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“A relentless elimination of waste achieved through the constant pursuit and creation of new knowledge.”
That phrase from a presentation that Dr. Ted Duclos, vice president and general manager, Global Fluid Power Div., Freudenberg-NOK Sealing Technologies (www.freudenberg-nok.com), gave at the recent CAR Group Management Briefing Seminars (www.cargroup.org) is not the sort of thing that one ordinarily hears from an executive.
Sure, the “elimination of waste” part is common enough, as people still recall and even sometimes continue to implement things they learned in The Machine That Changed the World (imagine: that book came out in 1991, and it is still relevant, which can’t be said of too many business books during a more truncated time period). Waste. Muda. Bad.
But “the constant pursuit and creation of new knowledge.” What’s that all about? Maybe the pursuit of new knowledge is somewhat straight up—arguably, you are potentially learning something by reading things like this (assuming that I am doing my job, that is)—but isn’t the creation of new knowledge something that other people do, like the guys at MIT who did the work that culminated in The Machine That Changed The World? After all, we have day jobs. That creation of new knowledge is best left to the people in academe or at consultancies or elsewhere.
But Duclos argues this isn’t the sort of thing that ought to be outsourced. It is the responsibility of each and every individual.
Duclos started his career in R&D. During his presentation, he pointed out that when he was a young engineer, he discovered that other people in the organization where he worked back then were not all that supportive of R&D, as they saw it as a cost, not a benefit. “As a young engineer who truly wanted to contribute to the success of the company, and who truly believed in the ultimate success of the projects I was working on, this was disheartening. What if they were right? What if R&D was just a waste of time and effort?”
And so he thought about it. Thought about it for a long time. Thought about it as he moved on to other jobs. Thought about it when he joined Freudenberg-NOK in 1996, working his way up to vice president of Corporate Technology, then Chief Technical Officer, and to his present position running a global division.
And what he came up with is this, what he calls “a fundamental property of knowledge”: “You see,” Duclos said, “knowledge loses value over time. Any new thing, any new idea, any new bit of knowledge, when it is first known, has value to the possessor because they know something others do not and if they are clever they can exploit the value of that knowledge over time. But eventually, knowledge has a way of becoming commoditized. More and more people learn it and the possession of it is less and less unique, so it loses its value to any particular person.”
In part, this solved his soul-searching vis-à-vis the value of R&D. To be sure, any company that wants to remain relevant needs to have new ideas, new knowledge. This can lead to new processes and new products.
But he’s thought further about this as he gained experience and responsibility. And as he told the audience, “I’ve come to realize that the responsibility to create new knowledge is actually the responsibility of all the people in all parts of a business.”
It isn’t something for those guys in R&D or at universities or government labs or someplace else. It isn’t for other people. It is for each of us.
That evening, Duclos and I talked at a reception. He explained with more than a modicum of passion his belief that it is essential for people to push forward to create new ways of doing things, of creating new products. I countered that there are generally too many people in positions of power and authority who like things as they are, that new and different are threatening to them. . . “Change is for other people.” “We don’t do that around here.” “We’ll be innovative when conditions improve.”
He acknowledged that that is the case—but then pointed out that companies with leadership like that tend to be companies that are not long for this world.
Freudenberg was founded in 1849.
I think he’s right.