Improving and outflanking

I’m very clear with clients that if they haven’t got what it takes to be breakthrough innovators, they should concentrate on studying competitors products and services, existing and new, and outflank them by making improvements in key areas. And moving fast.

After all, that’s substantially what has taken Apple to their current dominant position. And Samsung after Apple.

The power of this strategy first struck me in the years that I worked on new product development with the Rowntree company in York (now owned by Nestlé). It was frustrating that the senior managers would initially be positive about new ideas, but over time it became clear that nothing would actually happen.

Then, one day, one of them took me aside and explained to me the source of their success. “So many of our biggest and most profitable brands were developed as improvements on existing products made by other companies, usually abroad,” he told me.

All this came back to me in recent days, as the Rowntree chocolatier, Brian Sollitt, who died recently, has been feted in the British media as the “genius” behind many of Rowntree’s new products – Lion Bar, Yorkie, Drifter, Matchmakers and, most famously, After Eight.

But while Mr Sollitt undoubtedly was a skilled improver of products, he was not really an innovator. For example, the idea for the wafer thin chocolate mint, After Eight, came from an existing local product in Sweden.

Chunking up Kit-Kat

A client friend, Kees Langerak, was appointed to be marketing director at Nestlé’s confectionery business in York.

After a couple of weeks, he called me: “This business seems scarcely to have innovated at all in years,” he said. “Fact is we are tremendously pushed for cash right now, so I really can’t afford to pay you. But would you do us a favour and advise me on what I might do about it?”

He knew that I had worked in the past extensively with what had been the Rowntree business and so knew the brands intimately. And he had always been an exemplary client!

“I’ll call you back in ten minutes,” I told him.

And this is what I advised: “Invite lots of people from around the business to come into one big room, and ask them to bring their favourite innovation idea that’s been rejected or ignored in recent years. Set the room up as a ‘street-market’ and enable everyone to display their nominations. And then pick out the biggest ideas that can be implemented quickly.”

Out of this simple exercise, in just a few months, came Chunky Kit-Kat. It doubled the size of that already massive brand.

UnConferencing: Un for All and All for Un

While I’ve spoken at dozens of conventional conferences, I’ve always felt that the format – rows of chairs in old-fashioned classroom-style, with “teacher” or a panel of “experts” up front – is quite inadequate, rarely releasing the potential in the room.

So much more can be achieved by radical transformation. I first started experimenting with all this some twenty years ago. Since that time I’ve tried all sorts of different processes and formats, and have evolved a flexible approach that deals with many of the main issues involved in the trad format. Most recently I ran two UnConferences in Manila.

The first was a meeting of the top 350 managers at Nestlé Philippines (one of the largest and most successful companies in the country) and the second at a Brand Renovation masterclass for some 60 senior managers from diverse backgrounds (blogpost 14 November 2011).

A while ago, I wrote another post (31 August 2011) about the first Big City Brainstorm we ran at City University London to launch the Centre for Creativity.

And in January I’ll be running an UnConferencing session within the Association of British Orchestra’s annual conference.

There are a number of important principles involved:

• Communication ceases to be top-down and token Q and A.

• There’s a minimum of presentation and a maximum of dialogue.

• The dialogue (whether brainstorming, problem-solving, debating issues, visioning, planning or whatever) moves from the podium to the body of the room.

• The whole thing needs continuous and skilful facilitation.

• The room can be set up in various ways. I have come to prefer either small circles of chairs or round tables.

• Each circle needs a flip chart, so that ideas/thoughts can be captured immediately.

• It’s important to set up some groundrules for working together. These include the usual stuff – no judgements, anything goes, headline first, speak for yourself and so on.

• I like to work with the maximum of human contact and the minimum of technology, but with groups of 50 or more, the facilitator will need a throat-mike.

• Often, when getting reports back from the floor, I like to have the headlines come up on a big screen at the front – so a skilled “technographer” is needed for this.

Is your organisation still stuck with the teacher/class model? What’s your experience of UnConferencing?

On seeing and not seeing into the future

It’s always a risky business.

In the period before the dissolution of the Soviet Empire, I made several working trips to the various capital cities of Central and Eastern Europe.

Following a trip to Prague early in 1989, I came home and said to whomever would listen, “It’s going to be all over in months. They just need to push at the door”. And the Prague Spring, the Velvet Revolution, happened just a few months later.

A few weeks after Prague, I made my first trip to East Berlin. Through Checkpoint Charlie, for a meeting of the board of directors of the International Advertising Association. After dinner, I went out walking the city with my dear friend, the late Michel Reinarz, communications boss of Nestlé.

All I could see were the telltale signs of an autocratic and repressive regime – policemen with sub-machine guns and German Shepherd dogs, barbed wire, watchtowers, floodlighting, the Wall. The whole kit. And no signs of life evident at all in this great capital city in the late evening.

So I went home and announced to colleagues that, in my opinion, it would be a decade or more before any real change would be possible there, so strong did the grip of the communists appear.

How wrong I was. Thousands started to leave East Germany and demonstrations sprung up – all without the benefit of today’s social networking – most famously in Leipzig. This was led by the chief conductor of the city’s legendary Gewandhaus Orchestra, Kurt Masur. Just like in Prague, it was all over so quickly. And by November the first sections of the wall were demolished.

