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Tag Archives: Innovation Excellence

Anthropology and Innovation

In world-class innovation, our goal is to invent a solution that will create value for customers (external or internal). Most new product development departments share that goal: to create a new product that customers will purchase.

Martin Lindstrom, the #1 branding consultant in the world according to many sources, analyzed American consumers’ preferences for canned pasta sauces and discovered that there is no single pasta sauce that will satisfy all consumers. Instead, he identified three groups of sauce buyers. Each group valued a different quality of the sauce, such as chunkiness or stickiness.

Lindstrom reached his conclusion by combining anthropological research with sophisticated data analysis. The pasta sauce brand that engaged him used his findings to launch new varieties for the three consumer groups. The result was a huge gain in market share and profitability.

Innovators can learn much from Lindstrom. For example:

  • Challenge your own wisdom. Your customers most likely understand your product differently from the way you understand it.
  • Look into your customers’ heads and hearts. Use ethnographic and empathetic research to learn what drives and motivates them.
  • Experiment prolifically and rigorously. Only well-designed, controlled experiments will yield reliable data upon which to base managerial decisions.
  • “The value of innovation is in the insight, not the idea.” I teach this consistently. Those who apply it, benefit consistently.

Lindstrom has documented his work in seven books. I plan to study his techniques, and I recommend that you do the same.

Related reading: A Not So Elementary Exploration of Brand Insight

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Posted by on August 17, 2016 in Uncategorized

 

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How Fast Should You Innovate?

In innovation, faster is almost always better.

Every day of delay represents a lost day of additional earnings. Every day of delay gives competitors the opportunity to gain an advantage. As I posted earlier, the cost of getting things wrong on a new product may be 4% of revenues, but the cost of delaying the launch by six months is estimated at 33%!

Yet, most corporations feel little urgency to innovate. We have seen 9-week innovation projects stretched to 50 weeks, and some managers have let six months go by without contacting us for further assistance on their projects.

Time is a dimension of culture. If we grow up, as Americans do, learning that time is money, we can be fanatical about getting things done in a hurry. If our parents teach us instead that that schedules are flexible even at the last moment, that nothing is urgent, and that relationships count more than results, we often schedule our professional endeavors in the same way.

There is one area in innovation where we need to be willing to wait. That is in the first step, discovery of insights. While we should work quickly, we should not rush to the second step, invention, until we are sure that we have identified the most valuable insights. Too many companies, however, have little patience for primary research, and they want to jump headlong into brainstorming for solutions.

Let’s appraise our own willingness to innovate faster. It may mean reordering our priorities, investing more manpower and money, or even refusing a request to postpone an innovation activity. If we are willing to put innovation first, we are more likely to get the maximum rewards from our innovation efforts.

Related reading: The Rising Need for Innovation Speed

 

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New Areas for Your Innovation Efforts

It’s sad but true that most new products fail to meet their targets. Managed innovation can reduce the failure rate. But even managed innovation cannot guarantee that product and service innovation alone will be sufficient to take your company to its highest level of success.

To get where you want to go, look at non-traditional areas for innovation. One framework we like to help you focus on non-traditional areas is called Doblin’s 10 Areas of the Business. Another is called the Business Model Canvas. Still another, known as 13 Dimensions of Innovation, was featured in a recent blog post.

Take Supply Chain, for instance. This part of a company may not seem particularly sexy, but it holds vast, untapped potential to improve your results. One Delhi-based firm achieved savings of over 1,200 cr. per annum through supply chain innovation alone!

Moreover, if you can innovate in an area such as business processes, channels or partnerships, you have a very good chance of achieving a sustainable competitive advantage over others in your industry. Some new courier companies have achieved limited success on popular routes, but they can’t duplicate the channels and partnerships that firms like DTDC and Blue Dot have developed. Innovation in those areas has given the market leaders considerable protection against would-be competitors.

To innovate in new areas, assign your innovation team to study and experience those areas, to gain deep insights, and to think about innovative solutions to improve results. We look forward to reading about your success.

Related reading: 13 Dimensions of Innovation

 
 

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Who Innovates Better: Start-Ups or Big Business?

Entrepreneurial start-ups have to be innovative. That’s how they survive and grow. But are smaller, newer companies more innovative than their larger, more established cousins? Some may think so, but I disagree. It’s not size nor newness that makes some companies more innovative than others. Here are the factors that I’ve found to be most important.

Factor One: Pressure to Perform

Any new entrant to a market, or any company that wants to introduce a new solution, must differentiate itself from existing players. The company must persuade customers to switch from their current suppliers and solutions. This forces the entrepreneur to innovate effectively. By contrast, larger firms can often coast for years on the strength of their current offerings, their client base and reputation.

Factor Two: Mindset

Large organizations tend to draw individuals who are risk-averse and happy as followers. Entrepreneurs embrace risk and often swim against the current. Therefore, innovators are often attracted more to self-employment rather than to steady employment.

Factor Three: Resources

Here, the advantage lies with large enterprises. Entrepreneurs may get ideas, but corporations have the ability to conduct research, to experiment, to attract top talent, to turn ideas into workable solutions, and to implement or sell innovative solutions.

No matter how large or small your organization, you can put pressure on yourselves to innovate; you can foster an innovative, risk-tolerant environment; and you can apply your resources intelligently to the task of innovation.

Linked Resource: Anthony Ferrier’s white paper compares small and large companies and offers suggestions for fostering innovation.

 
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Posted by on February 15, 2016 in Uncategorized

 

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