Monthly Archives: November 2010

Innovation: It’s the new black

This was a thought from an online group of media and marketing experts who were discussing innovation, its definition, and how to capture it. So, how do you define innovation? The new Tide “On the go” stick? Electric cars? iAds? All of the above? What is the secret sauce to obtaining innovation? I wish I knew. However you define it, I think you will agree that we could all use more of it.

During this conversation, several ideas were offered. The first response I heard that resonated was a bit of the “glass half-empty” perspective. The thinking was that much innovation is just smoke and mirrors. That much of what we are told as both consumers as well as businesses within the industry is just hype intended to lull you into a false sense of a companies mastery and to entice you to buy or follow. That same argument bore the idea that even if that is true, that it is still necessary and worthwhile because at the bare minimum it keeps us on our toes and for some, it keeps them reaching for perhaps truer innovation.

For many that drive to keep reaching is causing real anxiety. The pressure to innovate is at an all-time high brought on partly by the economy, lack of jobs, lack of job security, poor P&L statements as well as the need to impress upon shareholders and consumers alike that the company or entity is still a worthwhile cause.

I was discussing this with a few of the aforementioned colleagues when some began freely admitting that the game of innovation can be played two ways. The first is the  “ play to win” strategy. The second is the “play not to lose” approach. Over the last couple of years, a lot of people have been adopting the latter approach. Sometimes the players themselves do not realize that they have actually chosen that path but instead were just led that way. The question is why and how do they get into that space? Well in truth that is what their employers have been incentivizing them to do. I am not suggesting that the company mantra is “just get by”, it is much more subtle than that. The real drivers are the goals and performance metrics that are the basis for the financial compensation, bonuses, profit sharing, etc. that they receive. Most companies are unwittingly directing their people to deliver the status quo through the establishment of those status quo metrics. This coupled with the obvious fear of losing your job if you stick your neck out too far are pretty compelling motivators to not do more than you must. The funny thing is that of the dozen or so media and marketing executives and professionals that were discussing this, all agreed that if you polled marketing execs, they would all say that they are playing to win. But even amongst our small group, more than one admitted to playing it safe, something they would never speak of in a poll or public place. How to avoid this?

Outside of the compensation and incentive packages the things that we agreed were the biggest killers of innovation are pretty obvious:

  1. Fear. The ultimate idea killer. And without the right incentive, it is rare to find the individual who is so passionate that they step out of the safe zone and do it anyway.
  2. Arrogance. On the flip side when you are the best, at least in your own mind, and have always been at the top, you can lull yourself into a false sense of security pretty quickly. The two examples we discussed were Apple and P&G. Both highly regarded and known for their innovation. Apple of late has continued to innovate but have had a few missteps that could be chalked up to arrogance. (Think app or iAd  development for starters) P&G for the past few years was seemingly in a rut which again could be attributed to their elite status, they however seem to be really emerging again as of late.

What drives those people or cultural changes that spawns innovation?

  1. Passion. At the end of the day, no matter what you are paid or what incentives you are given, you do what you love to do and are most creative when you work in that space, this is not taught, it is there; it is a drive from within. A colleague told me that Bill Gates once said that Steve Jobs had the head of an engineer and the heart of an artist.
  2. Time and practice. For this I am reminded of the latest book by Malcolm Gladwell, Outliers. In it he discusses how people like Wayne Gretsky, Michael Jordan, and even Bill Gates achieved the successes that they have – they practiced more. 10,000 hours at least. Now you don’t do anything that often if you don’t really love it, which ties us back to the first point.
  3. Leadership. Again, pretty obvious, but without a culture of communication, support and a drive to succeed as a team (no “I” in team”) innovation is DOA.
  4. Risk Assessment: A good leader too will know that to get to that one brilliant innovative idea, there will be tens if not hundreds of not such good ones. Supporting this environment and encouraging failure, so to speak, is essential. 3M did this. They have 7 pillars of innovation that are part of their corporate mantra. Here are the first 6.
    1. Commitment to Innovation.  6% of revenue to R&D.  1/5 of this outlay goes to “pursuits with no immediate practicality”
    2. Tolerate mistakes. Corporate culture.keep it alive through oral history
    3. Innovation via broad base of technology.  Apply one to another
    4. Talk, talk, talk. Networking, formal and informal
    5. Quantify efforts.  Which work, which don’t
    6. Research tied to customer.  Spend time with them, learn what adds value

