First-mover DISadvantage

For many years academic studies have touted the commercial advantages of being first to market with innovations.

More recently there has been a backlash and example after example has emerged where the second-mover has had the upper hand.

One of the darlings of the first-mover brigade has always been Procter & Gamble’s disposable diaper brand, Pampers. Certainly Pampers was and is a massive success.

Problem is – it was never the first-mover. That was Johnson & Johnson’s CHUX, which had first entered the market in 1949.

P&G’s R&D people were able to spendseveral years tackling each of the major problems with CHUX and in due course developed a product that was more absorbent, had lower leakage, was more comfortable on baby, offered two sizes and could be produced at significantly lower cost (and retail price).

Pampers was test-marketed in the early 1960s and by the end of that decade had achieved well over three-quarters of a market that itself was growing exponentially year on year. The game was over pretty much by the time I worked in that market – with Kimberly Clark’s brand in Australia.

So much for first-mover advantage. More like first-mover DISadvantage.

Do you Xerox?

I gather one must not use Xerox as a verb, ie to Xerox, or they come after you to protect their brand name.

Two major consequences of all that defensive corporate effort over several decades were:

1. to make several lawyers wealthier and

2. to take their eye off the ball, indulging in a series of expensive and irrelevant acquisitions, and losing their reputation for cutting-edge innovation in their core markets.

At one time, Xerox effectively owned the photocopier market, but then two Japanese companies ate their breakfast.

First Canon came in with the colour copier. Then Ricoh with the first digital copier. And both succeeded at Xerox’s expense with smaller machines, better attuned to customer needs.

To cap it all, as technology moved forward again, Hewlett-Packard arrived to dominate the office printer market.

So now, when you go “Xeroxing”, odds are you’ll actually be using a Canon or a Ricoh.

Luckily, a decade ago the company found a new CEO, Anne Mulcahy, who was able to re-focus and turn the business around. But even Mulcahy had a note of caution in returning Xerox to R&D-based innovation.

She said in an interview: “You can either sit and wait like Kodak or Fuji…It’s always more attractive to stay in the old technology from a profit standpoint. Always. But you’ll be going out of business.”

Innovation and Islam

I spoke recently about innovation at a conference (organised by Continuum) of family businesses from the Middle East.

Many issues were raised by the delegates, but there was one that seemed to hang in the air unspoken. And it was this: does Islam itself have a dampening effect on innovation?

I have thought about this a good deal in the intervening days – and my tentative answer is that any dampening effect springs not so much from Islam, but rather from the very hierarchical nature of Middle Eastern society. And, of course, this is so often strongly present in family businesses.

After all, Islam is alone among the major religions of the world in having been founded by a trader. And the Koran is supportive of success in business – quite unlike the New Testament, which has practically nothing positive to say about the creation of wealth.

The powerful presence of respect for elders, within a command and control culture, always has a negative impact on the expression of new thinking and new ideas. This is true in all societies where hierarchy is a primary force – in Russia, China, India, the Middle East and elsewhere.

If these countries wish to grow dramatically in their capacity to innovate – which they all do – the question in my mind is not so much how to reduce hierarchy in general, but how to create situations where it is temporarily removed, so that people can express new ideas without fear of reprisal.

My first opera

I was around fourteen when my mother took me to the opera for the first time. I think it was her first time too – not really her cup of tea. She knew that I had grown to love classical music, so this seemed a good next step.

We went to the Hippodrome in nearby Coventry to see Bizet’s Carmen. Performing it was the Sadler’s Wells company, on tour from London. Carmen was the sultry Patricia Johnson, and the Australian tenor, Donald Smith, her ill-used lover Don José. Colin Davis was the dazzling, youthful conductor.

I was utterly entranced from the first notes… The music, the story, the characters, the costumes and designs, the lights. The brilliant singing and playing. It sparked a life-long love affair.

Here is Donald Smith singing the Flower Song from Carmen – from that production, recorded in 1961: http://www.youtube.com/watch?v=q74t8LhATuM

And on Friday I shall have the pleasure of meeting another fine Australian tenor who was a leading member of the Sadler’s Wells company in the 1960s, Kevin Miller.

Discovering new oceans

It’s sad, when something profound has been written, to find it consistently attributed to the wrong person, or even to Anon.

What’s more, I’ve done this myself. When I put together the Imagine book for Synectics, I had no idea where the following quote came from. I just knew it was important. So I attributed it to the aforesaid Mr Anon. Here it is:

“One cannot discover new oceans without consenting, for a long time, to lose sight of the shore.”

I certainly was not alone. And even in the age of the World Wide Web, it’s still said to be by that prolific unknown author, or, sometimes, extraordinarily, by Christopher Columbus.

Well, in fact it’s from Les faux-monnayeurs [The Counterfeiters], a novel by the French writer and Nobel Prizewinner, André Gide, published in 1925.

And what a vivid metaphor it is. Fundamental to success in the creative process.

(The portrait of Gide, above, is a detail from “The reading by Emile Verhaeren” by Théo van Rysselberghe.)

Hemming and hawing over Diet Coke

Here is another example of fast-following being better than leading.

Twenty years ago, it became clear that there was a really major market out there for diet cola. And regular Coke had the reputation for being stuffed with calories.

The Coca-Cola Company had sold for many years a brand called TAB – and the reason that the company gave it a separate name, far from Coke, was that it tasted foul.

So the challenge was to produce a good-tasting product with zero calories. First to market was a local US brand, Royal Crown. It tasted good and consumers liked it. But the truth was that they were faced with a powerful global competitor who could obliterate them quite easily.

