The bigger the crisis, the more innovative we have to be. Think Apollo 13. And consider how wars push the frontiers of invention. Companies create and innovate at a hectic pace and can create the basis of their future success. In 1917 during the First World War, for example, Kodak developed aerial cameras and trained aerial photographers for the U.S. Signal Corps.
And then there are the lucrative military orders which can make a company – and introduce millions to its products. In 1917 the US government placed an order for 3.5 million razors and 36 million blades with Gillette. The entire army needed a shave.
The Second World War (1939-1945) was one of the single most important events in the evolution of management practice and theory. It coalesced the fledgling human relations school of thinking with the mass production techniques which had been mastered over the previous forty years.
Production was on a massive scale. Donald Nelson of Sears and chairman of the War Production Board from 1942 to 1944 later tried to put things in perspective: “The American war-production job was probably the greatest collective achievement of all time. It makes the seven wonders of the ancient world look like the doodlings of a small boy on a rainy Saturday afternoon.”
This may have over-stated things slightly and it is difficult to compare the creation of the Hanging Gardens of Babylon with the mass production of bombers. But the raw statistics are impressive. The United States produced twice as much as Japan and Germany combined. Productivity went through the roof. The depressed economy was kick-started in spectacular fashion. American GDP shot from $91.3 billion to $166.6 billion in 1945. Thanks to wartime production, manufacturing output almost doubled and agricultural output rose 22 percent. The investment in winning was enormous. The American government doubled its total expenditure, spent a total of $400 billion (double what it had actually spent in its entire history prior to 1940) and, by the end of the war, was saddled with around $260 billion of debt.
In total America produced 86,000 tanks; 296,000 aircraft; 15,000,000 rifles; 41,000,000,000 rounds of ammunition; 5,400 merchant ships; and 6,500 warships. This was achieved through virtually all of industrial output being turned over to the war effort.
America’s entry into the Second World War saw the entire Harley-Davidson production dispatched to the military. A 1942 Harley Davidson brochure read: “Off the assembly lines they roll, sleek, streamlined Harley Davidsons for Uncle Sam’s forces and the armies of our allies…”
IBM placed its facilities at the government’s disposal and expanded its product line to include items such as Browning automatic rifles. IBM chief, Thomas Watson set a nominal profit of one percent the proceeds of which went towards a fund for the widows and orphans of IBM war casualties. IBM kept all employees entering the war on the pay roll.
Central to the American war effort was General Motors president, William S. Knudsen, who was responsible for industrial production at the National Defense Advisory Council and then in charge of production for the War Department. General Motors became America’s largest defense contractor. More than 90 percent of GM’s total production between 1942 and 1945 was of war material. By 1943, American automobile industry output was double its prewar capacity and as the war reached its finale in Fall 1945, the car factories accounted for around 20 percent of the total amount of weapons and war material produced in the United States. Plants which had been idle before the War, thanks to the affects of the Great Depression, burst into life. By Spring 1941 U.S. airplane production was hitting record levels — in March 1941 1,216 were produced.
Two-thirds of the war items produced by GM and other carmakers were entirely new to them. Cadillac and Chrysler made tanks; Oldsmobile made heavy caliber shells. Other companies found themselves shifting businesses — AC Spark Plug made machine guns, Fisher Body made B-25 airframes, and Packard made engines for PT boats. (Of course, this wasn’t the preserve of American companies. Elsewhere companies were venturing into unfamiliar territory. In Japan Konosuke Matsushita made ships and planes as part of the Japanese war effort – even though he had no experience in either area.)
And the lesson from this flurry of innovation and production? Focus. Clear and simple objectives are the mothers of invention and the creators of energy.
This was brought home to us visiting the design company IDEO. It practices a version of grown-up management based around projects. In keeping with its unwillingness to embrace growth for its own sake, at IDEO multiskilled project teams change from project to project. Projects are its culture. They provide its focus.
The company’s folklore (captured in Tom Kelley’s book The Art of Innovation) is brimming with stories of supermarket trolleys being redesigned in a week and how the company developed the first Apple computer mouse. Amid stories of developing the first single-use instant camera, creating all-terrain eyewear, and reinventing the light switch, there is no mention of costs and profits. The unspoken understanding is that brilliant, problem-solving design makes money for the company and its clients. It is user-based design. At the heart of the business is using design thinking to help clients be more valuable. At the heart of innovation is giving people a cause, a deadline, a focus to their activities.
Stuart Crainer, The Management Century, Jossey Bass, 1999
Tom Kelley, The Art of Innovation, Harper, 2001
This was originally published in What we mean when we talk about innovation by Stuart Crainer and Des Dearlove (Infinite Ideas, 2016).