Archive for category innovation strategy
Is Innovation Good or Bad? Yes!
Posted by Tim in innovation strategy, time on 3 September 2010
An article by Pat Lencioni in Business Week called Why Companies Need Less Innovation has generated a bit of controversy, at least in the part of the internet that I live in. His basic premise is that it is a mistake to try to make an entire company innovative – instead, it is better to just let a few people in upper management innovate, while everyone else focuses on just doing their job. Here is his argument in a nutshell:
What should leaders do? Be more open to new ideas from employees? Probably not. Better yet, they should stop overhyping innovation to the masses and come to the realization that only a limited number of people in any company really needs to be innovative.
As heretical as that may seem to those who want to believe that “innovation is everyone’s business,” consider that even the most innovative and creative organizations need far more people to be dutiful, enthusiastic, and consistent in their work than innovative or creative.
Think about a movie set. For every writer or director or actor on the payroll, there are hordes of people who have to be technically proficient, consistent, patient, and disciplined in their responsibilities. If they innovate, the project turns to chaos.
I think this argument is wrong. Just watch the incredibly extensive ‘making of’ features on the Lord of the Rings dvds to see how wrong his movie-making example is. However, Lencioni’s main argument has already been effectively answered by Steve Denning (New defense of traditional management: firms need less innovation!), Ralph Ohr (Do Companies Need Less Innovation?), James Todhunter (Why Companies Need Pervasive Innovation) and Steve Denning again (More or Less Innovation? Duh!). All these are well worth reading, and I think that the title of the second Denning piece pretty well sums up my thoughts on the debate.
But there’s one point that I’d like to add – even though I spend all of my work time researching and talking about innovation, and trying to help organisations become more innovative, I don’t think that innovation is always good. Innovation is value-neutral.
What do I mean by that?
A parallel debate is going on over the impact of the internet. Some see it as an engine of pervasive positive change, while others argue that its impact is overwhelmingly negative. The arguments between technology optimists and pessimists are nicely summarised by L. Gordon Crovitz in his article Is Technology Good or Bad? Yes. The point that he makes is that technology is value-neutral – it is only our uses of it that are good or bad:
Among the schisms between these groups: that the Web promotes personalization that can become fragmentation; creates information abundance that can become information overload; allows for the creativity of amateurs while undermining the business models of professionals; and enables the wisdom of crowds that can result in the stupidity of the lowest common denominator.
This is an important point. Technology has both positive and negative impacts – and so does innovation. Innovation leads to all of the medical advances that have extended our life expectancies from 60 years in the late 19th century to 80 years now. Innovation has also led to the creation of the novel management structures that make it easier for terrorist organizations to operate.
I’m an innovation optimist. The research data overwhelmingly demonstrates that organisations that are more innovative are more profitable, and better places to work. Most of the time, the organisations that are more innovative do in fact have systems in place that help everyone innovate, not just a handful of people at the top.
However, if we are managing an innovative organisation, the question that we must consider is what goals do our innovations support? In order for innovation to be good, we need to be doing things that are worth doing.
By definition, innovations change the world. It’s up to us to make sure that our innovations change the world for the better.
Some Thoughts on the McKinsey Global Innovation Survey
Posted by John in innovation, innovation strategy on 31 August 2010
McKinsey have just released their 2010 innovation survey. It’s a very thought-provoking read and its based on a survey of over 2000 respondents from several industries. The survey can be found on McKinseyQuarterly.com and its free to get a subscription. Many of the survey results regarding the management of innovation as a process are consistent with a lot of things that we have been writing on the blog. According to McKinsey, these same management issues come up year after year, too.
Interestingly, exhibit 4 shows that most managers think that innovation performance would improve with a better pipeline of big ideas (57%), yet only a third of these managers thought they had a good balance between idea generation and effective execution. The ideas trap is alive and well!
One of the most interesting graphics related to the effects of formalizing the innovation process. Most respondents did not have a formal innovation process and only a third were able to say that they had their innovation initiatives aligned with strategy at the business or corporate level.
