Innovation needs less logic, and more magic
Great article in this month's Market Leader by John Kearon, on how the rise of "marketing science" has hurt rather than help innovation in big companies. He highlights the lack of new category creation by these big companies. Their logical, sophisticated, rigorous and data-based systems have helped them farm existing brands in established categories, but not create whole new categories. The innovators that create new category brands tend to be in smaller start-ups: think Red Bull, Amazon, eBay, Facebook.
He also suggests that the sophisticated, global "innovation centres" set up by Unilever and other leading companies have not delivered as much as expected: "The logic of taking your best people, focusing serious resources and centralising the efforts within an innovation centre, is hard to argue with. The only problem is that for almost 20 years it has patently failed to help Unilever originate the sort of new category brands that deliver the majority of the company's profits." Ow.
So, what can leaders do to create true category innovation? I propose we need more magic, and less logic.
1. Remember, research is a rear-view mirror
John reminds us that research, like a rear-view mirror in a car, can only tell you where you've come from, not where you're going (a bit funny coming from a guy who runs a quantiative research firm, Brainjuicer!). He says "Trying to research new category ideas is pretty near impossible since people are notoriously bad at predicting whether they will adopt new behaviours." He goes on to quote examples of successful innovations that bombed in initial research, including the Sony Walkman, Bailey's Irish Cream, Post-Its, Perrier (in the UK), Red Bull and Cashpoint machines." Many big companies over-rely on research to both identify and test new innovation ideas.
2. Prototype as soon as possible
What John doesn't mention is that the inventor of the Post-It, Art Fry (left), did get useful consumer feedback on his new idea. It bombed in focus groups when tested as a written concept ("Anyone want a bit of paper you can stick and re-stick?"). What worked better was prototyping the product and giving it to secretaries at 3M. They loved them. So, with a new product you're better off doing less concept testing and more prototyping.
3. Follow your product passion
Look at most stories of breakthrough innovation and you find an inventor with a passion for a product idea. And these ideas don't tend to come from a logical, sequential process starting with analysis of consumer needs and followed by idea generation.
4. Bring back local innovation?
John points the finger of blame for Unilever's lack of category innovation at global innovation centres, saying "All Unilever's new category brands (e.g. Cif, Viennetta, Dove and Axe) were invented before its much-lauded and copied move to innovation centres in the 1990s."
This is a really, really interesting point. In my experience, global innovation centres do a lot of great work. For example, the global roll-out of Dove's Campaign for Real Beauty, Omo's Dirt is Good campaign and the Axe Effect work. However, when you look at many succesful category innovations they have indeed started in one market. John rightly points out that "Magnum, Impulse and Lynx, were launched in the 1980s when Unilever was a highly decentralised, federal organisation where marketers had a great deal of autonomy".
In these cases a local dude came up with an idea and tried it out quickly, learning in the marketplace. They didn't have to fight their way through round after round of "stage-gate testing, perfecty illustrated by cartoon genius Tom Fishburne below. Also, as the ideas were local ideas, there was much less pressure on it to needing to be a blockbuster success that justified global investment.
Is it time to re-ignite local innovation, dis-band the global innovation centres, and have smaller global teams in charge of innovation expansion? These centres would work more like venture capital funds, searching the world for great new ideas, and funding their international expansion. Or is this just wishful thinking in today's global world?
In conclusion, to create new category brands we need less logic, cutting the complex quant pre-testing models. What we need is more magic, with people free to follow their intuition and product passion. And it could be time for companies to look at reigniting local innovation… more on that later.