Contrain Supply and Innovate (or die)

Innovate or die. In nature, the axiom typically plays out in glacier time. But in business, you are "top of the world" one moment, and before you know it, you are the guy who mistook the black-tie event for a costume party (hard to hide when you are dressed up as a woman with a two day old beard...).

Constraining supply is a method to spark innovation. Here is an example to consider. During a recent project we focused on reducing the cost to process client RFQ (requests for quotes) associated to a service which was very technical in nature. On average, we were spending about US$100 to process a RFQ. But there was a challenge beyond fixing the problem. Though the sales team was on-board with the idea of reducing RFQ costs, the team was reluctant to fundamentally change the process status-quo. The sales team preferred the as-is process due to familiarity and the natural reluctance to change. To break the log-jam, we proposed to constrain an important element of the process to force innovation. The element we constrained was the time invested by a Sales Engineer to support the RFQ process. The original processes included a full time Sales Engineer plus time from senior technical staff. We reassigned the Sales Engineer role to no longer support the RFQ process, which forced innovation. With the assistance of senior technical staff, tools were developed to empower the sales team to generate quotes with no or very little technical support. With the Sales Engineer role out, the sales team had incentive to innovate since the Sales Engineer was not available to support quote development. With the tools developed by senior engineering staff, and more importantly, the tools, training, and incentative by the salesteam to develop quotes, the end result was a 50 % reduction in RFQ costs and 30 % increase in RFQ turnaround time.

No question, companies must innovate to survey (or die). Constraining the supply of a critical element of the process will force innovation.

--Raj