For every “Apple” type company in America, there are dozens (hundreds?) of companies that operate in a low-interest, commodity realm. Many of these organizations will work hard to develop new products, but lack the ability or courage to do so in a bold way. As a result, they are often frustrated at the lack of tangible results from their innovation efforts. In their minds, the improvements they have brought to market are exciting and clearly meet the unmet needs of their consumers. So why the low level of market success?
For many of these categories, the three hours the company spends brainstorming new ideas is more time than their consumers spend thinking about the same category over their entire lifetime. As a result, the bold new improvement the company provides goes completely unnoticed by the marketplace. Think about this for a moment. On a given Saturday you find yourself in the midst of an unexpected home plumbing project (that does happen to people other than me, doesn’t it?). You realize you need a Monkey Wrench. You drive to the store, go to the plumbing department and are looking to buy right now. You see a tag hanging from a given wrench that claims “50% better than our previous design”. You’ve never owned a Monkey Wrench (I don’t think the things actually wear out, do they?), so you have no preconceived notions of the problems that existed before. You can’t visually distinguish between this new “better model” and the competitor next to it on the shelf… You can’t compare the new with the old, so that doesn’t help. My guess is you probably make your decision based on price. The Monkey Wrench company looks at their sales over the next two quarters and sees that they have experienced no significant increase in volume, and they decide that their innovation efforts were a wasted investment.
So the question is… Is it wrong to invest in ongoing product improvement? No. In most commodity situations that level of investment is required to maintain the shelf space that you currently have at retail. But recognize it for what it is; maintenance. If you want to drive growth, you have to innovate in a big enough way to first bring attention to your (oft-neglected) category. You have to provide a benefit that spans well beyond what the traditional product has offered. As an example… What if the Monkey Wrench company focused on expanding the usage of this now highly specialized tool? What if with some reconfiguration and new design, this same product could benefit a consumer across various projects within their home? If this became the next “must-have” tool, people would talk about it, it would appear in magazines and on cable shows and pretty soon people would come to the retail aisle in search of it. What would the return on that innovation investment be?
The bottom line is this. Companies that find themselves in a commodity status cannot afford the luxury of incremental innovation. If they’re not making a big enough difference to attract attention to their category first and to their product second, their efforts will be wasted. A design change that seems huge to the product managers in charge, may go completely unnoticed by the paying consumer. It’s got to impact their lives in a significant way to get their attention. Innovate big or go home!