However, those that reported having a very formalized innovation management process (about 20%) reported higher rates of innovation rejection within the business and slower times to market compared to firms that had more informal innovation management processes. While it would be interesting to know what these processes actually look like, it gives us some evidence that too much formality is a bad thing.
Innovation for Now and for the Future
Posted by Tim in innovation strategy, time on 17 August 2010
One of the important ideas that follows from managing innovation as a process is that to be successful at it, you need to manage a portfolio of different innovation initiatives. This means that you need to have a mix of incremental and radical innovation ideas. One good way of building an innovation portfolio is to use the three horizons model.
The three horizons model was first published in The Alchemy of Growth by Merhdad Baghai, Stephen Coley, and David White in 1999. The fundamental idea behind the model is that we need to be thinking about innovation across three time frames. Sheldon Laube recently wrote a good post on this model as well, which included a nice visualisation of it, which apparently comes from Innovation Tournaments by Christian Terwiesch and Karl Ulrichwhich. I have adapted it slightly here:
When you innovate using the three horizons framework, the first horizon involves implementing innovations that improve your current operations, horizon two innovations are those that extend your current competencies into new, related markets, and horizon three innovations are the ones that will change the nature of your industry. In general, H1 innovations tend to be incremental, while H3 are more often radical innovations. There are several key ideas that arise when using the three horizons model.
- Innovation must be linked to strategy: tools like the 3 Horizons framework are good ways to connect innovation with strategy. As you develop strategy, it will provide some guidance about where you want to end up in the future – you can then orient your H2 & H3 efforts in alignment with these future goals.
- Think of innovation efforts as a portfolio: we need to have innovation taking place across all three time horizons. Thinking about this directly helps us ensure that we have a balanced portfolio. We need to be innovating enough in H1 to make sure that we stay competitive. H2 is the area where we use existing competencies to drive growth. To protect ourselves against disruptive innovations, we also need to be placing some small bets (or taking real options) on where our industry might go in the future – this is the H3 domain.
- A balanced portfolio does not mean 1/3 or our resources in each area: Google uses a 70/20/10 split – most of their innovation resources are put into improving what they are currently doing – H1 initiatives. They have relatively less invested in the longer-term ideas. In most cases, these seem like reasonable investment proportions. If your environment is particularly turbulent, you can increase the investments into H2 and H3 innovation – it all depends on the situation you face.
The tricky part in all of this is management. It takes different skills to innovate in H1, where most of the ideas are incremental, than it does to innovate in H3, where many of the ideas are more radical. Nevertheless, organisations that are successful over time figure out how to do this well.
Thinking of innovation as a portfolio is one good way to manage the process more effectively.
The Best Way to Have a Great Idea…
Posted by Tim in book riffs, innovation strategy on 16 August 2010
Dual Nobel Prize winner Linus Pauling famously said “The best way to have a great idea is to have a lot of ideas.”
He was right.
Well, really, he won two Nobel prizes, so my opinion here is relatively unimportant. But anyway, I think he was right.
The quote from Pauling showed up again recently in The Medici Effect by Frans Johansson. The book is very good – it talks about working at the intersections between disciplines in order to come up with radically innovative ideas.
Johansson brings this up to make a couple of important points. The first is that the people that we think of as being innovative often have history of executing a large number of ideas:
Some individuals or creative teams will come up with ten, a hundred, or even a thousand times more ideas than their peers. Not only that, those who have created the most are also the ones who have the most significant innovative impact. This was true in the past; Pablo Picasso, for instance, produced 20,000 pieces of art; Einstein wrote more than 240 papers; Bach wrote a cantata every week; Thomas Edison filed a record 1,039 patents. This holds true today. Prince is said to have over 1,000 songs stored in his secret “vault,” and Richard Branson has started 250 companies.
Obviously, there are also great ideas from people that aren’t so prolific. But Johansson is saying that generating a lot of ideas, and then trying them out is one outstanding way to eventually hit upon a great idea.
