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How can a new business enterprise survive in a world of total globalization? What are the main principles it must follow? Which principles possess the highest priorities and can be defined as imperatives for business survival?
The 40 inventive principles of the Theory of Inventive Problem Solving (TRIZ) help answer these questions. There are numerous examples that demonstrate the successful application of these principles in non-technical fields, such as business management, social relations, quality management, marketing and others.
Based on his research and development, engineering and quality management experience, the author has attempted to formulate business survival imperatives using the 40 inventive principles of TRIZ. The imperatives are divided into several hierarchal categories:
These business survival imperatives may be useful for managing new and growing companies.
A. Set the right priorities – the top priority should be research and development (R&D). Competitors, customers, suppliers, employees, shareholders and other interested parties are prioritized afterward.
B. Cura nihil aliud nisi ut valeas – "Take care of nothing except that you do well." (Cicero)
C. The supreme goal of a business is to constantly develop and introduce new products, which possess unique features and provide significant advantage over the competitors. Avoid the "Seven deadly diseases that management must cure." (W.E. Deming)
Search niches for the creation of new products inside existing market segments.
Establish appropriate back-ups for business interruption and contingency planning.
Be aware of the s-curve for marketing and sales evolution – different products or service life stages: "problematic child," "star," "milky cow," "outsider." A new "star" must be timely if replacing the current "milky cow."
Managers may replace, reposition or downsize manpower in marketing, finance, engineering, production, quality, maintenance, purchasing, safety, human resources and other departments without a significant negative impact. All of these employees are important, but not essential. Only outstanding scientists, designers, technologists – properly selected and nominated to the right positions in R&D, are vital. Without these individuals a business will not survive in the long-term. But short-term, without someone highly skilled and creative in financing, the business will not survive long enough to make R&D pay off. It is important that the chief executive officer and other senior managers have finance and relationship skills, not just R&D, to get and retain investors.
"Vital few and trivial many." (J. M. Juran)
Periodically revise R&D activities to inject new enthusiasm into projects.
A. Invest in continual education, knowledge and skills renewal of the R&D personnel.
B. Expose key designers to external events: conferences, exhibitions, lectures, seminars, etc. Let designers learn from customers, suppliers, business partners and organizations from the same or other fields.
C. Use all available resources.
D. Provide key R&D personnel with the best possible employment contract conditions: salary, insurance programs and other benefits.
Reddite ergo quae sunt Caesaris, Caesari – "Give Caesar what's Caesar's." (Vulgate Bible)
E. Encourage breakthrough solutions, knowledge – patent grants for inventions by giving appropriate rewards: bonuses, promotions, status elevations, etc.
F. Foster the self-esteem of R&D employees.
G. Thoroughly protect the intellectual propriety rights of inventors, and share with inventors the profit received from their inventions. Suum cuique – "To each what he deserves." (Cicero)
Institute self-benchmarking and internal competition in R&D.
Dismiss persons who are non-effective and replace them with better candidates. This will preserve R&D capabilities and lead to the creation of new products.
Businesses need people who are not only idea generators by themselves, but can hijack on the ideas of each other, amplifying their creative powers and developing breakthrough know-hows and inventions.
Choose for R&D the outstanding, highly creative, multi-skilled, "renaissance" people.2
Multi sunt vocati, pauci vero electi – "Many are called, but a few chosen." (Vulgate Bible)
Appropriately protect R&D activities from the competitors' intelligence, and use proprietary rights protection – patents, licenses, trademarks, copyrights, etc.
Continue to measure employee morale to prevent R&D personnel from transferring to a competitor.
Build entrance barriers for competitors by enhancing a product's advantages.
Inversely, strive to employ prominent specialists from competitors' R&D.
Promptly learn lessons and derive conclusions from each defeat in competition.
Use the competitors' success for benchmarking providing a stimulus for re-gaining the primary position in the market.
Get intelligence and inverse engineering on the competitors' products in order to anticipate their future activities and develop counter-measures.
Introduce smoke-screen misinformation to disguise confidential R&D activities.
Never allow the customers to gain supremacy over the business. The customers depend on the business just as the business depends on them.
Cooperate with customers to create new products with unique features.
As customers' expectations increase, businesses must diversify their products. Similarly to principle 3: local quality, products should specifically fit a local (customer) need.
Provide a product that exceeds customer expectations because of unanticipated extra features that bring about an element of surprise – the "wow" factor.
Principles 8 and 3 focus on making each product specifically fit a local (customer) need. Strive to achieve design-wins at brand name customers. They can promote the product.
Run b-site customer pilots to gather information on high-risk products prior to distributing them to the general market.
By having a unique product, businesses acquire a strong market power and may dictate their terms to customers. Actually, the business becomes a monopoly producer. Nevertheless, it must preserve parity and partnership relations with its customers. The reward is great – their loyalty and retention.
Make designers act like the customers.
Establish long-term business alliances with key customers.
Use customer complaints and field failures as not only valuable feedback, but also opportunities for improvement.
Be wary of rare customer complaints. This could indicate a lack of customer candor and an unwillingness to share information or employee screening of information.7
Enlist customers into the R&D activity loop.
Anticipate and nurture future customer needs.
Have customers advertise the product.
Excite customers about the product by providing them a sense of advantage to be gained over their competitors.
Transfer non-core activities to the best subcontractors.
Avoid suppliers that might become a monopoly and dictate their terms.
If a business fails to find a second source or an alternative design solution, it should merge with a single-source supplier.
A unique product cannot survive in the market if a business relies on a single-source supplier for critical parts or materials.
Audaces fortuna iuvat – "Fortune favors the brave." (Virgil)
Gennady Retseptor is a quality manager of AVX Israel Ltd, the Thin Film Operation Plant of AVX Corporation, Kyocera Group Company. He received a masters degree with honors in Microelectronics from the Moscow Steel and Alloys University. Gennady Retseptor is an ASQ Certified Quality Manager since 1999. Contact Gennady Retseptor at gennadyr (at) avx.co.il.