• Strategy
  • McKinsey & Co.

From Push to Pull: The Next Frontier of Innovation

Some companies are learning how to take a more creative approach to mobilizing their resources.

Ever since 1911, when Frederick Winslow Taylor published The Principles of Scientific Management, businesses have pursued efficiency with a focus that borders on obsession. Nearly a century later, CEOs and management authors are still writing hymns of praise to the benefits of executing operations more efficiently than the competition does. This fixation has yielded some highly precise approaches to managing modern institutions and technology. Although these practices vary in their details, they share a common foundation: pushing resources into the areas of greatest anticipated need. In today’s business world, highly automated factories or service platforms, supported by rigid and standardized processes, deliver resources to the right places at predetermined times. In information technology, massive enterprise applications specify activities to be performed and resources to be deployed to meet anticipated demand. In education, standard curricula expose students to codified information through a predetermined sequence of experiences — an approach many corporations follow in their employee training.

In each of these examples — and in “push” systems generally — the core assumptions are that companies and other institutions can anticipate demand and that mobilizing scarce resources in previously specified ways is the most efficient and reliable way to meet it. But the efficiency of push systems comes at a stiff price, for they require companies to specify, monitor, and enforce detailed activities and tasks. This rigidity necessarily restricts the number and diversity of the participants in push models, thus limiting the innovation and learning that can take place in them. It also tends to turn workers into mere instruments of management at a time when self-directed effort from a broad range of employees is ever more essential to big corporations.

The highly specified, centralized, and restrictive nature of push systems prevents companies from experimenting, improvising, and learning as quickly as they might, both throughout their own organizations and across others. Push systems not only inhibit product innovation but — even more important — make it much harder to implement incremental process innovations rapidly. In a world where the relative pace and trajectory of capability building are of constantly rising importance, push systems thus hinder companies from participating in the distributed resource networks that are now indispensable to competitive advantage. The next frontier of innovation will require the broader adoption of pull capabilities as well as less reliance on traditional push systems, which, as demand becomes more and more difficult to forecast, increasingly fail to deliver even the efficiency they were designed to promote. Organizations that use them either pile up inventories or go through costly somersaults in an effort to keep up with unanticipated market shifts.

Signs of a New Approach

Many companies continue to operate on the flawed assumption that demand is intrinsically foreseeable. But others are beginning to embrace a more flexible approach to setting in motion (or mobilizing) tangible and intangible assets (or resources), which may reside within or outside the company. This new approach might be called the “pull” system of resource mobilization. Its early elements began to emerge from Toyota Motor’s lean-manufacturing system in the 1950s, when the company began pulling resources into the assembly line as needed rather than allowing inventories to pile up during production. But more versatile and far-reaching pull systems — which extend beyond production and, indeed, beyond the enterprise itself — are now beginning to emerge not just in manufacturing and supply chain operations but also in arenas as diverse as pharmaceutical R&D and the media. These early pull models, driven by changing strategic and operational needs and facilitated by the Internet, are visible primarily at the periphery of more mature push models. Often, as in education, they are emerging under the radar, in unexpected areas.

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