This leads to the second point – if you generate and try a lot of ideas, they’re not all going to be great, even if you are a creative genius. To show this, he revisits those examples:
… this explanation ignores the fact that groundbreaking innovators also produce a heap of ideas that never amount to anything. We play only about 35 percent of Mozart’s, Bach’s or Beethoven’s compositions today; we view only a fraction of Picasso’s works; and most of Einstein’s papers were not references by anyone. Many of the world’s celebrated writers have also produced horrible books, innovative movie directors have made truly uncreative duds, megasuccessful entrepreneurs have disappointed investors, and pioneering scientists have published papers with no impact whatsoever on their colleagues.
This ties into a couple of critical points about innovation. One is that it is not enough to have ideas. We have to sort them to figure out which ones work and which ones don’t. We can do this with some sort of selection process, but the best form of selection is to try them out. See what works and what doesn’t. Experimenting is a critical innovation skill.
The second point is that failing is part of the innovation process. Stefan Lindegaard has recently triggered a discussion on this topic, which as usual has elicited mixed responses. Some say that it is better to succeed than fail, and that it is dangerous to encourage failure. While this may be true, it is also true that if some of your ideas aren’t working, you aren’t trying enough ideas. Here’s a good take on this from Bloomberg Weekly:
But intelligent failures — those that happen early and inexpensively and that contribute new insights about your customers — should be more than just tolerable. They should be encouraged. “Figuring out how to master this process of failing fast and failing cheap and fumbling toward success is probably the most important thing companies have to get good at,” says Scott Anthony, the managing director at consulting firm Innosight.
As Stefan says, we need to fail smartly. Experiment, then do more of the things that work, and learn from the things that don’t. One key point here is that in order to learn from our experiments, we have to set them up so that we gather useful data regardless of whether they succeed as we expect them to or not. This is another critical innovation skill.
So I definitely agree with Pauling – the way to get a great idea is to try a lot of them. To do this successfully, we need to develop an experimental approach to innovation.
Note: Here is Johansson explaining some of the key concepts from the book, which is well worth reading:
Listening to customers…. really listening.
Posted by John in business models, design, innovation, innovation strategy on 11 August 2010
One of the consistent messages from innovation surveys is that customers are a major source of innovation. Sometimes customers with more extreme uses for products will adapt products to suit their purpose and then the manufacturers find out what is happening and take these adaptations on board. If you’ve seen the videos of big wave surfing, many of the board modifications were made by the surfers and then adopted by the makers.
On other occasions, a customer might give an idea back to the producer but often they won’t give the feedback unless it is asked for. Getting to know your customer better is a good way to improve your innovation performance.
One of the featured companies in the Brisbane Innovation Scorecard was Aluminum Boats Ltd. This company is in a tough industry where costs are rising and the strong Australian dollar makes competitiveness a real challenge in export markets. Nonetheless they have managed to grow the business and continue to win contracts. For this company, the customer is central to the innovation process and the strategy of the company. To get the type of innovation they need, the company forms long-standing relationships with key partners. As stated by the managing director of the company, Roy Whitewood,
We set out to be different from the beginning. Most boat builders in our class tend to work on one-off projects.
Four years ago we chose a different direction for Aluminum Boats. We selected big clients and work with them to solve problems. We innovate openly with our clients in design and process. In this way we also manage all aspects of our boat building with the highest quality materials and latest construction techniques.
On receiving the award for product innovation at the launch of the Brisbane Innovation Scorecard, Stuart Pascoe, Aluminium’s GM, talked about the commuter ferries that were the focus of the prize. He talked about not only listening to the customer, but also the customer’s customer. So not only did they work with the ferry operator to design the right boat for the job but they also talked to the commuters who used the ferry. When they asked commuters about what is was like to live on an island in the bay and commute to Brisbane, it seems that many didn’t like the slow travel times. One of the reasons for the slow commute was the problem of hitting dugongs. These are protected animals. The result was a dugong-friendly fast ferry and as Stuart puts it in an interview, a hit might give the dugong a headache but it won’t kill it.
