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!
We all know that it is important to sell our products or services based on the benefits they provide, not on the features they contain. But why is that so hard to do? We just had an internal meeting this morning on some of the services our company offers. One of the key phases of our process is Ideation, a time that we spend with our clients digesting what’s been learned from their consumer and generating ideas for new products and services that can meet their (newly discovered) unmet needs. We’re always trying to make this process more valuable to the client, so after each project we brainstorm ways (internally) to improve for the next time.
One area that we became aware of in this discussion is that we have been very focused on showing our clients all the work that we’ve done. It’s not uncommon for us to agree (contractually) to study fifteen people, but actually interview more. Since we’ve gone above and beyond what was expected, we’ve always been determined to make that known… After all, giving the client more than what they expected is a great thing, right? As we discussed this, we came to the realization that highlighting the amount of work that we did can actually dilute the message we’re trying to promote. It’s not that doing extra work is wrong, but the focus has to remain on highlighting the benefit of our learning to our client. Looking at websites of other professional service firms shows me that we’re not alone. Everyone wants to share their process and convince you how hard they will work on your behalf.
Isn’t that really the struggle for all companies? Putting the consumer benefits on a product package does not give ample credit to the marketing and engineering folks that spent countless hours developing specific features. Our pride gets in the way. ”If we don’t tell them what we’ve done, how will they ever know?” Of course the consumer sees this at retail, gets quickly overwhelmed and wonders, “Why do I need this”? To be really successful, we need to put our pride aside, and focus our products on the benefits that are valued and provided. If we do this well, the features (and effort) we provide will not go unnoticed.
Have you ever noticed how different people can see the same thing but take away such different information? An optimist can read a newspaper article and note that while there are difficulties in the current economy, things are going to get much better. His pessimistic counterpart can read the same bit and be convinced that we’re heading for sure doom.
It’s no different in the business world. Three companies can go out and collect the same information via market research. The first company will find that what they currently provide is sufficient for the marketplace. The second will note incremental improvements that could improve business, and the third will realize that if they pursue these findings in a bold new way, they can experience growth in an unprecedented fashion.
What makes these companies so different? It is a combination of attitude and perspective. The first company noted is change averse, so the information they see merely confirms what they already believe to be true. The second company knows at some level that they need to evolve and grow, but past failures (or rumors of past failures) have them in an ultra-conservative place where only the safest of change is acceptable. The third company is destined for growth and change regardless. The information they find provides them with some strategic direction and focus.
Look closely at this picture of Einstein. Now stand up and step back, it becomes a picture of Marilyn Monroe!
Before you spend a lot of time, money and energy on learning more about your consumer or your marketplace, I would challenge you to take a serious, introspective look into what type of organization you really are. If you find yourself in the first category, merely seeing something new won’t inspire you to change what you do. If you’re in the third, developing a deeper understanding of your customer base could provide the critical difference between strategic growth and chaotic change.
The problem with embarking on an innovation project is that you can’t know where it’s going to end up (if you did, it wouldn’t really be innovation, now would it?). Many people (and organizations) have a strong need to be in control of as much of their world as possible. Getting excited about a breakthrough idea that can lead to a very new and different place? Not likely. The further the idea is from “business as usual” the less control they will have. After all, radical ideas might attract new customers, require new forms of distribution, and put the company in a market with currently unknown competitors. Without control, any one of these issues could surely lead to failure… And who wants to sign up for that?
Fear of the unknown is a natural trait. But it is often misplaced. Good innovation stems from seeing an opportunity in the marketplace, or in meeting a need held by a group of consumers. If a concept passes these litmus tests, how unknown is it really? Of course there’s still risk. But the real question is, “What is the risk of doing nothing?”. In this day and age, there are few if any markets that stand still over time. Increasing competition, savvy consumers and disruptive technologies have rocked many an industry. Relying on past success for future success has become an oxymoron.
Sit through any innovation project with most companies and notice what transpires. Ideas may surface that range from mild to wild… But which ones almost always are chosen to move forward? The ones which cause the least amount of stress to the company. The potentially market-changing ideas are often relegated to a three-ring binder until such time that a competitor enters the market in a bold way, then the binder will be dusted off to see if there are any ideas in-house that could compete.
Max DePree, former CEO of Steelcase once said “We cannot become what we need to be by remaining what we are”. In this one simple quote, he says a lot. He recognizes that there is a tremendous desire within any organization to “remain what we are”. But the reality is, that should be where the fear enters in. Companies realistically have to focus on one part of this or the other, they can’t do both. So what is it with your company? Is your attention on determining what you need to be? Or are your resources dedicated to remaining what you are? Yes, change is scary. But in this day and age, not changing is horrifying.
