Over the coming years leading up to 2020, 'Innovation' is going to go up-and-up the agenda for businesses, and further up in the mind-set of ordinary people. As Asia turns up the gas, the west will shrink in its dominance in world affairs. That only answer the west has is to innovate. But not only create and make the stuff people want, but make stuff that people aspire to and can't do with out. What to do?
Stoking Your Innovation Bonfire
Braden Kelley’s new book Stoking Your Innovation Bonfire is different. And begins to give answers to my question above. The book divides the innovation process into three distinct categories:
Perhaps the most valuable part of the book is the Epilogue and Appendix where valuable examples, methodologies and frameworks reside. In fact, I think the author should have integrated more of this information into the heart of the book, rather than subjugating it to a section where some readers may not take to time to read or appreciate.
Perhaps the best example that Kelley highlights in the book is that of Alfred Sloan’s lesser-known (but equally powerful) innovation while leading General Motors in the 1920s. While Sloan is known more for how GM divided the U.S. car market into segments by price range (which helped end Ford’s domination of the market), his innovation in car financing is equally as impressive.
Here’s what Kelley has to say about the creation of GMAC:
'Besides...market segmentation, the other innovation that GM unleashed on the automobile market was the General Motors Acceptance Corporation (GMAC). In 1919, the first branch of GMAC was opened in New York City, along with branches in San Francisco, Toronto, Detroit and Chicago.
In 1920, GMAC expanded outside of North America with the opening of a branch in Great Britain. GMAC was formed to provide GM dealers with the financing they needed to maintain their vehicle inventories, as well as to give dealers the ability to finance retail customers’ new vehicle purchases easily and conveniently.
By 1928 GMAC had already financed four million new vehicle purchases. Meanwhile Henry Ford was opposed to making loans to customers, insisting debt would ultimately hurt the customer and the broader economy. In December 1927 Ford relented and started offering the same terms on the redesigned Model A.'
Course, by the time that Ford followed GM's lead in offering vehicle financing, Chevrolet alone was outselling Ford by a 3-1 margin - a far cry from just a few years earlier where Ford outsold Chevrolet by a 10-1 margin. It was an advantage for GM that nearly bankrupted Ford in the years ahead.