To Find Innovation – Keep Asking “Why?”

by James on December 2, 2009

Finding business innovation ideas isn’t difficult but it can be hard to do. The answers are there if you are willing to work for them. Usually the front-line staff know. The customers definitely know. Business innovation is all around if you are willing and know how to dig for it.

An example. When I started in this crazy business, entry level staff received a lot of training. (I appreciate that this is a radical concept these days but bear with me.) I worked on the Energizer Battery business. My office had every wall covered with AC Nielsen reports and U&A Studies. My boss spent weeks teaching my how to read and interpret the reports and in the process he taught my a great deal about business, about how to communicate data, and how to write a memo. But, I digress.

As I plowed through the mountains of data I noticed there was a huge variance between what the reports predicted battery sales should be and what they actually were, and the variance was getting larger. I asked my boss about it. He said not to worry, it was research error. But it kept bugging me. I asked my client and he said the same thing as my boss, research error, don’t worry about it.

Well I kept asking myself why the variance was so significant and why it was getting larger over recent months. I didn’t know it at the time but I was on the path to discovering what would be a significant business innovation for my client.

Some historical context. This was happening in the early 1980s. (Yes I know, I’m really old.) Sony had just introduced the Walkman and Ghetto Blasters (not a PC term today I suspect but that’s what they were called back then) were all the rage.

I went back to the reports. The U&A research was executed among adults. The AC Nielsen reports measured the Grocery and Health & Beauty (Drugstores) distribution channels. Convenience Store volume wasn’t being measured but the sales force was making its numbers selling to this channel.


Why indeed.

So I called my client and suggested we go for lunch. When I picked him up we took a brief detour and parked outside a school. He mentioned that people get arrested for stalking schoolyards. I assured him we wouldn’t be there that long. Then I asked him a question,

“Do you see where the volume variance is coming from?”

There it was. The answer to the question. Kids were buying batteries. And nobody was selling to them. Business innovation by asking why.

We set up a test in five record stores in Winnipeg, Manitoba. (Some day, when you are looking for a real treat, do store checks in Winnipeg in January.) The inventory turns we saw in the test stores were 10 times what we saw in traditional distribution channels. We took the test data to a national record store chain. They thought it was a great idea and started carrying batteries.

By asking why, by keeping at it we found the answerer, we found the business innovation that was hidden in plane sight. By asking “why” five times we opened up a new distribution channel worth millions of dollars.

Hip Shots

  • Look for the white space, for the aspects of your business that don’t have a logical explanation. Dig into why this is the way it is.
  • Look for the small things that are changing inexplicably. Ask about changes in sales patterns. Don’t just read reports, ask the sales staff, ask your factory manager, ask customer service. Find out what they are seeing that’s new and ask yourself why this is happening.
  • Pay attention to what your customers are doing, and not doing, and ask yourself why this is the way it is. Get out of the office. Hang out in schoolyards. Innovation is in the cracks.

{ 1 comment… read it below or add one }

Niall Harbison December 29, 2009 at 2:27 pm

Thats is why I love working in start ups and small companies where you have the ability to just drop everything and just innovate on the spot. I have never worked in big companies but I can only imagine the process that would be involved in trying to get some innovation going! The 80/20 rule at Google seems to work well. The companies that continue to have a culture of innovation long term will be the companies that win :)

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