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After the launch of the scorecard, I took a taxi back to the university to catch up on work. I was set to make a few phone calls on the way when I realized that the taxi driver was a very talkative fellow, so I put the phone away. One thing about Australian taxi drivers is that they are very likely to ask you everything about your life, without any sense of this being inappropriate. This driver wanted to know what I had been doing in the city, so I told him about the launch of the Innovation Scorecard and the companies that had been recognized for their leadership in innovation. When I mentioned Aluminium Boats he turned to me and said that he knew the company well and thought they were an excellent business.
It turned out that my driver was a volunteer coast guard and was a part-timer skipper of one of their boats. He said that they had a few boats but the one designed by Aluminium was by far the best. When I asked him why, he said that the company had spent a lot of time talking to everyone who worked on these boats. They really wanted to know what it was like to be searching for people in the water at night and what it was like to spend a long time on the boats during an emergency. My driver had told them about vision problems in low light conditions and the need to have a special set up in the cockpit with night-vision. This need was incorporated into the final design. Tim writes about empathy-driven innovation and Aluminium Boats is a very good example of what he is talking about.
The thing is that Aluminium is organized for ‘listening’ and its not just something that is part of their marketing. Having 90% permanent staff in an industry where subcontracting is common, fewer customers where long-term relationships can be formed and sticking with design and construct jobs are all strategic choices that help them to listen better.
As Stuart Pascoe, GM says
We don’t bash the problem over the head with a hammer. We go out, meet the agencies and find a way around it.
Craft-Based Innovation – Dodocase
Posted by Tim in business models, innovation strategy on 8 August 2010
Check Kevin Rose‘s of the Dodocase for iPad, one of the more gorgeous things I’ve run across recently:
Schumpeter defined innovation as the formation of new connections which drive economic growth. In The Nature of Technology, Brian Arthur reinforces this idea by saying that all new economic ideas build on the combination of things that already exist. In this case, Dodocase has come up with an innovative craft-based business model by combining the idea of artisan book-binding techniques with the new technology of the iPad. Both of these are then combined to answer the question ‘what if our iPad case looked like a Moleskine notebook?’
There is so much emphasis these days on getting to scale that we often lose sight of the value of craft. Here is the video that documents the construction of the outer case – you can see the craft in the process:
The bamboo part of the case obviously requires some skill to build as well.
The really interesting part of the Dodocase story to me is the price: it lists for about $60 US – which as about as much or less than you’d pay for nearly all of the mass-produced iPad cases that are available. Traditionally, we’ve often thought that the problem with craft-based business models is that it is a much more expensive way to produce things.
But as the Dodocase shows, this is not always the case. The real problem with craft is that it is slower. There is currently a 4-6 week wait list to buy one.
Innovation is about coming up with new combinations of ideas. They don’t always have to be cutting-edge things. The Dodocase is a great example of combining ideas that have been around for a long time – people have been binding books in this way for centuries, and the Moleskine-style design has been around for ages as well. They’ve combined these two ideas to come up with something that is unique.
And pretty cool…
(hat tip to CrunchGear for pointing me to these two videos)
Innovate What You Know? part 2
Posted by Tim in innovation strategy on 1 August 2010
Here’s an actual conversation I had a few years ago with a programmer for whom I was doing some work:
Tim: I did some usability testing on your website.
Tim’s Friend: Great!
Tim: There are some problems though – it renders poorly on Netscape and looks like garbage on a Mac.
Tim’s Friend: I don’t care – anyone that isn’t using Internet Explorer on a PC isn’t serious, so we don’t need to worry about them.
This is the flip side of my last post talking about innovating by solving your own problems – sometimes, your own problems are fairly unique.