An innovative idea without a champion behind it is doomed. I wrote in my last post about risk aversion tendencies of middle management within most organizations. There is an exception to that rule. If an individual in the organization comes up with an idea himself, he might be willing to take some chances to see it through. Call it personal pride, or tenacity… No one wants to see an idea that they think is tremendous die due to bureaucracy or company politics. I know the guy at Delta Faucet that came up with the concept of the Touch Faucet. He recognized that consumers need to be able to turn water on and off at the kitchen sink when their hands are really dirty (think chicken slime). Some preliminary research showed that when people were doing certain types of food preparation, they would use their elbows or a paper towel to turn the water on/off, to prevent contamination of the faucet handle. Obviously, this led to some very awkward movement. So he developed a means of simply tapping the faucet with your wrist or forearm, and have the water turn on, allowing you to wash your hands without worry of spreading bacteria. Even upon first hearing this, it sounds like a fantastic idea, doesn’t it?
But like most companies, Delta Faucet has a lengthy process to get new product concepts into the marketplace. Along the way there are many points where various experts weigh in with their individual opinions. Many concerns were raised… “You can’t mix electricity with a faucet!”, and “This will be way to complex of an install for anyone to be interested in”, and finally (my favorite), “That will be at a price-point beyond what consumers will pay”. As he tells the story, this project was “killed” three different times during the course of its development. However, he was not willing to let a good idea die. Every time the project was killed, he would personally resurrect it and through dogged determination pushed onward. Fast forward a couple of years and the product is on the market, and exceeding all sales expectations by several hundred percent. Champions don’t let projects die.
Unfortunately, the case above is far too rare. Most companies shoot down ideas like the Dilbert cartoon above. My friend took a risk on this project. Had it gone to market and not been successful, he could have lost his job. Fortunately in this case, we’ll never know. But the real question is this. Does your company support and enable product champions? It’s never a job title, it’s a passion. Are people encouraged to take risks? What is the upside and the downside for them as individuals? No one is suggesting that you bring every wacky idea to market, but do you have an infrastructure where top ideas can have an owner? I’ve even seen situations where concepts of open innovation have been applied, and the true champion is not even an employee – he’s an outside contractor managing a project to fruition. However you get there, know this. No breakthrough product will ever see the market without a champion. Do you have yours?
Who’s in charge of innovation at your company? The odds are, a group of people that fight it every step of the way. Think about it… Top executives at any company are charged with creating the Vision and direction for the organization. They essentially blaze the trail for the organization to follow in the coming months and years. But realistically, that trait cannot cascade down through the whole organization or nothing would ever be implemented. Therefore, organizations have management tiers that are charged with execution of the plan. These people are expected to be much more tactical in nature. For the most part, that’s a good system. Create the Vision at the top, and staff the organization to implement it.
But where does Innovation fall? Most CEO’s will state that they want their company to be innovative. That makes sense from a strategic and directional standpoint, but how does middle management implement said innovation? While innovation may start as a strategy, it ultimately has to come to life in the form of new product or service ideas. Those specific ideas may be the result of an innovation project. And clearly once the word project is thrown about, it clearly resides in the realm of middle management, not executive management. That’s where things fall apart.
Tactical project leaders have been trained to minimize risk. People in these positions have been rewarded and promoted for “keeping their heads down” and delivering what’s been asked of them on a consistent basis – a model of self-preservation. An innovation project could have incredibly high-potential ideas come out of it, but what happens next? The odds are the concepts getting the most attention at this level will not be those that have the highest potential impact on the company but rather the simplest to implement and carry with them the lowest chance of failure. Realistically, what tangible incentive does a manager have to pursue an idea that could transform the company? They’d clearly be putting themselves (and their team) at considerable risk. There’s probably no stated reward for success, but they certainly remember the last guy that screwed up a project – who by the way is no longer there…
Because of the project nature of this process, CEOs typically think this beneath them; a level of detail that they need not be involved with. As a result, they never see some of the top (potential) ideas that are generated. Safe ideas are pursued with minimal impact on the market. Executives get discouraged with the process. Other strategies take the place of innovation. Is it any wonder that there’s so much talk about innovation, and so few truly innovative products delivered?
I considered myself a pretty social kid. I loved to hang out with my friends and would do so at every opportunity possible. If we had an issue that needed to be discussed, we would do so face to face. We’d use the (land-line) phone to arrange our outings, but the joy was in being face to face.
I remember working with a corporate product team about ten years ago. Most of the members of that group were in their mid-twenties at the time. We had an evening at a resort hotel (where our meeting was being held) and we were all sitting around a table by the pool enjoying drinks and recapping the day. But I distinctly remember being continually interrupted by the ringing of cell phones. And, every time one would ring, the person would answer it. It didn’t matter if we were in mid-conversation, suddenly the person on the other end of the phone was more important than the group that was gathered there first hand. It’s not as if these were emergency calls, they were just “other friends” that suddenly rose to the top of the priority list.
