive to make a mark on the world.
Craig and his team are a source of inspiration.
The same is true for ...
....Chattanooga's civic leaders who have devoted more than 30 years to make their Vision 2000 plan a reality.
....The entrepreneurs who created new industries years ago and who are working here today
...And for the musicians, writers and artists of the Mississippi Delta.
Everyone wants to make a difference.
Your job as leaders in your organization is to harness that passion and steer it toward the vision you've set.
In conclusion, I hope you see how, vision, creating a supportive environment, and passion are really the cornerstones of innovation.
Great ideas can come from the internet, from your customers, your employees, your kids...
Innovation can come from anyone, anywhere, any time.
Congratulations to each of the award winners today who are proving that innovation and these kinds of inspiration are alive right here in Chattanooga.
Thank you.
 |
 |
 |
|
