The inner innovation

There are three types of companies on the innovation arena:

• Innovation companies - which change the behavior of their customers by making them buying new products. Examples include Intel, SAP, Red Bull, Pfizer, Metro and Nokia.

• Innovative companies - which change behavior themselves in order to become more effective. Here we find Toyota, Ryan Air and Soutwest Airlines and Walmart.

• Innovative innovation companies - which I think are the most exciting. These companies use their inner innovations not only to become more profitable or their products less costly. They integrate the customer in the supply chain and let the customer become part of either the production (like Sandvik Coromant offering industrial tools on-demand) or the delivery (like IKEA). Or they manage to persuade consumers to actually pay more for something that never have been offered. Like fast delivery and freedom of choice.

American Leather is such a company. By adopting a production philosophy from the Japanese car manufacturings ideas of Lean Production they have manged not only to grab a fair share of the American furniture market. They also now manage to keep the so much bigger Asian threat away by sticking to their oustanding delivery standards. Virginia Postrel has the story.