Voices: the CMB Blog

Originally posted in the SMEI blog

At some point all business leaders are challenged to “innovate” in order to grow their company’s bottom line.

Done right, innovation creates value for both the company and the customer through new-to –the-world solutions to needs. It’s logical that products and services are where companies start their innovation efforts because, after all, these are very tangible sources of value. However, brand and marketing can also be powerful drivers of value and differentiation and should not be overlooked as potential anchors for innovation.Many innovation initiatives begin with a brainstorming session in which a bunch of internal folks sit around and try to generate new ideas for products or services they think customers want. For a fresh take on this process, consider “brand-storming” as the starting point for inspiration.

What is a “brand-storming” session, exactly? Well, in marketing speak, it’s generating innovative ideas for brand extensions, leveraging brand equity (a very valuable asset) to push into adjacent or even totally new product areas.

Start a successful brand-storm with  a clear articulation of your brand strategy, brand attributes and positioning. Then do creativity exercises that apply key brand attributes to new markets or to new solutions to existing customers.

Need to get the juices flowing? Look for examples in the marketplace:

• Consumer products are the easiest place to start. For example, consider Arm & Hammer Baking Soda’s extension to toothpaste (“clean” and “white”) or Duracell’s introduction of the PowerMat to recharge phones and other devices (e.g. “long lasting power”).

• Virgin is probably the poster child for brand-centered innovation, using its well-defined and unique positioning to extend into everything from airlines to cell phones.

All of this is not to say that brand should be the only source of invention. But brand-storming brings a new part of the company to the innovation table and adds another angle for sparking new, powerful ideas for growth. 

In our upcoming webinar we will look at some of the common pitfalls of innovation initiatives and explore how to use “brand” and “brand attributes” as well as innovative go-to-market strategies to unlock growth opportunities in new, unexpected directions. Hope to see you there!

Posted by J. Mark Carr, Mark is co-founder and managing partner of South Street Strategy Group.

You might not know it from the constant attention lavished on startups, but some of the most established and largest companies in the world are amongst the most innovative—they routinely out-innovate their smaller peers. Where they falter is in failing to bring these game-changers to the marketplace without diluting, complicating, or killing them.If you have doubts about what I just said, here are two of my favorite examples that illustrate the issue really well.

Ever wonder why despite inventing the concept of cellular phones and having a virtual monopoly on telephones, AT&T had to acquire McCaw Cellular Communications in 1993-94 for $11.5 billion? OR better, despite coming up with filmless photography in 1976 which dominates the world today (think of cellphone cameras, selfies, instagrams, Snapchat, Google Maps) Kodak today is a bankrupt company (the hyperlink is a great read by the way).

It’s not the lack of ideas that hurts large organizations the most. It’s not even the lack of awareness of implementation hurdles. It’s the inability to forge consensus, a constant focus on responding to immediate pressures and meeting short-term goals (both organizational goals and employee goals) and lack of sufficient communication across autonomous business units that play spoilsport. You could describe it as a lack of push to the “Strategic Intent”; a phrase popularized by the late C.K. Prahalad and Gary Hamel in 1989 (strategic intent is an ambitious and compelling dream that energizes, providing the emotional and intellectual energy for the journey to the future. It has 3 components: Direction, Discovery and Destiny). I call it a lack of push and not a lack of intent because these organizations have these 3 D's, at least on paper.

Being a strategy groupie, I've spent a lot of my time specifically focused on innovation (both because the sheer volume of content that's been published on the topic recently, and the nature of my current assignments), I’ve decided to put down some of my thoughts on paper starting with a short list of questions (by no means exhaustive) that will help people think holistically about innovation and avoid some of the pitfalls:

• Does your organization have innovation goals? What percentage of your organization’s revenue comes from breakthrough innovation, what percentage comes from incremental innovation and what percentage from existing products? How is success measured?

• How do we define problems the market faces? (Note that I consciously use the word” market” and not customer)

• How are target customers defined?

• How is the innovation execution process handled?

Innovation is hard. It takes a lot of effort and patience and failure can be costly and even catastrophic, but the upside can be rewarding beyond expectations. In the coming weeks, I will attempt to expand on each of these questions with examples and my views on why it has or has not worked for specific large companies.

Abe is a Senior Project Manager, strategy junkie, and CrossFit enthusiast. He's recently taken up snowboarding so watch out if you're headed to the slopes.

I recently came across an article focused on defunct exhibits at Disney parks. I’m a native Floridan so I flipped through the accompanying slide show with fond memories. And there it was...my all-time childhood favorite—Horizons at Epcot Center. From the robot butler to the holographic telephone, Horizons revealed a future full of promise, excitement, and funky monotone jumpsuits. 

It’s been 30 years, the future is now the present, and I don’t have a robot butler. Disappointing yes, but on the other hand, we do have the Roomba and I will argue Apple’s FaceTime is likely better than a hologram. So I think we can agree many companies have made serious innovations in the last few decades—they’ve understood that incremental change means incremental growth, and they’ve pushed the limits. Although product development is critical for companies to compete and grow, it also carries high risks, because it represents a big investment into new and unfamiliar territory—it’s crucial to get it right.

While we aren’t all Imagineers, there are strategies for new product and service development that have proven successful in a rapidly changing market—these strategies form the basis of our Best Practices in New Product Development. Two of these Best Practices are below:

1. Use advanced techniques that emulate real world trade-offs: In real life, people don’t evaluate the importance of individual features or attributes. They make choices between/among products. The more closely research emulates this process, the more accurate the findings will be. What people say they prefer, and what they actually choose, are often not the same thing. That’s why we use trade-off techniques (e.g., discrete choice) that let us derive the most important and relevant preferences as well as sophisticated data mining techniques that help us to create more accurate predictive models.

