Thursday, 26 May 2011

Viagra for Innovation

Why stimulants are the answer for most of us

Last week I was in a giant tent in the grounds of London Business School to hear various CEO’s (amongst others - WPP’s Sir Martin Sorrell, Lloyds’ Antonio Horta-Osorio, 3M’s George Buckley) on the subject of innovation.  The unseasonal high winds meant that at some points the flapping of the tent added a sense of danger and was so loud you couldn’t hear the speakers.  But when I could I was struck by George Buckley describing how naturally innovation came to 3M. 

Most of our clients at ?What If! struggle to make innovation part of their day to day activities, for reasons we’re all too familiar with.  We’re also all familiar with 3M’s 15% ‘playtime’ (it’s actually closer to 5% as not everyone participates all the time) but what I hadn’t twigged was the power of innovation ‘confidence’.  The picture Buckley painted was of an organisation with innovation as part of it’s DNA.  An organisation where innovation, it’s boosters, blockers and rewards are out in the open.  No need to learn new skills each time they need to innovate because it’s a frequent activity that you get used to; ‘innovation is like going to the dentist, you get used to feeling the pain’.  As Buckley says innovation boils down to clear strategic direction, hiring optimistic people and allowing them freedom and choice so that ‘as a junior researcher I can have my hands on the company tiller – even if a little’. 

Later and in contrast another speaker, Nick Hughes, previously with Vodafone and developer of the Kenyan mobile money platform M-Pesa told us that he could only get traction on the idea after attracting £1m of external financing. This funded a prototype which enabled the project to move through the system. 

I suspect there are two sorts of large companies in the world; First there are a very limited number (4 or 5; maybe 3M, Google, IBM, Apple…..) with innovation DNA who have the ability to reproduce in different forms naturally and secondly, all other companies.  These are the leviathans for whom innovation is an alien activity. They require a dose of corporate Viagra to get them going.  An injection of something different – a cocktail of freshness and bravery from outside their organisation.

So there’s a new way of looking at innovation – if your organization doesn’t do it naturally then what’s your ‘stimulus’.  You never know it might be fun!

Tuesday, 24 May 2011

I’ve started – so I’ll finish!

Innovation is hard because it involves self destruction

I heard this story from my colleague Maddi Riddell. It’s about an innovation idea that ‘got away’.   In 2004 we ran a project with Heinz in the UK to look for new opportunities in ‘convenience food’. We put our ideas into quantitative testing, including one that was slightly off brief – Beans on Tap – a wide mouth bottle of beans designed to be kept in the fridge and capitalise on the ‘fridge hanging’ snack habit which canned beans hidden in the kitchen cupboard miss out on. I’m afraid our other ‘on brief’ convenience food ideas didn’t pull up any trees but Beans on Tap’s quant scores were ‘through the roof’.  However, the brand team had just committed to the trade on their launch for that year and ‘Beans on Tap’ was put to one side.  Ultimately the launch didn’t work out and now seven years later we’re so excited the new ‘Fridge Pack’ has hit the shelves. We think it looks terrific and hope it’s doing well for them.  Clearly we think it’s a great idea!

This story reflects the a painful truth about innovation; to do new things we almost always have to stop doing the comfortable things we’re doing now – despite the fact that we have invested in specialist people, production facilities and know how.  Innovation is easy for a start up – they have nothing to destroy but for an incumbent with established brands and chains of supply innovation needs generous and expansive thinking.  Ultimately strong and persuasive leadership is needed to jolt force an organisation out of its river of thinking.  Maybe this should be the innovators mantra:  If its comfortable it’s probably wrong.

                              2004                                                    2011

Monday, 23 May 2011

Fail fast, errr, how exactly does that work?

A practical tool that makes learning from failure a reality

'Fail Fast'.  If it's not number one in the league of annoying innovation motherhood statements it’s certainly top five.  Ok, yes we get the 'fail fast' principle but does it work?  Has any business leader actually ever told their people to fail fast.  I'm imagining a lot of blank faces when being exhorted to 'screw it up and be happy'.  Is Fail Fast a myth?  