So after much hemming and hawing – it seemed to take years – Coca-Cola finally launched Diet-Coke (Coca-Cola Lite in many markets), which built massive sales everywhere, including in Australia, where my ad agency, Lintas, handled the launch.

I think the lesson is not to go up against a much bigger competitor with your new product if they can blow you out of the water so easily.

In that case, you’ll need an important aspect of your product or brand that’s either hard to copy, or, better still, has some IP protection.

To lead or to follow? That is the question

Which is the better strategy - leading or following? Well, of course, it depends…

If there are problems with a competitor’s new product that have not been resolved and you can address them speedily, then it’s better to learn from their experience.

A dramatic example of this was the introduction in 1952 by the British aero manufacturer, De Haviland, of the world’s first commercial jet airliner, the Comet. All seemed well for a while, but then Comets started to fall out of the sky with significant loss of life. The problem, they discovered in due course, was stress fractures resulting from the square shape of the windows.

Boeing’s introduction of their 707s a few years later completely solved that problem and the Boeing 707 went on to dominate world markets for a generation.

So if you plan to be an effective fast-follower, it’s good to set yourselves up to study competitors’ failures, as well as their successes, and to see if you can fix their problems and outflank them.

The Dark Night of the Innovator

A really useful insight into the pathology of innovation is the fact that at some stage or another, even with projects that are being built with boundless enthusiasm, whistles and bells, nearly all of them run into difficulties surrounded by mounting disillusion.

This is “The Dark Night of the Innovator”. We have all been there, I guess.

So far as I can tell, the concept was first formulated by two colleagues at Synectics in the 1980s – John Philipp and Sandy Dunlop. I included it in a small book, Imagine, which I did for Synectics a few years later.

Even with the most perfect project plan (if there is such a thing), it’s important to remember that things will not always run smooth and that particular care and attention, skill and energy is needed in negotiating one’s way out of the Dark Night.

As the great twentieth century poet, TS Eliot, put it in his “The Hollow Men”:

Between the idea
And the reality
Between the motion
And the act
Falls the Shadow.

Truth and Reconciliation in the City

When we launched the Centre for Creativity at City University London we held a “Big City Brainstorm” which pulled together a very diverse group of clever people – including several from the financial community in the City of London.

We were searching for ways to address issues emerging from the global financial melt-down and in particular the “addictive behaviour” (as one of our participants, a psychiatrist, put it) of people in the banks so badly hit.

There were a number of interesting and exciting ideas put forward, prominent amongst them the establishment of a Truth and Reconciliation Commission along the lines of post-apartheid South Africa.

On the day, there seemed to be quite a groundswell in favour of the concept. But in the days following, it seemed as though all the City of London folk had had second thoughts.

Apparently we just didn’t understand…

I still think it could be enormously helpful. How about you?

Anyway, the video about it all was a pleasure to make. See what you think: http://www.youtube.com/watch?v=N83vCg7q36c

London’s burning

The marriage of the internet and the mobile phone has helped to organise and mobilise revolutionary movements in a wide variety of countries with autocratic and repressive regimes – in Tunisia, Egypt, Serbia, Burma, North Korea and many more. That’s the upside.

Of course, at the same time it has facilitated all the looting and burning in London and around the UK in recent days, mobilising and directing large groups of people at a moment’s notice.

Right now the police appear to be operating totally in the past, always behind the play.

Where will it go next? And how quickly can the authorities catch up, if at all?

www at twenty

Two days ago, Saturday 6 August, was the twentieth anniversary of the World Wide Web.

It was on that day that the first website was posted by the 36 year-old physicist, Tim Berners-Lee. It’s still there: http://info.cern.ch/

Is it the most important and life-changing invention of the twentieth century?

(Thanks to Deborah Mills for flagging this up on Facebook.)

Neckties and creativity

I went to a meeting recently at a London club and in the lobby there was a notice requiring members and guests to dress “appropriately”. Think I get the picture.

In fact, I haven't worn the “appropriate” suit, shirt and tie ensemble for over a quarter of a century. And clubs like the one I visited don’t seem to have noticed that daytime dress for men has been steadily changing over that period of time. So when I visit a client nowadays, I find that nobody is wearing a tie and that I’m the only one there with a traditional jacket.

It seems extraordinary to me that something that emerged as a fashion norm for men near the start of the twentieth century should have persisted in its rather tyrannical way for over 100 years. But, in truth, in 2011 it’s only a handful of times and places that still require that uniform. Top of mind, aside from olde worlde clubs, is salesmen. Is the reason that these institutions still insist partly because they fear that their blokes are going to turn up in shorts?

When I started working in innovation and creativity, I would encourage male participants in workshops to take off their ties in order to get into a more open and creative frame of mind. Some seemed to feel that they might be stark naked without it and needed a good deal of coaxing. That particular intervention is hardly ever necessary now.

In an article in Marketing magazine, Coca-Cola’s vice-president of global advertising strategy, Jonathan Mildenhall (above), tells us that his wardrobe consists of twenty pairs of Levi’s, twenty-five pairs of Nike Air Max and some suits from Ozwald Boeteng. Don’t think he’ll be let into that London club any time soon.

Einstein and Procter

I learned much from working on Procter and Gamble's business at Saatchi and Saatchi many years ago.

Not least to condense one’s thinking into concise, clear sentences.

That master of the one-liner, Albert Einstein, said: “If you can’t explain it simply, you don’t understand it well enough.”