'Kaizen' Versus Discontinuous Innovation
Returned last Saturday after two days in Tokyo. It was obviously very busy with a bunch of meetings but it was fun just trying to understand the nuances of doing business there.
I was told by Fujibayashi-san one of my colleagues in Japan about 'Kaizen' or continuous improvement and how it is an important part of Japanese culture. Having read and heard about Toyota's famous manufacturing practices I immediately recognized and understood what he was saying.
If you think about it it's appeal lies in its simplicity - as you keep doing things you get better and better (learning curve effects) and you are able to make continuous improvements till it is refined to a degree approaching perfection. It is also comforting since it is not disruptive.
On the other hand the proponents of disruptive innovation (now called perhaps euphemistically discontinuous innovation) say that the big break throughs are disruptive. What does that really mean - is it something that changes lifestyles and habits? Perhaps - the internet was discontinuous, so was the internal combustion engine which put the horse carriage out of business. This of course is at an industry level. Would one classify category creators or category killers as being discontinuous? The Walkman for one certainly created a new category 'mobile music' - so in that sense it was discontinuous and then incremental innovation took place via continuous improvement. However that didn't prevent Apple from coming in and taking over the category with the iPOD - if you think about it, it really is Walkman V 100 so Sony had no business to lose it's preeminence in a category that it had created. Some might view the iPOD as being discontinuous but really to me it is an incremental improvement over the original Walkman.
Going back to Japan, this year Toyota is likely to emerge as the biggest car company in the world. It's already more profitable than the big 3 combined (helped no doubt by GM's losses) Isn't that a fascinating story and a vindication of the 'Kaizen' approach. Did they do anything that was discontinuous in their history - is the Prius discontinuous - I don't think so.
I guess a useful academic research paper would be to measure the impact of continuous vs discontinuous innovation in economic growth - what creates more jobs, income gains and so on.
Given that Sony, another top Japanese company came out with a new category, you can say that innovation - discontinuous or otherwise is not the preserve of any culture. Gaming is another business where one of Nintendo/ Sony/ Sega (who?) created a new category.
Therefore it is hard to conclude that any national culture would lead to more of one or the other - perhaps it is company culture, perhaps it's the leadership's outlook towards what is more economically efficient, perhaps it's the patent regime - did more innovations take place before patent law was enacted in the US or after- I'd be interested in knowing.
Does IP protection for 17 years (why 17 years) help or hinder?