Innovate: Not “What” But “How”?

Nike’s Flyknit

By Shlomo Maital  

 

  

 Nike Flyknit

So, innovators,  what is the question?

   Is it “what shall I innovate?”  That question focuses on new gadgets.

   Why not ask,  instead, “how shall I do what I do, better and different?”  That question focuses on processes and on operations.   I think it is hugely underinvested. 

   Here is an example.  (Described in Matt Townsend’s excellent innovation blog in Bloomberg BusinessWeek, March 15, 2012).  Nike tried to sell a flimsy mesh sneaker called the Sock Racer in the 1980s.  It was comfortable but not durable enough.  Nike never gave up. Now it is introducing a 5.6 ounce running shoe called the FlyKnit.  It’s made from synthetic yarn woven together by a knitting machine!  This is a totally new process for making running shoes.  The manufacturing process is computer-controlled.  The upper part of the shoe is knitted in a single piece, which is then attached to the sole.  This cuts labor costs and offers huge opportunities for personalization.  And it may even bring labor back to America.  Traditionally, shoes are assembled from pieces. This is labor intensive and ideal for China.  “This is a complete game-changer,” according to Charlie Denson, president of the Nike brand.  “Eventually we could make these shoes anywhere in the world.”  Even in America!

    The Flyknit will cost $150 and will be sold in July.  Lightweight shoes are growing in popularity, and grabbed nearly a third of the $6.5 b. U.S. running shoe market.  The lightweights are growing at a torrid 14 per cent yearly. 

   Nike’s process innovation involved, first, a decision to create a shoe that replicates a sock, then, second, mimicing how socks are made.  A team of engineers and programmers took a machine used to knit sweaters and re-engineered it to weave the upper part of sneakers.  Tiny synthetic cables are knitted into the weave around the midfood for support.  CEO Mark Parker started at Nike as a designer; he quickly saw the potential of this process innovation and pushed it.  Very smart of Nike to appoint a designer as CEO.  He gets it. 

     Shoemaking hasn’t changed for decades.  Innovative Nike has finally thought about HOW shoes are made, now only about which shoes are made.   Time to market is crucial; and the biggest time, apparently, in the life cycle of running shoes is the time the shoes spend on boats, in containers, coming from Asia.  Eliminating that ship time could give Nike a huge advantage, and even bring manufacturing jobs back to the U.S.

    Innovator:  Can you change how you make your goods and services, and not just which goods and services you make?  If so – you may just create substantial competitive advantage.  

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