Teaching Innovation Execution

November 23, 2005
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COMSTOCK PARK — The combination of a West Michigan consultant and a New-York-turned-Lakeshore business intelligence specialist is driving innovation at some of the world’s most famous companies — with clients ranging from the National Football League to TV Guide, Bloomberg and Nestle Purina.

Now, the company wants to bring its strategy planning and performance analysis services to the home turf.

“We see a big need for more and more of this in West Michigan,” said Metrics Reporting managing partner Bill Guest. “We want to make a difference.”

“And we’re tired of getting on airplanes to go to work,” added partner Andy Catlin.

As a preface, Catlin admitted he never had much use for management consultants. He recalled his experiences as co-founder of New York-based Citigate Hudson, working with what were then the Big Five consulting firms.

“There was this time that they brought me in, and they had these two young bucks in charge of an account worth three-quarters of a million dollars … and they didn’t understand the business at all,” he said. “They laid the project out for me and it was completely generic.”

After two years, they hadn’t even met the customer.

It wasn’t until Catlin moved to Grand Haven in 2003, and met Guest a year later, that he realized he was part of the problem. He used a recent client as an example, a 300-employee firm in Kentwood’s airport corridor.

A year earlier, the company’s information technology director had built five cubes — multidimensional arrays of data that are called cubes because they can be sliced apart and drilled into — and wanted Catlin’s help building five more.

A cube itself is an impressive thing. A common product of the online analytical processing (OLAP) school of database theory, it creates extensions of the two-dimensional spreadsheet, making hierarchal, underlying data easily accessible for decision makers.

For example, a company might wish to analyze financial data by product, time-period, city, type of revenue and cost, and by comparing actual data with budget. With traditional reporting tools, reconfiguring a comparison between any of those values, called dimensions, would usually take hours, days or even weeks. OLAP does it in seconds.

But there was a problem with the Kentwood company’s cubes.

“Five years ago, I would have said, ‘Great, let’s do it,’” he confessed. “But instead, I said, ‘Let’s talk about the cubes you have now. How many of them are being used?’”

None were, but the IT manager felt that if he built five more …

Catlin asked the IT manager to explain the company’s strategy plan to him and received a puzzled response. Not only had the manager never seen a strategy plan, he had no idea if the company had one — or if it did, if he would be allowed to see it.

“It turned out they had one, and they had spent a lot of time on it,” he said. “So we took that and built one cube and they all used it, loved it — and promoted him.”

While sadly comical, this situation is far from unique. Catlin has set up reporting tools for some of the nation’s most famous brands, and even the most profitable and respectable have the same disconnect.

“I’ve tested this at every meeting I’ve had in the last four or five months, and I’m 10-for-10,” Guest began. “We talk about the need to align IT with strategy, and the secret is: The senior executives don’t know their strategy. That’s why they can’t communicate it. That’s why it’s hard to align to it.”

At a certain level, Guest said, executives realize that most of their customers don’t really know what they want to do. The world is changing and they’re trying to sort it out.

“In places like West Michigan, especially, the sand is shifting under their feet and they’re trying to figure out what to do,” he said. “The global economy is shifting all around us, and people are messing with their strategy.”

As Catlin began working with Guest, he realized, to some degree, that scenario had also applied to his company. He had judged his company by revenue and client satisfaction, return business and where he stood in relationship to his competitors.

“It wasn’t until I had my foot in West Michigan for a few months that I realized I hadn’t done a good job,” he said. “You could argue the ROI — that it allowed you to do this or that better — but for how much was invested, the company didn’t fundamentally change. A lot of opportunity was missed.”

Shortly after arriving in West Michigan, Catlin attended a seminar by Guest at Grand Rapids Community College. In some ways, Guest was Catlin’s polar opposite. He is a veteran of the manufacturing Rust Belt. He does preach metrics, but uses performance scorecards. He cut his teeth at GM in the 1980s during the first wave of foreign competition, and most of his consulting clients are manufacturers.

He feels that West Michigan is at the same stage that Detroit was early in his career. The domestic automakers blamed deficiencies on cultural differences, rather than quality issues within process and product. In time, quality control programs were developed, and along with the ISO9000 precursors came lean manufacturing principles. For nearly a decade, the industry thrived.

Metrics Reporting is based on a similar philosophy.

“Most people benchmark their competition and try to do a little better,” Guest said. “But you don’t want competition.”

Instead, the firm helps its clients usher in bold strategic moves. Borrowing tenets from W. Chan Kim and Renee Mauborgne’s examination of uncontested market space, “Blue Ocean Strategy,” Guest believes companies should base their strategy on innovation. Rather than fight against competition and market forces, he argues, a better focus is to create new markets.

He cited one client, the NFL, for its use of this strategy. The NFL is alone in multiple categories. There is no U.S. competitive scale for the Super Bowl or Monday Night Football. Its advertisers are virtually immune to pressure from TiVo because fans prefer to watch games live. Other examples, while not clients, include Yellow Tail wine, the Segway and Cirque du Soleil. Catlin created new markets with OLAP at his old company.

To accomplish the strategy, Metrics Reporting uses a set of innovation tools appropriated by Guest that loosely mimic the continuous improvement culture of lean manufacturing.

“People think that you can’t teach innovation, that you can’t manage innovation,” Guest said. “They just don’t know how.”    

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