Since normal companies tend to be dissatisfied with their levels of innovation, it might be time to take a slightly more abnormal approach, argues James Hurman.
If you’re feeling awkward about how well your company innovates, you’re among friends. Almost no companies are happy with their innovation efforts to date.
A recent McKinsey study showed that while 84 percent of global executives believe innovation is extremely important to their growth, 94 percent are unsatisfied with their innovation performance.
Why do they believe innovation is extremely important to their growth? Whether or not they’ve studied the numbers, they’re right. Innovative organisations grow faster. A fascinating 2013 study by US innovation consultancy Co:Collective showed that between 2007 and 2011, innovative companies grew revenue 60 percent faster, grew profit 120 percent faster and grew their company’s value 200 percent more than average companies. And a PwC study, also from last year, predicts that over the next five years the most innovative companies will grow at three times the rate of the least innovative. The most innovative companies spend a third as much on paid media and get 15 times the amount of social media attention as the average. From a marketing point of view, the ROI that innovative brands command is stratospherically higher.
The executives in McKinsey’s study understand that innovation is important. Then why haven’t they been innovating well? Why have they ended up unsatisfied with their innovation performance? Let’s remember, they’re normal to be unsatisfied. It’s remarkably abnormal to be innovating satisfactorily. And if they’re unsatisfied, then it’s probably because they’ve been going about innovation the normal way.
The normal way is time-honoured and as un-scary as normal things tend to be. You match or build on competitor offerings. You tweak and update existing product lines. You do ‘R&D’ and commercialise things you can make. You import successful products from other markets. Sound familiar? Yes, that’s normal.
Almost all companies do these normal things. And almost all companies end up feeling unsatisfied with their innovation efforts. So perhaps it’s time to look at the abnormal. Abnormal companies feel satisfied with their innovation efforts. And abnormal companies do innovation in abnormal ways.
Take the French supermarket Intermarché. They had a gloriously abnormal idea this year. 300 million tonnes of ugly-looking fruit and vegetables are thrown away each year in France because they don’t conform to the standards of perfection that supermarkets and consumers demand. Très gaspilleur! But where others saw waste, Intermarche saw opportunity. They took that discardable produce, rebranded it as ‘Les Fruits & Legumes Moches’ (Inglorious Fruits & Vegetables), and sold it at a 30 percent discount. The ‘grotesque apple’, the ‘ridiculous potato’, the ‘hideous orange’ and the ‘unfortunate clementine’ were bought from growers, given their own aisle space, their own labels and even their own ‘inglorious vegetable soups’ and ‘inglorious fruit juices’. Intermarche sold an average of 1.2 tonnes of these doomed foods and increased their store traffic 24 percent. It’s abnormal to ask ‘what goes to waste and how could it be repackaged to provide an additional revenue stream?’. But here at home, Air New Zealand asked that same question and came out with grabaseat, arguably the best digital retail innovation ever in New Zealand.
It’s also abnormal to ask how an existing product could be packaged in a way that opens up a whole new customer segment. That’s the question Australian train operator V-Line asked to come up with a new proposition that won the Grand Prix at the Creative Effectiveness Lions in Cannes this year. Observing that young rural Australians leave for the city and never come back, they set out to help mums and dads in country towns bring their kids back to visit. The ‘Guilt Trip’ was a prepaid ticket back home that parents could send to their kids to encourage them back home. Each ticket came with its own mini campaign guilting their progeny into returning for a visit. “Steven … it’s your Mum, who raised you from birth. If you can find the time to visit, here’s a train ticket back home.” Ticket sales increased 15 percent as V-Line sold an extra 160,000 train rides. An abnormal approach that delivered abnormal results.