I chatted with Susan Cohen, who is a student getting her PhD on Innovation and Strategy. She had some really powerful thoughts and ideas so I will end with just a few of those.

“There are industry drivers, firm drivers and individual drivers – and of course they are all linked. Industries change over time and as they change, it creates opportunities for innovation at the firm level. As an industry changes – smart firms see the writing on the wall and innovate to the future – scenario innovation.

The hardest thing for many firms is to cannibalize, yet the firms that are willing to cannibalize are consistently better at innovation. Does a firm need to innovate to “win” (or not “lose”)? I would argue no. Imitation can be a great innovation strategy. The biggest advantage of imitation is that your failure rate is lower and many times, imitators improve on the original idea (think Google/Yahoo!) What a firm can’t do though is to rest on its laurels. Inertia is a pretty serious firm killer

As an industry evolves, there is at first an explosion of new firms who enter the new category (.com). Over time, the number of firms declines until it reaches a plateau (.bust). Knowing where your industry/category is in its life cycle can help you form innovation strategies. Innovating in an expanding world requires differentiation, learning what works, and offering lots of products. But when the number of firms in your category is declining you may want to consider how to shift to more mass-market/broader reach products. Along the way, innovation typically shifts to cost and performance advantages. (So stop adding new features if you are here!)

Some quick innovation advice: If you are a small company, form an external innovation board with customers, suppliers, friends or students and academics. New ideas often come from outside the company. Helping each other on a rotational basis can help breed new ideas and expand your horizons. If nothing else it should get you out of a rut. Go to a conference totally outside of your field – again get new ideas flowing.

For brainstorming, follow a framework. My personal favorite is add/subtract/multiply/divide. But there are others. Most innovation is premised on adding new stuff to old stuff (what else can my phone do?!?!)Try looking in other dimensions – what is the minimum viable product you could offer? How would that change your market? Could you combine that market with something else to make something totally different? Multiply: What’s the core of your product? What would happen if your product had 2, 3 or 4 of them (think razor blades)? Divide: What if your product had a fraction of the power? Of the size? You get the idea.

My other favorite innovation strategy is to “follow the customer.” What does the customer do before/after using your product? Can you integrate that into your offering? The CVS minute-clinic is a great example of this.”

Subaru Embraces “Mediocrity”

Advertising Tweaks The Competition, But Will It Resonate?

Subaru has long cultivated its reputation as a brand for nonconformists. Its cars, with their all-wheel-drive systems and boxer engines, have always set the brand outside the technological mainstream, just as its marketing has often spoken to a devoted owner base at the niche level. But its latest campaign, called, “Mediocrity,” stokes the brand’s rebellious image with a scathing and sarcastic criticism of its competition.

The campaign includes TV ads but it’s mostly based around a website http://www.subaru.com/content/static/fightmediocrity/index.html that pretends to introduce the new 2011 Mediocrity, a car so boring that it’s only available in beige. The website may, in fact, set a record for using the most different shades of beige, a perfect complement for the most uninspiring vehicle you have likely ever laid eyes on. But this fake car, the Mediocrity, is actually a thinly disguised, previous-generation Kia Optima. And that’s what makes the whole endeavor interesting, that Subaru is so openly cynical about its competition, and by extension, the state of the midsize sedan market in general.