We can’t always predict the future with any accuracy. But still we have to try – to do the best we can. A problem is that there’s no evidence that politicians, journalists and senior managers are any better at this than the rest of us.

I miss Michel. He was a life-enhancer.

Myth of the Brand Life Cycle

Throughout my working life, there has been a concept, a marketing trope, a metaphor that has consistently been held as a “truth” – the brand/product life cycle. I won’t bore you with the theory. You know it.

It’s just that it has never seemed to me to have any validity, nor be of any use. Fundamentally it’s derived from the concept of animal life cycles, of course. These happen naturally, whereas brand/product life cycles occur through lack of imagination and lack of will.

Well and continuously marketed and innovated, there’s no reason why brands should not go on indefinitely.

Here are sixteen brands that I’ve personally worked on the marketing and innovation of that were launched well before I was born and will be here long after I’ve gone:

Louis Vuitton (born 1854)
Bacardi (1862)
London Underground (1863)
Nestlé (1866)
Campbell Soup (1869)
Toshiba (1875)
Rowntree’s Fruit Pastilles (1881)
Marks & Spencer (1884)
Coca-Cola (1886)
Smirnoff (1886)
Philips (1891)
Fairy Soap (1898)
Persil (1903)
Evian (1908)
Johnnie Walker (1909)
Electrolux (1919)

The people working so hard on them today are, just as I have been over the years, custodians.

Bought your Nespresso machine yet?

I’m often asked how large, established corporations can organise to create breakthrough innovations which really succeed in the marketplace. To be honest, there isn’t one easy solution. So many of them invest vast sums of money in innovation and R&D, and all that happens in reality is that they give birth to a steady stream of more minor, incremental offerings.

If Microsoft can spend some nine billion dollars a year on it (see “Microsoft and their search for breakthrough innovation”, 2 March 2011) and have such limited success, what hope is there for the rest of us?

Well, one strategy that worked extremely well for Nestlé was embodied in the way that they went about developing their Nespresso brand. The company realised quite early that, given their worldwide dominance of the instant coffee market, if they were to enter the ground coffee market with a bang, they needed to have a completely new approach that would rewrite the rules of the game.

To do this, they set up a stand-alone business, geographically and organisationally separate from the “corporate machine”, Nestlé headquarters in Vevey, Switzerland.

And the concept itself is radically different. It is a superpremium product for a much more sophisticated consumer. The relationship with Nespresso starts with the purchase of a coffeemaker/espresso machine. Those things are bought once every eight or so years - and the purchase involves 100+ euros.

Then, having a consumer who has bought a machine, it is about home-delivery of coffee – and a one-on-one communication program including accessories, services and rewards. This required a totally different mindset, different marketing capabilities and completely different structural solutions.

Certainly wouldn’t be without it myself. And it’s a massive success around the world.

Would that have been possible if they had remained part of the mother-ship? I doubt it.

Renovation and Corporate Culture

Skoda is of course a rather exceptional example of successful brand renovation (“Renovate or die,” 1 January 2010). Perhaps more realistic and valuable is the case of the great consumer goods giant, Nestlé.

Over several decades I’ve worked on a dozen or more of Nestlé's brands, getting to know the style of the company quite well. A couple of years ago I interviewed their Chairman, Peter Brabeck. It was he that recognised that renovation was a critical core competence of the business.

Nevertheless, there was even more they could do to ensure that their major brands and products stayed relevant to changing consumer needs and ahead of competition. So from the start of his period of leadership, renovation became a key pillar (alongside innovation) – and this has continued throughout Brabeck’s stewardship of the company.

He told me that he had first realised the importance of renovation very early in his career, when he was a young ice cream salesman. “It’s now a key driving force for our business,” he said to me. And from Kit-Kat to Maggi, that’s exactly what they did.

Is Nestlé the only major corporation to recognise so explicitly the value and power of keeping everyone focused on renovation? Certainly it seems to me that having it separate from, but parallel to, innovation is good and helpful to managers, making clear that both are vitally important to building sustained profitable growth.

And if you aspire to be truly world-class at renovation, it has to be a clear corporate priority, continuously activated, supported, communicated, recognised and rewarded by the top team.

Seeing with new eyes

The problem with so much market research, or rather with our response to it, is that it often seems as though we have heard it all before.

I was working with a mixed group of managers from Nestlé, together with a gang of young consumers, endeavouring to find a new way forward for one of their pan-European chocolate brands. The problem seemed to be focused on the brand positioning and the advertising.

Early in the workshop, we sent them out in pairs (manager and consumer) to do some shopping together and to make notes of what they heard from each other. In the debrief, one of the managers said: “I knew that we had a problem with the communication strategy, but what my guy said just now was that he doesn’t really like the taste of our product.”

It turned out that this was a common piece of feedback from most other pairs.

“Why hasn’t market research been telling us this?” asked the international marketing director. “It has – in every study we’ve done,” responded the research manager. “We just decided it wasn’t that important.”

So every time they had heard it subsequently, they knew it could be ignored.

Hearing it with new ears, seeing it with new eyes, we were able to go with this “new” insight immediately to develop an improved, preferred recipe, which, together with a new communication strategy and new advertising, propelled the brand to double its sales across Europe within twelve months.

What the great French writer, Marcel Proust, said on this subject was: “The real voyage of discovery consists not in seeking new landscapes, but in having new eyes.”

Do you have special ways of doing this?