What major brands really think about innovation30 October, 2014 / Articles
Innovation isn’t as sexy and mysterious as these myths would have us believe.
In today’s innovate or die business climate, how can brands harness the power of new ideas and creativity to make an impact on the bottom line? To find out, we talked to a number of brand executives from large companies like L’Oreal and IBM as well as smaller ones like Yotel and Pret a Manger.
One of most striking things that quickly became apparent is how much noise and confusion surrounds the topic of innovation. It’s an exciting discipline but one that attracts a lot of contradictory ideas and perceptions. Here are five myths these brands helped us bust:
1. Innovation Is Only About New Products
Only one third of professionals we surveyed define innovation as large, infrequent new products, services, or changes to the brand. Innovation means more than just “game changing” new product launches.
At IBM Europe, innovation leader Charlotte Newton distinguishes between “invention,” which might come from an R&D department, and “innovation,” which delivers value by deploying new ideas or existing ideas within a new context. Innovation is only innovation when it results in meaningful change and delivers value to the customer.
Indeed, often the highest return on investment for innovation comes from continuous improvements on existing products or services. Gorkem Gulan, merchandising and product manager at Nike, shared one example of this kind of ongoing innovation: the Pegasus running shoe. The style has seen over 30 different iterations–-every year a new version with new features and performance attributes is released. The result? It’s been Nike’s most popular running sneaker over the last 30 years.
2. Structure Kills Innovation
Despite the compelling vision that innovation happens in moments of genius while you’re lying on beanbags in an open-plan office, the majority of the companies we spoke to apply a clear structure and process to the discipline. “You need the structure to go from a small and passionate team to showcasing [an idea] to the CTO,” said Jonathan Gabbai, Head of International Mobile Products for Ebay, which holds an annual internal Innovation Expo to showcase ideas from across the business.
Almost always the innovation strategy is defined by senior management. At Pret A Manger, a long term strategic vision and structure sets the annual operating objective and supports several innovation initiatives. “Within this we are constantly looking to innovate against our long term core proposition of freshly prepared, good natural food attracting time poor customers who value quality and convenience,” said Mark Palmer, Group Marketing Director at Pret A Manger. Growing the breakfast trade, for instance, was a strategy defined from the top. It was under this strategic direction that the team launched oatmeal six years ago–a smash hit. Innovation can flourish, then, within a defined structure.
3. The Best Ideas Come From The Lone Creative Genius
While creative geniuses can certainly exist, brand executives agree that innovation is best done as a team. In order to harness the power of the group, you need to create relationships and trust between those involved. When it comes to new ideas at Pret a Manger, teams are rewarded rather than individuals. This creates a sense of joint ownership and fosters a collaborative team culture.
At Nike, innovation is a team sport. As Nike’s Gulan said, “The striker doesn’t want to save a penalty. They focus their energy on scoring and trust the others to perform their role.” That means that everyone has clearly defined roles, and each does their best within their function to take their product to the next level.
How can you really build relationships in a global organization? In an age of flexible working and videoconferencing, Nike still encourages face-to-face collaboration. Every three months, teams from both global and regional territories, from vice presidents to account executives, meet in person to explore all the new product ideas and discuss how to bring them to market.
4. Innovation Comes From Within
As IBM’s Charlotte Newton noted, one of the most fertile sources of innovation can come from within the organization. However many professionals we interviewed acknowledged the limitations of relying on new ideas to come internally.
“We see what we want to see; external voices combat this,” said Antonio Hidalgo, head of strategy and innovation for Philips Consumer Lifestyle. Hidalgo has been driving the change at Philips to seek inspiration from external partners. Sixty percent of key innovations at Philips now are developed in collaboration with external partners, compared with 20% four years ago.
External partners can help take an idea from initial concept to reality. Christiaan Pinder, senior product manager at Aviva, a multinational insurance company, spoke of how his team collaborated with Barclays to build a new product. In the ideation stage, Barclays challenged Aviva to physically build customer journeys that customers could interact with before it went to market. This process allowed them to involve customers throughout the concept development process, enabling Aviva’s team to make important tweaks and execute a superior product. Barclay’s challenge helped enhance Aviva’s innovation.
5. Knowledge Is King
We love what IBM’s Newton told us: “Knowledge is like cholesterol. It’s vital for survival but too much of it can block the organization’s arteries.”
Jeremy Ellis, marketing and digital director at TUI Travel, acknowledged that a significant barrier to innovation can come from too much knowledge: having stakeholders who have seen every idea fail before, and are therefore cynical about the notion that an idea may provide a different outcome. “You need to demonstrate through customer feedback how it will be different, and then find a way of launching it in a cost effective way. If a hotel concept takes 12 months from inception to appearance, and a further 12 months until it has customers in it, you make big bets on the market two years hence.” Knowledge is power, but not when it hampers execution.
So, after speaking to all these brands, what’s the bottom line?
Innovation isn’t as sexy as people make it sound. Creativity plays an essential role, but it’s often a methodical process, with a lot of project management, lobbying, and most of all, persistence.