The situation back then was that my friend was a brilliant programmer. He had written a nice piece of database software taht was meant to manage inventory for his company. Once it was done, he and the owner of the firm decided that it would be a good program to sell to web developers that needed to integrate websites with databases. In particular, it seemed like it had potential for people making e-commerce sites.
The problem was that the software was very good at solving their initial problem, but it was no good for solving any other peoples’ problems. The issue with cross-platform compatibility was just the tip of the iceberg. After that conversation, I didn’t even dare mention linux, and one of the problems with the software was that while it did a few extra things, it was essentially the same as php. But they wanted to charge over $10,000 for it.
There were other problems too. It didn’t really have a user interface at all – the presumption again was that only programmers would be using it, and they’ll know what they’re doing, so why waste time on usability?
Also, the program required its own server, so if you were using it to build sites, they had to be installed on machines with the server installed. Again, not user friendly.
To recap: my friend had built a really nice program with very poor usability that only worked on one platform, and wanted to sell it for $10k more than the really nice free program that did basically the same job, while working on multiple platforms with a pretty nice user interface.
This venture was unsuccessful.
It’s pretty easy to say in hindsight that my friend should have been more aware of what was out there. But this is one of the difficulties with solving your own problem when you innovate – it’s often very hard to keep track of these things.
This is why I am cautious about the “scratch your own itch” approach to innovation. Solving your problems has many advantages, but I think that this approach must be combined with a reasonably good knowledge of what others might need themselves.
The best approach is to use empathy to drive innovation in solving a problem that you care about as well. The focus you get from solving your own problem is important, but so the ideas you generate through having empathy with the needs of others is just as critical.
Critical Mass
Posted by Tim in connect, innovation strategy on 29 July 2010
In a brilliant post this week, Charlie Stross asks what’s the minimum world population needed to maintain the current level of the technology available to us today. Not long ago I talked about how isolation from the mainland made Tasmanian technology go backwards for a significant period of time – this is exactly the issue that Stross is addressing as well.
Here are a couple of the points that he raises:
And as for your smartphone? The damned thing has a component count somewhere between ten major subsystems and frame components and a hundred billion (if you go down to the smallest scale and count the capacitors in its FLASH memory). The number of fab lines on the planet that can make memory chips of that density is limited, and they rely on rare elements mined only in exotic locations and in tiny abundance.
…seemingly similar artefacts (cars, phones, airliners) have invisibly accreted complexity. The complexity makes them better (safer, more economical, more luxurious) than their predecessors, but vastly more difficult to engineer; stuff that used to be fixable by shade-tree mechanics and jobbing electricians has receded over the horizon. Back in the early 19th century, the complement of a sailing ship could expect to maintain the ship in every significant way using tools and expertise that they could carry aboard the ship. Today in the early 21st century, that’s not an option with airliners or probably even automobiles.
Thirdly, the complexity embodies in these new products means that their production is dependent on a complex web of lower-level specialities.
Then I found this current example of how we lose technology via Ralph Poole – the US has forgotten how to make Trident missiles. Here’s the story:
Plans to refurbish Trident nuclear weapons had to be put on hold because US scientists forgot how to manufacture a component of the warhead, a US congressional investigation has revealed.
The US National Nuclear Security Administration (NNSA) “lost knowledge” of how to make a mysterious but very hazardous material codenamed Fogbank. As a result, the warhead refurbishment programme was put back by at least a year, and racked up an extra $69 million.
For the first time, the report described the difficulties faced by the NNSA in trying to make Fogbank. A new production facility was needed at the Y-12 National Security Complex at Oak Ridge, Tennessee, because an old one had been demolished in the 1990s.
But vital information on how Fogbank was actually made had somehow been mislaid. “NNSA had lost knowledge of how to manufacture the material because it had kept few records of the process when the material was made in the 1980s, and almost all staff with expertise on production had retired or left the agency,” the report said.
The moral of the story is simple. Connections drive innovation. We need input from people with a diversity of viewpoints to help generate innovative new ideas. If our circle of connections grow too small, or if everyone in it starts thinking the same way, we’ll stop generating new ideas. And then we’ll forget things like how to make a fishing hook. Or a trident missile.
