Category: Innovation

What Does It Mean to Innovate with Discipline?

Photo by Phillie Casablanca/Flickr
(under Creative Commons License)

I came across a very interesting post on the Reveries blog this week about how Lego let innovation both drive the company and almost drive it into the ground. The post was discussing a review of a book about Lego, Brick by Brick, that chronicles how the company embraced theories of innovation with disastrous results. Lego rebounded by realizing that the growth mantra espoused in B-schools and corporate board rooms is not the only way to go. A return to a focus on committed customers and not chasing trends in the toy market brought Lego back from the brink of bankruptcy. The Lego story has a happy ending, but this mega-brand had lost its way at one point.

What Went Wrong?
The forces that contributed to Lego’s troubles are not surprising. Technology developments changed the toy industry as well as how young people engage in play. So, it was reasonable to think a firm would adapt to changes in the external marketing environment. If toys were going high tech, shouldn’t Lego be developing more technology-intensive toys? The video game generation is highly stimulated and has a short attention span, so developing more pre-constructed toys would address the potential threat of being irrelevant to young people who did not want to spend hours on a building project. Lego was wrong on both counts. The company was characterized as “innovating without discipline.” Generally, innovation is looked at favorably, an essential endeavor to fuel growth. But, it went horribly wrong for Lego.

The Alternative
The Lego story captured my attention for two reasons. First, it was a reminder that even the most astute companies can get it wrong when it comes to pursuing growth. Being wrong is a forgivable sin as long as you learn from it. Lego learned its lesson well. Second, conventional wisdom is not necessarily the strategy of choice. Disciplined innovation for Lego is adding new value to its passionate brand community made up of Lego lovers of all ages. One of the missteps Lego made was to follow the toy industry definition of the target market: Young males.

Innovate on your terms, not the industry norms. Lego regained its focus and brought new products to market that appealed to its customer base rather than continuing to chase prospective customers with products that did not always deliver against the Lego brand promise. While the external environment should not be ignored, keep your customers and brand advocates at the center of all innovation decisions.

The Side Benefits of Crowdsourcing

Crowdsourcing has become a popular business practice. The ease of connecting with people via social media enables an organization to turn to its tribe of followers for solutions or inspiration. New product ideas, customer service issues, and marketing input are three examples of how marketers use crowdsourcing to tap the wisdom of the crowds. One of the most effective crowdsourcing campaigns in recent years has been Doritos’ Crash the Super Bowl contest. For the past seven years, Frito-Lay has challenged the public to submit Doritos commercials to air during the Super Bowl. Five finalists are picked, giving the winners (often upstart ad agencies) tremendous exposure and modest financial rewards. The payoff for Doritos has been successful commercials, in part because they are vetted by the public via a fan vote for the contest prior to the Super Bowl.
A Maverick Idea for Crowdsourcing
The latest example of using crowdsourcing to meet a marketing need comes from the NBA’s Dallas Mavericks. Owner Mark Cuban, known for being innovative and a maverick in his own right, recently took to his blog to call on fans to help design the team’s next uniform. Specifically, Cuban wants to debut new uniforms for the 2015-2016 season. Between now and May 31, he wants people to post their ideas for the next uniforms on his blog. Here are some details of Cuban’s call for action:
  • All submissions immediately become property of the team
  • A winner may be picked from the submissions
  • Winner will receive $1000 and possibly some free Mavs tickets
  • Of course, the winner receives bragging rights for having his/her design chosen

Is Mark Cuban being a cheapskate for offering a measly $1000 to the winner… and there might not even be a winner? Some people think so, contending that if a professional designer was hired the fee would likely be six figures. But, judging by most comments posted on Cuban’s blog (nearly 900 so far including many contest submissions) many Mavs fans have no problem with the conditions of the contest.

Promotion and Engagement are Side Benefits
The obvious benefit of crowdsourcing is innovation. Ideas for new value are generated, often by the very people who use or are served by the company or product. Generating multiple ideas is good; generating those ideas from users and customers is great. Another benefit can be realized from crowdsourcing as evidenced by the Dallas Mavericks example: Promotion. In this case, there is not much going on with the Dallas Mavericks these days- the team missed the NBA playoffs this season. The uniform design challenge is a way to stir interest in the team during an otherwise quiet time.
More importantly, crowdsourcing provides a platform for engaging customers and other members of a brand community. Asking people for their input gives them a voice, making them feel valued. I read several of the comments to Cuban’s post that contained contest submissions. Many people apologetically began by saying “I am not a good artist but…” yet uploaded their ideas for new uniforms. Many people included the acronym “MFFL” in their posts (“Mavericks Fan for Life”), providing a clear indication of their relationship status with the brand. For this segment of a brand’s community, crowdsourcing is powerful because it makes these people feel like they are part of the organization. Their involvement is sought to innovate on the brand’s behalf.
Cuban concludes his blog post about the contest by saying “let’s see what you got.” I’m with him- I cannot wait to see the quantity and quality of ideas submitted in the coming days. Regardless of whether the eventual next uniform design comes directly from the community submissions or indirectly influence a hired designer’s work, Mark Cuban’s crowdsouring call will likely be deemed a success.

 

Textbook Industry: Game Over or Game On?