If you're interested in innovation this is an inescapable topic.  And rightly so.  Harvard Business Review dedicated a whole issue to 'failure' recently (HBR April 2011).  There's a tremendous article about the demise of Blockbuster and written from several of the key player's perspectives.

But I have to admit I'm such a failure I'm still working my way through 140 pages of failure analysis.  So here's my greatest ever failure story, so great its really a success story masquerading as a failure story.  It's short too:

My great buddy Eric Peacock told me about the time he was Investor, Chair and Chief Executive of BabygroThey are the people who make that cuddly product all us parents of grown up kids remember wistfully.  I too have now forgotten the dreadful smells and sleep stealing brand associations..... Back to the story:  Eric bought into the concept of learning from failure as part of the innovation process but wanted to structure it into business operations.  Cleverly he invented the Learning Account, a line on a spreadsheet that totaled 'wasted' expenditure and itemised the learning from each failed investment.  Eric tells me that recasting losses as learning’s and taking the trouble to articulate each meant his teams dug deep into what really was the learning, could it have been foreseen, should they feel good about it or bad about it?  And just as management accounts were scrutinised by investors and company leaders so was the Learning Account.  Not many organisations debate  how much to invest in learning through failure, that's because they don't measure it, they haven't got a Learning Account.

Saturday, 14 May 2011

Conviction Thinking..

Innovation needs table-thumping levels of conviction

In the UK we have a fast growing men’s shaving brand called King of Shaves – it’s got big ambitions.  Will King, CEO and founder has just done a deal with Remmington which will see his the King of Shaves razors and shaving products roll out across the US.  Now, my job title at ?What If! is Chairman and Chief Enthusiast so I was really looking forward to meet someone who is a self proclaimed evangelist for his brand and it’s benefits of a great shave at a great price.  Could Will out enthuse me?  Could I out evangelise him? 

We happily gassed on for an hour about how we were going to revolutionize our respective markets.  We threw out statements about how the world would look in 5 years, 10 years, 20 years…  in so far as we could in a trendy London members club we thumped the table about what the future would look like.  Great fun.  It was only after spending the rest of the day with an enormous packaged goods company that I realized meeting Will wasn’t just fun.  Company leaders need to be able to see around corners, they need to be able to thump the table and say “this is how it’s going to be and that’s where were heading”.  I’m going to call this conviction leadership and what I’ve noticed is it’s value in innovation (pretty obvious) but importantly how the innovation debate reveals just how convicted leaders are.  The trouble with innovation is that you can’t really use traditional business skills to paint the exciting future picture, you need belief for that.  And belief, or conviction comes and that comes from getting out of your office and getting dosed up on your particular cocktail of inspiration. 

Will King will is and will be King of Shaves because he has conviction, I’m sure it hasn’t come from market research.  One factor might be that the media are interested in his story as are private equity houses.  This means that Will, unlike many brand owners is constantly telling and re-telling his story, and it’s not a story about the past – it’s about the future, what King Of Shaves is going to do to the market.  There’s something potentially huge in this for large multinationals that are mentally wired into ‘insight – benefit’ thinking.  This can become  rear view mirror thinking, the ‘future’ or ‘see round corner visioning’ muscles just don’t get a work out.  This is a challenge many of us know well, the issue is that classically trained marketers (I put my hand up here) just don’t get how fashion is made.  Who you know and who they know is the new marketing battleground.  You can't play at this 'new marketing' without bags of table-thumpingness.  So if you need to see round corners, if you're in the market for a big new revenue stream then why not plot how you're going to get conviction first?

Thursday, 12 May 2011

Populising Innovation...

How B&Q's CEO made innovation a crusading total company activity

I recently met with Ian Cheshire, CEO of Kingfisher.  Now divested of electrical retailers Comet and Darty the group is free to focus on the home improvement market with DIY stores (B&Q and Castorama) in UK, France and fast growing markets of Poland, Turkey, Russia and China.  Kingfisher is a £10bn, 65,000 person powerhouse.  Since taking over the reigns Ian has transformed the group from supertanker to speedboat.