The website is actually quite funny, with plenty of clever stuff, like a quiz to evaluate whether or not you are right for the car. Questions include: “I think it would be fun to: A. Jump out of an airplane B. Weave a basket or two” and “I would like to be a professional: A. Volcano Diver B. Burlap Sack Manufacturer.” After I completed the quiz, I was told, “Unfortunately, the testing results show that you are not mediocre enough for the 2011 Mediocrity. We suggest the following tips to help take your mediocrity up a notch: Prune a Shrub, Stop Using Exclamation Points, Buy a Rock Tumbler, Detangle a Garden Hose.” Of course all this has to have a payoff for Subaru, which comes in a link back to the Subaru website that’s disguised with this kind of verbiage: “Or click here to drive a car more suited to your lifestyle.” On the Subaru site, there’s a video of the Legacy with the tagline “Fight Mediocrity.” While this is all fun and clever, I have my concerns whether quite a few people are going to get lost before they ever get to the Subaru site itself.

Beyond the website, there are three ads that seem to be in rotation right now. The first is simply called “2011 Subaru Mediocrity”.

The second is called “Designers” and feels like so many other car ads we have seen where the designers pontificate on their brilliance, but this one does it in reverse.

The last is called “Spokesman”. Again, another tried and true auto ad tactic done in jest.

The campaign is really anti-auto industry insofar as Subaru is poking fun at the hype that is typically associated with auto launches. You know what I mean, the ads where the announcer brags about the latest amazing innovation or styling element. (The premise is not entirely new, as you may recall Nissan Altima’s “The Cure for the Common Car” campaign.

But any anti-establishment concept like this is also wrought with obvious risk.

First, I have had more than one person ask me if the Mediocrity vehicle was a real car. Now I have to think that most would see the obvious parody, but one can never make too many assumptions when it comes to what people might believe. (Look at the world of politics if you don’t believe me.) Next is that people might be turned off by the parody itself and feel as though it is insulting. Then there are others who might actually believe that Subaru does not care or is not taking the business of making cars seriously.

Then there is the issue that while it may be fine to poke fun at the big boys — in this case taking aim at Toyota or Ford — it is not very credible when you are not next in line for the sale.

Subaru’s sales have actually done quite well over the past three years with 2009 being their best ever at 216,652 vehicles sold, which was a 15 percent increase over 2008. This year Subaru’s sales increases on a percentage basis are among the strongest in the business. Yet Subaru still barely scratches the top 10 automotive companies. In a market where there are dozens of new car entries, and much discussion of new car companies (think Tesla), Subaru rarely breaks through. And regardless of the clutter in the automotive space, Subaru has little brand consideration.

As marketers, one of our first goals is to get on the shopping lists, we call it the “consideration set,” of as many consumers as possible. The next goal is to get the customer to the dealership or at least to a website where the customer can price and equip a vehicle and hopefully request a quote or find a dealer. Unless you can get yourself on that shopping list, you struggle mightily. Subaru it seems, has been doing a decent job of gaining some traction, but when the competition is outpacing it exponentially, these slight gains may be insignificant. Subaru is not only not next in line to Toyota and Ford, but it is about eight slots away. So the believability factor for a vehicle that is not on that consideration set seems far fetched.

That said, I tend to see more of the positives in this campaign — but I am always going to give credit to the company that is not afraid to step out of the norm to make a statement and gain some attention for their brand. In this case, what does Subaru have to lose? They are admittedly at the bottom of the auto manufacturing pack in terms of sales and awareness. They have seen some gains in sales but are likely seeking far more than the incremental sales they have been achieving so far. They are also probably quite convinced that their current customer base, one that has a slightly higher level of education, disposable income and is geographically located at the edges of the country, will see the humor in this parody and will be all the more emotionally attached to the brand as a result.

At the end of the day, as with all ad campaigns, the success will be seen in the showroom. My prediction is that this will work in favor of Subaru, providing more attention and delivering a brand image of smart, funny, and out-of-the-norm. All of which are refreshing in the sea of sameness — the mediocrity — that we are often subjected to.