Man vs. machine

Ten years ago, Rick Schneider says there was a mantra at FANUC Robotics America Inc.: “Do it right the first time.”

Efficiency was paramount. Mistakes were the enemy. It was all about meeting customer needs in the shortest time with minimal snags.
But a funny thing happened on the way to maximum efficiency, says Schneider, president and CEO of the $500 million developer and
manufacturer of robotic components.

“I found (that way of thinking) was very detrimental to innovation,” he says. “Doing it right the first time means you had better not try
anything too out of the ordinary, because if you want to do it right the first time, it means you’d better not make a mistake.”

He says mistakes are inherent to the innovation process. In fact, some of the best innovations originate with mistakes.

Schneider says he has strived to create a culture where mistakes are not swept under the rug. Instead, they are set on the table and
examined to find out what exactly went wrong. He says he wants his employees to be problem-solvers, not perfect performers.

“What I’ve found is that it’s very important to have a culture that, if someone makes a mistake, you don’t come down hard, reprimand
them or punish them.,” he says. “What you do is say, ‘OK, what is the root cause of that problem, and what are the ways and processes
we can put in place so that problem doesn’t reoccur?’”

Schneider says at FANUC Robotics, the object is to always learn and to use what you’ve learned to come up with new solutions for
customers.

He says opportunities to learn are everywhere, in just about any business. You just have to know where to look.

Defining the direction
If you think a mistake-tolerant culture means employees sling their ideas against the wall the way Jackson Pollock slung paint at a canvas, Schneider says there is more to it than that.

To learn from mistakes, he says you must first define what a mistake is, which means you must clearly define your company’s direction.

“One of the first things is that everyone needs to know where you are headed as a company and what your targets and
key objectives are,” Schneider says. “Innovation is only helpful to a company if it’s in line with what you are trying to accomplish.”
Schneider takes every opportunity he can to interact face to face with his approximately 1,200 employees, reinforcing the company
vision and objectives.

A company being pulled in different directions is an unfocused and ineffective company, but he says he is consistently blown away by
what can happen when everybody understands what the company is all about.

“A graphic I use at a lot of my presentations shows two people in a canoe,” he says. “One is rowing in one direction, and the other is
sitting at the opposite end rowing in the other direction, and the caption says, ‘Boy, the current sure is strong.’

“What I find is that if you get everybody rowing in the same direction, it’s amazing what you can accomplish. But you have to make
sure you really communicate the challenge you’re working on and your overall direction.”

Schneider says the job of senior management is not to micromanage the innovation process but to give employees the resources they
need to innovate, to ask questions such as, “What do you need?” and “What barriers do we need to take down for you?”

Schneider fosters interaction between departments and levels of the company with cross-functional meetings. A number of departments and levels of management are represented at each meeting; the object is to get people from different parts of the company discussing problems and solutions within the innovation process.

Before he began having three to four cross-functional staff meetings per month, he said the story was quite different.

“We’d be sitting, talking about a lot of critical issues that affect the company, and I’d realize the staff really isn’t close to a lot of problems and issues within the company,” Schneider says. “Now, we don’t have the entire staff there, but we have people from all areas of
the company, from the manufacturing floor, from finance, and now when we talk, we’re getting their perspectives.”

He says bringing different perspectives to the table is critical when discussing a new idea. Often, a manager in one area of the company
will have a very narrow perspective on an idea as it pertains to his or her department. Exposing that person to another mindset will help
him or her take a better overall view of the idea and can make the end solution that much stronger.

“You think you really understand in detail what is going on in the company, but a lot of times that’s just not the case,” he says. “But
when you get that cross-functional team, from myself down to all different levels of the company, you start talking about an issue, you
start to get some great ideas and suggestions, and you can learn a lot.”

Dealing with mistakes
FANUC Robotics has replaced “Do it right the first time” with a new unofficial motto: “If you make a mistake, let’s not repeat it.”
Schneider says a company that values innovation needs employees who are passionate about being creative and aggressively pursue
their ideas. Many times, that flies in the face of a company culture that values streamlined processes and efficiency.

