How we navigated the end of the shiny disc!

The Canadian SR&ED program is a great example of a Fail to learn or a Fail Ahead concept. Here is the official description:

The Scientific Research and Experimental Development (SR&ED) tax incentive program is intended to encourage businesses to conduct research and development in Canada. Corporations, individuals, trusts, and partnerships that conduct eligible work may be able to claim SR&ED tax incentives for the year.

The program allows the businesses to capture a good amount of payroll and subcontracting fees as well was raw material and even a factor for overhead costs such as electricity, rent, insurance and overall general operating costs.

The government is trying to partner with businesses that want to experiment and develop new ideas. Taking a good portion of the financial risk away. All they ask is to keep records.

Some companies have recognized that innovation without risk (or as much risk) can drive growth.

3M Culture of innovation

For more than 70 years, 3M’s unique 15% Culture has encouraged employees to set aside a portion of their work time to proactively cultivate and pursue innovative ideas that excite them.

The end of the shiny disc?!

We could see the writing on the wall. The day of the shiny discs we had been so successful with was coming to an end. the numbers and margins were diminishing with new technologies coming forward as well as over capacity for injection molding in the industry.

I had an opportunity and would need to move fast in order to capitalize on it. That is, if I can win it. When the Blackberry from Research in Motion (RIM) was coming to its peak, I had an opportunity to bid on some of thier work. It was what was referred to as DOC KITS. It consisted of A CD ROM in a paper sleeve, 2-4 various printed booklets that contained, quick start guides, end user license agreements and safety booklets. All inserted into a 5 x7 inch poly bag and sealed.

There would be a few hurdles to getting this business.

The incumbent supplier had been doing it for years. RIM required every supplier be “approved as a vendor” This required a team from RIM to come to your business and review all off the processes as well as review your financials to assure solvency. If you used an out sourcing , they too would need to be RIM approved!

The incumbent supplier had been taking them for granted and overcharging them for years. I knew with the right quality and price, We could have a good chance of winning it. Also, their current suppliers would only print and package runs of 5000 plus. RIM was releasing new products almost every week and each required wants referred to as a New Product Introduction. Running smaller runs and supplying to Phone carriers initially. The also were supporting a growing Business Enterprise market. This was businesses that needed mobile devices and connectivity for as few as 25 and up to 1000. So, they would need to produce these DOC KITS in quantities of 25 – 100,000 plus.

I n a meeting with RIM to start the approval process. I saw that the low runs were a pain point.

I thought that if we remove that pain-point. The 25-4999 quantity pain and give them better costing for the larger runs we just may get it. In order to do this, we would need to buy some low run capable printing and finishing equipment (to cut , staple and bind the print books and booklets etc).

To add some heat to the fire, our team had never impose content in house and had never printed , folded, stapled and bound books either. they would need to learn at an accelerated rate if we wanted to win the upcoming bid.

Oh ,one more small thing. The Canadian dollar gained strength to the US dollar and the two currencies were now at par. For the last 4-5 years we were enjoying a 40 -50 % exchange. We had an US bank account and our balance sheet showed now that it was valued at 250,000 less. So we needed to get this contract even more now.

The design and production staff had never done imposition of that kind and quantity of pages. For example:

They had never worked on printed signatures or spine width calculations. A signature (sig) is a sheet of paper printed with four or more pages of a book. It is folded to the approximate final page size and to put the pages in numerical order. The more common signature impositions are 4, 8, 16, 32, and 64 pages, which are formed by folding the sheet in half one or more times.

I used to say, It’s like origami when you look at it.

The staff has never worked on spine widths before.

Spine Width is used to calculate the spine or side of the book usually where the title is printed.

Spine width = (Page count / PPI) So it would look something like this: A book with 350 pages that’s printed on a 400-ppi paper stock: Spine Width = (350 pages / 400 ppi) Spine Width = .875. For a hardcover with two 1/8” boards, you could then add .25” to this total for 1.125”

It was a little overwhelming to the staff especially when making a mistake could mean costly errors. One that now with the decrease of the cd business and the currency being at par was not an ideal scenario.

I tried a few different ways to motivate the staff to achieve this goal. I used the ceiling becoming your floor analogy. I tried to motivate with the reinforcement of having job security and a promised increase in pay when goals are met.

We set realistic targets but what really worked to get it done was to reinforce that we would view mistakes and errors as an opportunity to learn and if we keep records we can reach our goals. So mistakes that happened at the beginning during the learning phases would have no negative consequences. This added a sort of buffer or safety net for the team to really let go and develop a process for long term success. We would fail to learn or fail ahead.

It was not easy but once we all “ bought into” the culture to “Fail Ahead” . It wasn’t long before we were able to achieve all the hurdles / goals we had for the RIM bid.

We won the business and had some of the best years the company ever had.

We made our ceilings our floors that day.

Thanks again.