It’s normal to have an innovation strategy, a roadmap that’s used internally. It’s abnormal to go out to the market and publicly share your innovation journey. That’s what Marriot Hotels have done for some time now with their ‘Travel Brilliantly’ programme, a co-creation programme where they partner with customers, universities and other brands, putting their ideas and prototypes on display and iterating in front of their customers and competitors. They’ve joined forces with MIT Mobile Experience Lab to turn their Boston hotel into a ‘tech-savvy social hub’. They’ve prototyped an imaginative and dynamic restaurant concept called ‘Goji Kitchen’, which is a pop-up restaurant within a primary restaurant that enables the experience to fundamentally change on an hourly basis to get away from the cookie-cutter feel of hotel dining. And this year they’re launching their first customer co-created innovation: the ‘Healthy Vending Machine’, an idea brought to them by Anjana Kallarackal, a guest who lamented the lack of non-junk food options available on the run.
So often we start out on an innovation journey but never quite reach the end. Putting your innovation ideas, prototypes and ambitions in the public domain means your organisation can’t get out of having to deliver something. It’s normal for the point of no return to be post-business case. It’s abnormal to bring it forward to the start of the journey. And it necessitates follow-through.
It’s normal to focus on the things that customers say they want in focus groups. They want things to be cheaper, smaller, faster, healthier. And what they tell you in focus groups is what they tell all your competitors. So we all end up with the same research and the same ideas. It’s abnormal to go hunting for the pain points that nobody’s addressed before. That’s what Air France did with their recent e-Track innovation. They watched passengers nervously standing at the luggage carousel wondering if their suitcase would appear. Thinking back to that time one time it got sent to Latvia instead of Bali. Contemplating spending the next week on the phone with the airline trying to figure out where in the world it is this time.
It’s an anxiety that’s now easily overcome with technology. e-Track is a small, cheap electronic device that goes in your suitcase and makes it trackable from your smartphone. A simple, obvious idea that no other airline spotted.
It’s normal to view disaster as something that needs to be recovered from. It’s abnormal to view it as a chance to propel you into the lead. The rebuilding and recovery of Christchurch is, in many senses, a painful and expensive process. But in one way it’s a remarkable opportunity. An initiative called ‘Sensing City’ is leading the way internationally in using information to shape how people go about their everyday lives. Nowadays, there are tiny sensors that measure anything from air and water quality to pedestrian and traffic flow. They give us the opportunity to measure virtually everything, very cheaply. And to use that data to diagnose issues and uncover valuable insight into how to improve a city for its people.
The trouble is, you usually need to put the sensors in when you’re building. So most cities have missed the boat. But because so much of it needs rebuilding, Christchurch has the unique ability to integrate sensors comprehensively across the city, as $30 billion of new development goes in across coming years. Christchurch will become the global leader in using sensors, data and the latest technology to improve urban life, a very abnormal case study for the world to watch and learn from.
It’s normal to position our brand using communications. It’s abnormal to ask how we can bring our brand story to life with our new products, rather than advertising. Stolen Rum’s brand is about a modern interpretation of rum, a spirit that’s always been on the wrong side of the law. Rum’s history spans pirates, rum running in the prohibition, naval improprieties. And Stolen is a celebration of those rogues, racketeers and transgressions and all the fond memories that come with them. When they were given the opportunity to create a new product for the US market, they decided on something that would epitomise that brand experience. A spiced rum called ‘Coffee & Cigarettes’. The name evokes Jim Jarmusch’s black and white world of conspiring over the ultimate daytime narcotic combo. It’s Trinidadian Rum infused with Madagascan Vanilla, Moroccan Fenugreek, Colombian Arabica Coffee and American Hardwood smoke. It feels wrong and oh so right all at the same time and communicates what Stolen is about better than any ad ever could.
It’s selling like coffee and cigarettes in Miami, LA and New York and spearheading the global expansion of one of our most promising young local brands. And it’s completely abnormal.
The organisations that feel good about their innovation efforts are the ones that are doing abnormal things in abnormal ways. Normal innovation is fine if what we’re aiming for is the normality of dissatisfaction. But if we want to be one of that six percent of companies that innovate well, we need to start innovating abnormally.
- James Hurman is founder and principal of Previously Unavailable and a shareholder of Stolen Rum. He is currently offering a one-hour presentation aimed at innovation, product, marketing and executive teams called Present Future that covers the latest innovation research and learnings and a series of recent innovation case studies from around the world. [email protected]
- This story originally appeared in NZ Marketing’s September/October innovation special.