We need a critical mass of intellectual viewpoints if we want to innovate.
Managing Different Creative Styles
Posted by Tim in book riffs, connect, innovation strategy on 25 July 2010
Connecting ideas is the fundamental creative act of innovation. Trying to harness this creativity within ourselves and our organisations is the first step in managing innovation as a process. Of course, this is a step that resists systematisation – as Simon Bostock points out, innovation is a cloud not a clock. In that post he quotes Jonah Lehrer:
Karl Popper, the great philosopher of science, once divided the world into two categories: clocks and clouds. Clocks are neat, orderly systems that can be solved through reduction; clouds are an epistemic mess, “highly irregular, disorderly, and more or less unpredictable.” The mistake of modern science is to pretend that everything is a clock, which is why we get seduced again and again by the false promises of brain scanners and gene sequencers. We want to believe we will understand nature if we find the exact right tool to cut its joints. But that approach is doomed to failure. We live in a universe not of clocks but of clouds.
Malcolm Gladwell shows why this process might be hard to manage in his story called Late Bloomers (originally in the New Yorker, then in his book What the Dog Saw). One problem is that there are radically different styles of creativity.
Gladwell talks about several examples of people that came into their own creatively later in life. One comparison that he makes is between Picasso and Cézanne. Picasso was precocious – his genius was apparent from pretty much the first painting he showed in public in his early 20s. On the other hand, Cézanne took much longer to develop. The consensus now is that his early work was for the most part terrible (in part because he was not technically skilled when he began) – his string of masterpieces didn’t start until he was in his 50s. In addition to differences in when their artistic talent emerged, there were also substantial differences in the ways that they thought about creativity:
Prodigies like Picasso, Galenson argues, rarely engage in that kind of open-ended exploration. They tend to be “conceptual,” Galenson says, in the sense that they start with a clear idea of where they want to go, and then they execute it. “I can hardly understand the importance given to the word ‘research,’ ” Picasso once said in an interview with the artist Marius de Zayas. “In my opinion, to search means nothing in painting. To find is the thing.” He continued, “The several manners I have used in my art must not be considered as an evolution or as steps toward an unknown ideal of painting. . . . I have never made trials or experiments.”
But late bloomers, Galenson says, tend to work the other way around. Their approach is experimental. “Their goals are imprecise, so their procedure is tentative and incremental,” Galenson writes in “Old Masters and Young Geniuses,” and he goes on:
“The imprecision of their goals means that these artists rarely feel they have succeeded, and their careers are consequently often dominated by the pursuit of a single objective. These artists repeat themselves, painting the same subject many times, and gradually changing its treatment in an experimental process of trial and error. Each work leads to the next, and none is generally privileged over others, so experimental painters rarely make specific preparatory sketches or plans for a painting. They consider the production of a painting as a process of searching, in which they aim to discover the image in the course of making it; they typically believe that learning is a more important goal than making finished paintings. Experimental artists build their skills gradually over the course of their careers, improving their work slowly over long periods. These artists are perfectionists and are typically plagued by frustration at their inability to achieve their goal.”
Where Picasso wanted to find, not search, Cézanne said the opposite: “I seek in painting.”
I think that there are parallels in innovation. There are innovations that seem to spring straight out of the heads of their young creators, like the search algorithm upon which Larry Page and Sergei Brin founded Google in their mid-20s. That’s Picasso-style creativity.
And then there ideas that take a while to germinate, and many iterations, like the Dyson Vacuum. James Dyson took over five years and hundreds of prototypes to get his bagless system to work. This invention, launched while he was in his late-30s, represented a major leap forward in terms of technical sophistication and accomplishment relative to his earlier inventions. This is Cézanne-style creativity.
This has a couple of implications for innovation management:
- At a personal level, we need to know which approach works best for us – the intuitive, broad, big picture, jump-straight-to-the-answer Picasso-style method, or the deliberate, slow, iterative Cézanne style.