Apple made its expected announcement that it is venturing into the textbook market. A combination of factors makes the situation ripe for Apple. First, Apple has demonstrated capability in simplifying the user experience to consume music and entertainment via iPods, iPhones, and iPads. Customer expectations would be that Apple will deliver a similar experience through the planned iBooks 2 platform. Second, customer dissatisfaction abounds in the textbook industry. While iBooks 2 will target K through 12 textbooks it seems inevitable that solutions for the higher education market will follow.

Should the textbook industry be hiding under a rock? Some cynics would say that publishers are already there, and that is why Apple is rising with a challenge. Years of maintaining status quo by publishers along with advances in technology have attracted Apple and other firms to explore how to innovate in the textbook industry. It would be unfair to suggest that traditional publishers have not attempted to innovate in response to changes in technology and students’ book consumption preferences, for they have made strides in responding to students’ needs. But, there is a great deal of work that remains if publishers want to be competitive in an environment in which new entrants are intent on changing how students buy and read textbooks.

Firms have two response options when disruptive innovations make their way into an industry: 1) Game Over or 2) Game On. The Game Over response may not be an immediate surrender. Rather, it can be a gradual decline in a prolonged battle to maintain relevance (see Kodak). In this case, textbook publishers are too heavily invested to cede control to Apple or anyone else. The response has to be Game On.

As a college professor and textbook author, I have great concerns about the costs students must bear to gain access to important learning resources, costs that are in addition to constantly increasing tuition. We cannot price students out of the opportunity to prepare to compete in the job marketplace. The innovation gauntlet has been thrown down for textbook publishers- Game On!

The Legacy

Merriam-Webster defines legacy as “something transmitted by or received from an ancestor or predecessor or from the past.” The passing of Apple co-founder and chairman Steve Jobs raises the inevitable question “What is Steve Jobs’ legacy?” Could it be the numerous products introduced over the years that enhanced productivity and provided entertainment value? The list includes McIntosh, iMac, iBook, iPod, iPhone, and iPad. The ways that we work, play, and communicate have been significantly impacted by the genius of Steve Jobs.

I prefer to view Jobs’ legacy differently. It can be distilled to one word: innovation. Steve Jobs dared to be different, not for the sake of being different but to stretch the limits of what could be accomplished. He once said that it did no good to ask customers what they want because they don’t know what they want. And, they don’t know what they want because they do not realize what is possible- the products that could be developed to add value to their lives. Steve Jobs was a visionary in this area- he had a feel for what was possible, more so than the rest of us.

If we want to honor Steve Jobs’ legacy of innovation, it is not by buying Apple products or stock. Instead, we must keep alive his passion for stretching the limits of the possible. Personally, I have been more focused on innovation in my professional work over the past 5 years than at any point in my career. I attribute this focus to the influence of forward thinkers like Steve Jobs. It is imperative that we encourage innovation in business, education, government, and in our communities. Too often, we are mired in the status quo and fearful of doing something different because it has not been tried before. We need to get past our self-imposed limitations and keep the passion for innovation alive.

Borrowing Brain Power for Innovation

It has been said that innovation is the lifeblood of a business. A company can leverage new products, services, or ideas in order to reach new customers, increase market reach, and grow profits. Appreciating the impact innovation can have on an organization is easy; establishing a culture that values and encourages innovation is often the challenge. Even significant investments in R&D and market research cannot guarantee that innovations will succeed… or if they will even come to fruition. Given the formidable obstacles to innovation, businesses are increasingly willing to use non-traditional methods to develop new ideas.

One approach to innovation that has gained notoriety is crowdsourcing, enlisting a community of customers or other interested persons to hatch ideas that could result in new products. Crowdsourcing has even been used to develop advertising campaigns such as the Doritos commercials that appeared during this year’s Super Bowl. The use of crowdsourcing reminds me of a quote by Woodrow Wilson who said, “I not only use all the brains that I have, but all that I can borrow.” Why not tap into the insight, inspiration, and expertise of other people to develop new ideas?

A recent crowdsourcing project intended to identify innovation opportunities was conducted by Starbucks. Its Betacup Challenge sought ideas to reduce the environmental impact of Starbucks’ iconic to-go cups. Entries vied for a piece of the $20,000 prize money Starbucks offered. The result was 430 ideas submitted online that generated more than 5,000 ratings and 13,000 comments from website visitors. While many ideas dealt with design changes for disposable cups, the grand prize winner had an idea that did not involve disposable cups at all. The winning idea focused on a rewards-based program for customers with reusable cups.

Crowdsourcing product innovation may not be a replacement for product managers, R&D departments, and market research, but it certainly brings a fresh perspective to the ideation process. Growth in any organization can be stymied by myopic thinking that comes from personnel being too close to issues and too familiar with “what can’t be done.” Starbucks did the right thing by pitching this innovation question to a broad community. Will the ideas generated in the Betacup Challenge ever be implemented? That answer is yet to be determined. More importantly, the quantity (and probably quality) of ideas from which Starbucks can pursue innovations are greater because it acknowledged it does not have all of the answers when it comes to reducing the company’s environmental impact.

Fast Company – “Winner of Starbucks’ Coffee Cup Challenge Isn’t a Coffee Cup”