But he says that if you don’t give employees room to learn by doing, and the residual mistakes that come with it, you’re going to choke
much of your company’s ability to grow.

“One story I tell often to employees is from a company I worked for several years back,” Schneider says. “Management would come
out and announce a decision, and the only thing we could think of that must have been behind the decision was them saying,

‘What could we announce that will upset the most employees?’”

If a mistake occurred, he says that chances are it was due to a communication breakdown at some point — either someone
didn’t have the right information, or someone didn’t have enough information.

“If I make a decision and you look at it and say, ‘That was a terrible decision,’ one of two things happened,” he says. “First, it
was a bad decision, and I just didn’t understand some of the things that were going on in the company. Second, it was a good
decision, but we haven’t explained to you the background on why we made the decision.”

In addition to using company meetings and presentations as an opportunity to reinforce the company objectives, Schneider also
uses interaction opportunities as a time to solicit feedback from employees. Schneider says employee feedback is one of the best
ways to take something that went wrong and begin to form it into something that helps the company. The employees on the innovation and customer front lines are the people who know best what is working and not working.

“Every year, we have an employee survey,” Schneider says. “We ask a long series of questions. We want you to tell us what you
like, what you don’t like, what we need to work on. I love those surveys because the best way to drive innovation and improvement is to find out what’s broken.”

Schneider says mistakes and shortcomings are a fertile ground for innovation.

“I sometimes joke with (employees), ‘If we don’t have any problems, we’re in trouble,’” he says. “If you look at where innovation is coming from, time and time again, it’s coming from problems. Sometimes they’re major problems, but the bigger the problem, the bigger the innovation.”

Customer input
Schneider says he has never had a customer visit that he didn’t feel was worth his time.

“Virtually every time I go to visit a customer, they say something during that visit which is a good idea,” he says.

If every innovation should address a customer need, he says it should follow that customers should be your best source for innovative
ideas. If a customer has a problem with your product or service, it might be difficult to face the music and address its concerns. But that
problem might be the start of something new for your company, a new problem that requires a new solution that will benefit both the
customer and you in the long run.

But Schneider says you have to reach out to customers and, in essence, harvest their problems for new solutions.

“Sometimes visiting a customer is like going to the dentist,” he says. “The dentist is drilling a cavity, then he fills it. Sometimes going to see
a customer can be pretty painful like that. If I get called out there, it’s often to talk about a serious problem.

“But you go to the dentist to fix the problem, to fill the cavity. You don’t stop visiting the dentist because it’s painful, and you don’t stop visiting customers because it’s painful.”

Bringing customers’ suggestions back to your organization’s innovators is one of the most valuable services you can perform for your
company.

“Any key innovation usually comes from a customer coming to us with a problem,” Schneider says.

Simply attempting to sell your ready-made solutions to customers defeats the purpose of innovation, he says. You should always keep
yourself abreast of what is going on with your customers, how they view your company and how satisfied they are with your products.

Schneider relies heavily on customer satisfaction surveys as a gauge for what FANUC Robotics needs to do better. That information,
combined with face-to-face interaction with customers, paves the way for the company’s innovation process.

“What makes customer interaction important is that a lot of times as a company, you want to go out and sell your solution to a customer,” he says. “Here’s our product, here’s our solution. But if you take that approach, you really aren’t going to learn a lot or generate
a lot of innovation.”

The flip side, Schneider says, is instead of matching a product to a customer’s need, match a customer’s need with your company’s most
creative thinkers. If you find out what your customers are really struggling with, you can better solve their problem and further your company’s reputation as innovators.

“If you go out to a customer and say, ‘What are your challenges? What are you struggling with?’ then you bring those challenges back to
your product development team, your application and systems group and say, ‘What is a way we can solve this customer’s problem?’” he
says. “That’s where I find really key innovation comes from.

“What I tell our customers is that you usually don’t see innovations coming from a product development engineer sitting in his cube
thinking about what would be a great innovation. It usually comes from a customer’s problem that our engineers work on. Then they
come up with a creative solution.”

HOW TO REACH: FANUC Robotics America Inc., www.fanucrobotics.com