- As managers, we need to avoid using ideas like this to support stereotypical thinking. Picasso worked in the same way all the way through his career. His creative style was established early and persisted. So it is not an issue where young people are creative one way, and older people are creative in another.
- If we are working with groups of people that are not experienced thinking creatively, we might need to set up innovation systems organised more around seeking, iteration, and Cézanne-style creativity.
There are many challenges in trying to manage innovation as a process. Accounting for different styles of creative thinking is another factor that we must consider in doing this.
On the other hand, all this might just be trying to turn a cloud into a clock…
(picture from flickr/Odalaigh under a Creative Commons license)
Old Spice Guy – Innovation Must Lead to Results
Posted by Tim in innovation strategy on 22 July 2010
I love the Old Spice Guy as much as the next man (which means, of course, that I enjoy his commercials greatly in a shared spirit of manliness and a joint appreciation of expensive magnifying glasses). The original commercial is inventive and funny, and the social-media-based campaign that they ran last week is enormously innovative. If you haven’t seen any of this yet, here is the original spot:
And here is the description from Read Write Web of the recent campaign:
A team of creatives, tech geeks, marketers and writers gathered in an undisclosed location in Portland, Oregon yesterday and produced 87 short comedic YouTube videos about Old Spice. In real time. They leveraged Twitter, Facebook, Reddit and blogs. They dared to touch the wild beasts of 4chan and they lived to tell the tale. Even 4chan loved it. Everybody loved it; those videos and 74 more made so far today have now been viewed more than 4 million times and counting. The team worked for 11 hours yesterday to make 87 short videos, that’s just over 7 minutes per video, not accounting for any breaks taken. Then they woke up this morning and they are still making more videos right now.
Here is the response to 4Chan:
All very creative, and the use of social media to drive the campaign last week is incredibly innovative. Procter & Gamble, the company that owns the Old Spice Brand, the Old Spice Guy himself Isaiah Mustafa, and advertising agency Wieden + Kennedy have all been justifiably praised for this campaign. The media attention has been enormous, the buzz has been even bigger, and videos have been shared pretty much everywhere by everyone.
So what could possibly be wrong with all of that?
Well, one thing.
None of it seems to be helping P&G sell any more Old Spice. Here is a summary from BNet:
For instance, it was none other than P&G that picked up the Film Grand Prix this year for Old Spice’s “The Man Your Man Could Smell Like” TV spot from Wieden + Kennedy. There is little doubt about the viral hit’s popularity. Launched in February, the official version has racked up nearly 12.2 million YouTube views.
But sales of the featured product—Red Zone After Hours Body Wash—aren’t necessarily tracking with that consumer appeal: In the 52 weeks ended June 13, sales of the brand have dropped 7 percent according to SymphonyIRI.
This is the danger of innovation for its own sake – you can be highly innovative and still not have an impact on your bottom line. There are steps to take to try to address this problem:
- Make sure that your innovation management program is integrated with your overall strategy. If innovation is not linked to strategy, you will not meet your goals. Innovation is not an end in itself, it is a means to improve the way your organisation functions.
- Develop innovation metrics that measure bottom-line impacts, not just innovation output. Innovation metrics are incredibly important. You need to not only measure innovation outputs (patents, creative awards, etc.), but you also need to measure the impact of innovation. If you are developing an innovative advertising campaign, it needs to not only generate interest and profile, it needs to increase your sales. All innovation must in some way make your organisation more effective.
I hope that P&G is rewarded by all of this in the end. It has been an incredibly inventive effort, and the spots are consistently hilarious. But the overall lesson here is that innovation must lead to results, otherwise it is a waste of effort and resources.
Update: This report suggests that the short-term response to the social media campaign has been an increase in sales of 107% over the previous month. This is actually pretty good news – it shows that the response to the genuinely innovative social media campaign has been substantially stronger than the response to the old-style clever commercial. Be sure to read the comments to see some good discussion of this point.
