During the early 1900s shipbuilders and shipping companies worked hard to make ocean freighters faster AND more fuel efficient. To a large degree they were successful, speed was up and fuel consumption was down, however their economies of scale became progressively worse and they were losing money BIG TIME!
The owners and managers of these large ocean freighters suffered a serious incongruity between expectations and results. They assumed that a majority of the costs were incurred while the freighters were sailing through the oceans. In reality however, the real costs of the freighter are incurred when the ship is at the port sitting idle. So no matter how fast and fuel efficient ships would become, the industry would continue declining!
True innovation occurs when individuals are able to bridge an incongruity, which is what the industry leaders were able to do. Once they realized where the true costs were, the innovations were obvious.
The shipping industry pulled a “Houdini” and began applying some of the best practices of the railroad and trucking industries. Those industries were utilizing roll-on and roll-off container ships for several years, something the shipping industry couple replicate.
It’s important to note that it was a shift in viewpoints, not in technology, that changed the economies of ocean shipping and helped save the industry.
Have you ever faced an incongruity between your assumptions and reality? How did you overcome the issue?
This story covers one source of innovation, “incongruities”. For more information on this topic check out the full article here: The Discipline of Innovation by Peter Drucker.
Article submitted by Bank of America For mid-market companies, business success and responsible growth aren’t mutually exclusive. In fact, prioritizing responsible growth is becoming increasingly important, and successful companies are making sustainability central to their growth strategies. Beyond good corporate citizenship, they are recognizing the intrinsic link between the strength of their business and that of the communities and economies in which they operate. Leading your growth with those goals in mind builds resilience and better solutions for the future. Consider the following: Responsible growth companies perform better. Companies that consider the impact of risks and opportunities on the environment, local communities and society may produce better financial results than those that don’t. Additionally, 90% of companies believe a sustainability plan is important for remaining competitive. Responsible growth companies attract investment. A 2016 study by MIT Sloan Management Review and Boston Consulting Group surveyed 3,000 executives and managers from more than 100 countries. Findings revealed that 75% of senior executives in investment firms agree that a company’s sustainability performance is materially important to their investment decisions, and nearly half would not invest in a company with a poor sustainability record. Ninety percent of executives see sustainability as important, but only
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