Looking outside one’s own industry has led to many remarkable innovations and disruptions. All too often, managers lack the mandate, authority, or confidence to make it work. They can overcome these obstacles by building a team to carry out the search for ideas from outside; providing strong, powerful leaders; and carefully preparing the sales pitch.
As companies struggle to recover from the pandemic, I’ve seen a famous piece of advice circulate: executives are being told to look to other industries for fresh ideas.
The classic example is Henry Ford’s invention of the assembly line, an idea he stole from the meat industry. Abbatoirs used a “dismantling line” to shunt carcasses along a steel rail from worker to worker, each performing a specific task. Ford simply flipped the concept and revolutionized production.
It’s a good idea to look at other industries in this way, but my experience as a corporate strategy consultant for three decades teaches me that it doesn’t always work. In what follows, I’ll explain the challenges of the approach – and how to overcome them.
Challenge 1: Lack of mandate
Blair is a factory manager for a multinational in the premixed concrete industry. I asked him if he looked to other industries for “creative solutions” in terms of customer service or price, for example. His answer was succinct: “It’s not in my job description.”
His job is to ensure that his batch processing plant operates efficiently, that supplies are always within reach and that customers and staff are satisfied. He is clearly focused on the industry and any thinking outside the box that could come out of another industry is just not on the agenda. I know from experience that it is not on the agenda of anyone else in his company, all the way to the top.
Challenge 2: Lack of authority
Veronica is Sales Manager for a media company. Her specific job is to sell television time to advertising agencies. She also manages five representatives. When I asked her if she wanted to look at strategy ideas outside of her industry, her answer was clear. “It’s not my job to do that and even if I did, I don’t have the authority to do anything about it.”
Veronica has a lot of exposure to other sectors in her role in advertising sales, and there are times when she is impressed with the strategy she sees in use. But she doesn’t have the power to try them out in her own business, so her insights go untapped.
Challenge 3: Lack of confidence
This concerns the fear that making a translation from one industry to another will be difficult – or worse, impossible. Health professionals are particularly susceptible to this, believing that their challenges are unique and that they cannot possibly transfer initiatives from another industry to their own.
One of my clients, a retirement home, had issues with his safety record. This had a direct impact on insurance claims and insurance premiums, as well as on the ability to attract and retain staff. It followed industry standards and practices so little could be learned from other industry participants. I nominated Dupont, an industrial manufacturer, from outside the retirement home industry, because it was known as a safety fanatic. But I was met with skepticism from the staff. How is a manufacturer relevant to a retirement home?
Overcoming the Challenges
With so much to gain from looking outside your industry, it would be a shame to pass up an opportunity because of obstacles like these. Here’s how to get past them:
Assemble a powerful team
Lack of mandate and lack of authority are overcome by setting up a competent team. Let’s say you decide to visit three organizations outside of your industry for answers. Your “breakthrough team” should consist of three to ten people, made up of individuals who can make a difference when results are bought back. If the CEO is not part of the team, make sure there is a direct line to them. You want strategic change, not strategic stagnation. Also make sure your team has an impact. For true strategy initiatives, focus on the strategic factor where you’ve run into a wall that would clearly make a competitive difference if significantly improved, for example product quality or customer service. Remember that a visit to a company in a different industry is not a fishing trip. That organization has no time to lose on an ‘industrial visit’. Your purpose should be clearly stated and explained. Otherwise, you’ll get a clear “no” from the company you want to target, or you’ll be left with nothing.
Provide strong leadership
Address the lack of trust through strong leadership. Senior doctors, Martin Elliott and Alan Goldman, at London’s Great Ormond Street Hospital for Children saw a link between their operating rooms and Ferrari’s pit crews in the race car industry. The specific comparison was between how pit crews changed tires and refueled a car quickly and flawlessly, and the handovers for medical teams during team changes in complex operational cases. The leadership of Elliott, Goldman and others was key to the credibility of the project and the outcome. The ten-member team in the retirement village business consisted of the CEO and director of Nursing. The leadership was there from the start through the involvement of the CEO and was able to break through the initial skepticism of the staff.
Prepare your sales pitch
If you’re planning on going down this road, consider why an organization in another industry might want to receive a visit from a group of unknown executives like yours.
The reasons why companies say ‘yes’ is my experience, ranging from being a good corporate citizen to improving staff presentation skills. Others include being beneficial to staff morale by knowing that they have been singled out for examination by another organization. Plus, during your visit, the targeted business executives will need to think about what they’re doing and how they’re doing it — and engage them in a helpful self-examination. Remember that at the end of your project you will have something of great value: a report. You may undertake to share a summary thereof with the management of a targeted company – using names appropriately disguised, of course, to protect confidentiality.
Looking outside of your industry for strategy improvements and breakthroughs is a good approach. The main reason why it doesn’t work more often is slowness. Doing what you’ve always done and in line with industry standards and expectations is much easier and more comfortable than looking at other industries. This fact offers you a potential competitive advantage – if you dare.
This post What prevents managers from finding inspiration in other sectors? was original published at “https://hbr.org/2022/03/what-stops-managers-from-looking-to-other-industries-for-inspiration”