Operative innovation, an effective competitive tool

Daisy Escobar. Professor. IE Business School

18 September 2013

Doing things in a different and better way that enables the company to put their prices down is not just a pipe-dream. Operative innovation is now playing a key role in many leading international business organizations.

Toyota, Wal-Mart, Southwest Airlines and Zara are among leading companies worldwide that are famed for their extraordinary results in terms of both market and finance. But not so many people know that behind their success lies a serious commitment to operative innovation, that is to say how they work in a totally different way to the norm in order to better satisfy clients and incur fewer costs.

Toyota exploded onto the market with a new operating model, lean manufacturing, that would permit it to produce a broad variety of cars at competitive prices. Wal-Mart reinvented its distribution model, with cross-docking, an original way of reducing intermediate storage costs, as its most widespread “invention”. Southwest Airlines, an original low cost, cut the price of its flights by eliminating activities that did not bring any added value to customers. And Zara was the first company to bring to market the latest fashions far more quickly than its competitors, thanks in part to its innovative design process.

In Spain, in addition to Zara, we have good examples of firms that are constantly searching for new ways to do their activities and are rewarded with fabulous results. A recent round table organized by IE Business School, which formed part of the Global Operations Forum, a joint initiative of IE Business School and Accenture, was attended by a select group of such companies.

García Carrión  is now the No. 1 winery in Europe and No. 4 in the world. Luciano García Carrión Corujo, international director, showed us a company where top managers, José and Fala, president and vice president respectively, and himself, are passionate about what they do. They get involved in tasks, they know how to do them, and they are constantly searching for opportunities to innovate in order to be more competitive. Thus, García Carrión is highly innovative in the field of logistics, which can have a considerable impact on the company’s strategic objectives, and which has enabled it to make its product reach anywhere in the world, at a reasonable price. There is no doubt that with its directors’ imagination and charisma of its directors, both of which are necessary to drive operative change, the company is not far off reaching Jose’s objective of being “the top winery in the world”. 
 

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