I wanted to chew the innovation cud with Ian; what’s driving innovation in global retailing today?  Here are five innovation gems from our conversation. 

1.  Innovate around one big customer focused idea: The key is not to overcomplicate innovation, not to put it on a pedestal as a complex management science.  Selling 45,000 products in more than a thousand ‘big barn’ stores could be a recipe for innovation chaos.  Without a central organizing idea to help busy execs say yes or no to new ideas innovation could splinter out of control.  So at Kingfisher innovation is dedicated to ‘making life easier’ for their customers’ DIY challenges.  For example wallpaper paste you apply to the wall and not the paper.  Doh!  What a simple but great idea.  (BTW I am scarred by memories of my mother wallpapering our house in the 1970 when I was young, is this just me?).  ‘Making life easier’ is a single lens that cleverly combines the brand promise with an innovation standard and it’s easy for staff and customers to understand.  So much so that Ian and his team have been able to explain their innovation 'lens' to both these groups so that now staff and customers bring more ideas than they can cope with – and most are strategically bang on target.  The key is to be able to communicate a simple and wholesome purpose behind innovation.

2.  Make the reason to innovate clear: Within the organization Ian has found a way to conceptualize the ‘business reason for innovation’.   This is often misunderstood in business, we take it as granted that innovation is a good thing, a legitimate business activity.   That is until we gulp down our coffee as we figure out the real opportunity cost of a serious innovation investment program.  Having a top team align around the need and the role for innovation is critical and Kingfisher have realized this.  Ian coined the concept of ‘unlocking the latent spending power’ of Kingfishers customers.  This is the money we all have but don’t spend because frankly we don’t see the need.  It’s a concept that’s easy to grasp – I can visualize all those notes in customers wallets right now – the ones that don’t come out and get spent in someone else’s store.  They are real and they exist, in the flat economies of Western Europe unlocking them is the only way to grow.  Turning decking into low cost fencing, developing fence sprays rather than paints, classes that encourage customers to ‘pimp my shed’ and loos that incorporate hand basins for mini flats - these are all innovations that have been driven by the simple belief that there’s more market to go for, its fun to unlock spending power and shameful if you don’t.   Ian called this ‘provoking the future’. 

3.  Fast Iteration:  Ian has a great story about how innovation only works if you can be super flexible, almost throw away in your development.  He pulled Screwfix products into B&Q and called it Tradepoint, professional decorators and builders kept asking if things were in stock so he removed the walls around the stock area.  Sales shot up as builders reported confidence with the scale of the operation.  This is ‘fast iteration’ par excellence.   Ian neatly describes this as "the key to innovation is 'landing at speed'".

4.  Innovation for all:  Innovation isn’t just for the marketing or sales team, Ian spoke proudly of his team of legal and procurement team that have worked with a Mid East tile manufacturer who has developed an amazing printing process.  Kingfisher have first bite on all this guy’s innovation.  He says that with innovative suppliers he's worked hard to 'plug n the fire hose of commercialisation'.   Makes me think of how P&G pitch their supplier led innovation story and the same with Cisco’s 'acquirer of choice' strategy.

5.  As CEO - show you care about innovation:  Finally my favourite story:  Ian is keen to emphasis how critical that he and the Exco are seen to be interested in their products not their strategy.  He saw the Cool Wall on the UK’s irreverent car show Top Gear and stole the idea for his best selling products.  He put the Cool Wall outside his office and soon suppliers were fighting to have their product on it.  Simple, easy, visual and cheap.  

Five great innovation gems and as with all great innovation stories they make perfect sense to the onlooker and the historian.  But making things this plain-speakingly simple and this let-me-have-a-go popular in a hugely complex environment is a real skill.  I am sure Ian would want me to point out that his team and especially Group Innovation Director Andy Wiggins have worked hard to make all this happen as well.