As many of you, my loyal readers know I write occasionally about innovation as a marketing growth strategy. It’s an important subject because finding growth through innovation is one of the most reliable strategies a business can use to prosper.

OK, if it’s so important, the question becomes, “Where can I find it?” Well, not here.(...)
Read the rest of Innovation, Where Can I Find it? (190 words)

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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?

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.

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© James for Hipkin's Hip Shots, 2009. | Permalink | One comment | Add to del.icio.us
Post tags: Business Strategy, Creativity, Customer Experience, Customers, Innovation

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In most organizations business innovation is seen as “risky” behavior. For example, I’m on the Advisory Board of MaxPoint Interactive, an online advertising start-up. They developed a geo targeting technology for banner ads that’s 2.5 times more granular than residential zip code. The results Early Adopters have seen are nothing short of spectacular. I’m using my network to open some doors for them. Talk about pushing Jello up a hill on a warm day. Innovation is hard.

You would think that advertisers and their agencies would be all over something, with proven results, that eliminates most of the wasted impressions currently accepted as a matter of course for online banner campaigns. Nope.

This isn’t the first time I’ve experienced this phenomenon. In the late 90s I was involved with an internet enabled advertising channel that delivered ads and content to large plasma screens in high-end bars and night clubs. A great way to get a message to a very attractive target who are light media users. More Jello.

I did some consulting for a Silicon Valley start up that had a radical new way to get consumer research feedback. The academics loved it. Early adopter results were excellent. The marketing industry? Not so much.

I’m not bitter about this. I’ve been involved in innovation my whole career. That crossing the chasm is difficult is no surprise to me. So what can a company do? Well, I have observed something that business leaders should pay attention to:

“The hardest part is starting.”

The reason getting traction for a new idea, that crossing the chasm is so hard usually has little to do with the quality of the idea and everything to do with how “risk” is perceived within an organization. Introducing new ideas into organizations, where taking risks isn’t an accepted part of the culture, is very, very difficult. People’s and organizations’ resistance to change gets in the way. They’re afraid to start.

So, if you want more business innovation, start something new today.

Hip Shots

• If business innovation is important to your competitive advantage, and it is, then start things. Have each member of the leadership team start something new every quarter. Make starting new ventures, processes and ideas a factor in performance reviews and bonuses.
• Senior management should visibly sponsor new initiatives. When the rank and file employees see that the “boss” is willing to try new things, that the boss has a business innovation mind set and is willing to put their name and reputation on the effort, they are much more likely to bring forth ideas and try new things themselves.
• Senior leadership should be equally public when new ideas don’t pan out. Great ideas don’t come from being safe. Stuff isn’t going to work. By being visible, by taking ownership of failures as well as successes, leadership is telling employees that taking reasonable risks is important to the company’s future success.
• Harness the insights and intelligence of employees. They are in a unique position to find and foster innovation. They are close to the guts of your business. They are also close to your customers. Bring them into the discussion. Listen carefully to what they have to say. Give them permission to contribute, to be innovative.
• Bring customers into the discussion as well. Engage with your best customers. Dig under the surface. Probe heavy category users. Find out what they need and want. Find out what they would like you to start doing or providing.

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© James for Hipkin's Hip Shots, 2009. | Permalink | 2 comments | Add to del.icio.us
Post tags: Best Customers, Business Strategy, Growth, Heavy Users, Innovation

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