Innovation by Improvement

Point: You don’t have to be the originator of an idea to succeed with it.

Story: Sam Walton didn’t invent discount retailing. Instead, he learned of the idea from an article about two Ben Franklin stores in Minnesota trying self-service. At the time, self-service retail was a brand new concept. Previously, customers came to a counter and the full-service clerks helped the customer by picking items from the shelves behind the counter. Upon reading the article about this new concept, Sam went to investigate. “I rode the bus all night long to two little towns up there — Pipestone and Worthingon,” Walton recounts in his autobiography. “They had shelves on the side and two island counters all the way back. No clerks with cash registers around the store. Just checkout registers up front. I liked that. So I did that, too,” In 1950, Walton’s Five and Dime was the third self-service variety store in the country.

But Sam didn’t simply imitate this one discount retailing idea. He continued to toy & tinker with it and improve it, even as it grew and became successful. He kept his stores well stocked with lots of items, stayed open late, bought goods in bulk to reduce costs, and pioneered communications and logistics technologies to maintain his everyday low price strategy. “As good as business was, I never could leave well enough alone, and, in fact, I think my constant fiddling and meddling with the status quo may have been one of my biggest contributions to the later success of Wal-Mart.”

Howard Gardner, Professor of Cognition and Education at the Harvard Graduate School of Education, sees this style of constant innovation as key characteristic of creative people. He says, it’s not a flash-in-the-pan, one-time-only thing. it’s a whole style of existence. People who are creative are always thinking about the domains in which they work. They’re always tinkering. They’re always saying, “what makes sense here, what doesn’t make sense? And if it doesn’t make sense, can I do something about it?”

Action:

  • Be open to the new and different — seek out odd-ball business practices in out-of-the-way places
  • Study how others do what they do, why they do it, and how it can work in your situation
  • Adopt and adapt those discovered ideas and keep tweaking the ideas

For more information: Sam Walton: Made In America and Creative Spirit by Daniel Goleman, Paul Kaufman, and Michael Ray.

3 Comments »Case study, Creativity, How-to, Innovation, Strategy

3 Responses to “Innovation by Improvement”

  1. yinka olaito Apr 28th 2009 at 05:59 am 1

    Waoh, the angle at which you look at innovation is fantastic. You expose salient knowledge and turn it around to make it new. You really understand your niche. keep this up Andrea

  2. lawrence berezin Apr 30th 2009 at 03:54 pm 2

    Andrea,

    Great, thought provoking post, as usual. How do you define “innovation”. Is there a difference between “innovation” and “change”.

    So much is written about innovation. It is such a valued and valuable part of business. Did Sam Walton do all the innovating himself? Did he empower his employees to share their ideas?

  3. Andrea Meyer Apr 30th 2009 at 04:18 pm 3

    Thanks for your comments, Yinka and Larry. Larry, to your question: Sam Walton did continuous tinkering and improvements himself, but he also actively encouraged employees to make improvements and learn from each other. Many of the innovations Wal-Mart is most known for, such as cross-docking, came from others. In the case of cross-docking, Ron Mayer pioneered that innovation.

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