Today that has become less of a problem. Because I’m not sure young people even talk anymore. Texting has completely overtaken the culture. According to a recent
Reuters news report, one-third of US teens that have a phone text 100 times per day! The article goes on to say “Text messaging has become so much a part of teenagers’ lives that 87 percent of those who text said that they sleep with, or next to, their phone.” Try having a conversation with any teen and see if you can get through it without them sending or receiving texts to a third party. It’s highly unlikely.
I’m honestly not sure if this is a natural migration of technology, or the result of cell phone pricing plans (where talking minutes have been more expensive than unlimited text plans). But regardless of the cause, I wonder where this will take us as a society. Face to face communication involves things like verbal and non-verbal communication. You can tell by someone’s tone if they are being serious or sarcastic. The tempo of their words can depict their urgency. A pause in a conversation conveys thoughtfulness. None of these can easily be picked up when texting. Through my sons (in their early 20′s), I have seen several cases of misunderstandings via texting that have led to hard feelings, needless arguments and sudden anger. I have a friend that is a High School English teacher that complains that students have a hard time writing in full sentences anymore. And punctuation? Forget about it.
At my company, we observe people to discover needs and develop products to satisfy those needs. I can’t help but think if we were to do a study on texting, we would recommend a multi-phase approach. What if people could actually “talk” to one another instead of just reading fragmented sentence bursts? And as a longer term approach, what if they could actually spend time together and “converse” with one another to really gain knowledge and understanding…
I just have to wonder. Is this a situation where the technology pendulum has just swung too far?
It’s often been said that innovation is not about invention, but rather the reapplication of a given “technology” from one realm to another. I have just completed a two night stay at a hotel in Portland, Oregon that absolutely meets that criteria of innovation. The Kennedy School is a property owned by McMenamins, a group that owns a group of historic hotels, brewpubs, restaurants, music venues and movie theaters. This particular hotel was once an elementary school . It has now been converted into a very unique “themed” hotel. I spent the last two nights in Miss Dobie’s Room, named after the teacher that taught in here back in the 1920′s. Two of my walls are covered with chalkboards (with chalk included so I can contribute my own bizarre ramblings to those left here from previous guests). Outside my room is a soaking pool, a heated saltwater pool only 3′ deep, but with benches around it’s walls. The old school auditorium is now a movie theater, filled with couches and including waitress service. The Boiler Room is now a bar traversing from the main floor down a couple of flights to where the original boiler stood. In addition to all the above, they have a micro-brewery here that makes some spectacular ales that are distributed around the country. Other old school rooms have been repurposed into very intimate bars seating only 10-12 people. I enjoyed spending a little time in Detention, now a cigar bar complete with a wood-burning, pot-belly stove.
This is not your tacky themed hotel. It is a wonderful re-purposing of a historic building. I’ve noticed that the surrounding community is utilizing this space as much as the overnight guests. How many other hotels can say that? If you’re ever in Portland, I strongly recommend breaking out of the chain hotel rut, and trying out this location. There are several others in town too, including a converted mental hospital, and a newly acquired prison. I guess here, you can spend the night in a jail cell and still go back to work the next morning! It is exciting to see a hotel willing to break so many conventions (there’s no tv in my room), and apply desired features in a bold new way. That’s innovation.
My eight year old son was in Sunday School last weekend. The teacher was teaching a lesson on patience. At one point during the lesson, the teacher talked about a situation where the Israelites were frustrated and began to whine. The teacher looked at the class and asked the kids “Do any of you ever whine?” My son immediately shot up his hand and announced to the class “I never whine, but my parents do… And sometimes they run out and have to run to the store to get more!”
Funny story as it is, but it did get me thinking… How often do we think we are clearly communicating something that is actually received very differently than it was intended? This can be true in a marriage, in an office setting or in any other social situation. It’s easy to assume that written communication would be exempt from these types of misunderstandings, but there are internet sites filled with funny examples of typos that portray a very different message than what was meant. But typos aside, how many times do we clutter our communication with “insider knowledge” that our target audience doesn’t understand? We create websites and wonder why people don’t call us. We pass out marketing brochures that get no response. Granted, there is a key design element at play here, but beyond that what are we really communicating? Are we speaking in terms that are readily understood or are we including jargon that puts potential customers off because they’re not sure what we’re offering?
The Sunday School teacher knew exactly what he was asking. And my son knew exactly what he was answering. However, they were clearly on two different pages. It’s critical for our success that we make sure we’re communicating in a way that won’t readily be misunderstood. Unless we’re looking for humorous stories as opposed to new business.