2. Build flexibility into the research: If you’re using trade-off techniques, channel Walt Disney himself (“if we can dream it, we can do it”) by including features that fall outside of current capabilities. This lets you mimic the current market and simulate a future market where these feature become available. So while you might not be ready to “do it,” if you’ve dreamed it, you can test it! That’s why, when appropriate, we build a user-friendly simulator. These simulators allow design decision-makers to run “what if” scenarios, providing additional insight when changes occur (e.g., a competitor responds with a new product, prices change, or when the technology to realize your stretch features catches up with your dreams).

We can’t promise your product development research will live as long as Horizons (16 magic filled years) but we can help ensure it’s useful for both the short and longer-term (at least until we all get our robot butlers). Check out the video below to learn how we help our make sure their new product development efforts are a success:

CMB New Product and Service Development from CMBinfo on Vimeo.

Athena is a Project Director at CMB, she looks awesome in a jumpsuit and is patiently waiting for her favorite Disney character, Donald Duck, to make a comeback.

Originally posted on the South Street Strategy Group Blog

Kristin Vincent, VP, Product at Marvel Entertainment, has been helping the 70-year old company re-define itself in the digital age. Not knowing much about comics when she joined the company in 2011, she quickly gained credibility and influence with her fresh perspective, insights and actions related to the company’s “Re-Evolution” digital strategy, which officially launched in March 2012.At a recent conference, she shared the principles Marvel has used to evolve its comics business so that fans continue to love their experience with comics, while traditional print and new digital formats and channels co-exist and thrive at the same time:

1. Proclaim your intentions – Declare what you want to do and communicate this publicly. This not only creates anticipation and excitement, but it builds internal commitment and accountability.

2. Develop new products with connections to existing products – This approach helps to minimize cannibalization, reassures existing customers and channel partners, and adds excitement to established products. Marvel gave everyone who bought a print comic a free digital version, and created an augmented reality application to be used with the print version to get additional behind-the-scenes information.

3. Challenge the most basic assumptions you have about your products – For Marvel, this meant re-thinking what a comic is, beyond traditional attributes such as paper booklets, panels, and pages, to seeing it as serialized graphic storytelling with excellent graphics, opening up new “Infinite” comic possibilities that rethink what a comic page means

4. Partner with users – Marvel used listening labs and usability testing to understand how fans experience comics. It brought fans in and used flip video cameras to record them in real world scenarios using comics and computers to understand pain points. Marvel also got fans to register to become Marvel Advisors to test products and provide input to their development pre-launch. Kristin says that as soon as the executive team watched a one-hour video highlighting all of the user issues and opportunities, it made a huge difference in helping to change the culture and continuing the effort to innovate

5. Develop a roadmap that starts small and builds – Marvel started with one comic in a plastic polybag with a code inside for the digital download. Now users get a free digital download with all $3.99 comics in print

6. Balance user requests with bold new ideas – Marvel re-launched Marvel Unlimited (a subscription program that gives users unlimited access to over 13,000 digital comics) but also sourced and introduced “Project Gamma,” an innovative new adaptive audio technology. It will be a cool new way to experience digital comics where the sound will change as you move through the story.

7. Fail fast and pivot – Marvel had to take a promotion down on the first day when demand for free downloads was so great that the third-party servers it was using crashed and fans couldn’t buy digital versions for two days. They corrected course and used this failure as an opportunity to show customers they cared by being honest and transparent.

8. Re-evolve –Marvel enhanced its print products with digital, and is using new formats.

In 2012, the innovations helped Marvel achieve triple digit growth in its digital business while keeping its core B2B brick-and-mortar store channel partners happy. The digital and print products complement each other, satisfying existing fans while opening up a whole new fan and user base.

Jennifer is a Director at  South Street Strategy Group. She recently received the 2013 “Member of the Year” award by the Association for Strategic Planning (ASP), the preeminent professional association for those engaged in strategic thinking, planning and action.

South Street Strategy Group, an independent sister company of Chadwick Martin Bailey, integrates the best of strategy consulting and marketing science to develop better growth and value delivery strategies. Read South Street's Strategy Group's blog here.

Just over a year ago, leading toy maker the LEGO Group launched its new line of blocks and figures for girls called LEGO Friends in key global markets in the Americas, Europe, and Asia. It is one of the most successful launches in the company’s history and has already generated twice as much business as expected.The story of Friends started long before the 2012 launch, and deserves a full-length case study; for now I’m excited to share a little of what I learned from meeting and listening to Laura Post, Senior Director, Strategic Planning and Insights, for LEGO in the U.S., when she talked about LEGO Friends at the IE Group’s Women in Strategy Summit in New York City a few months ago.

Laura attributed much of the success of the launch to a shift to a customer co-creation approach, and a willingness to really observe and listen to customers and to engage them in co-design of the products. The LEGO Group had tried for over two decades to expand its appeal with girls with little success. Barriers included lack of company focus and support, core products geared to boys ages 5-9, and products designed with strict adherence to internal ‘sacred cow’ beliefs about what mini figures should be and look like. LEGO was also in serious turnaround mode in 2003-2004 after straying too far from its core.

One of the things that LEGO executives realized needed to change was that employees needed to be empowered to make customer-focused decisions. Consumer insights are now core to LEGO’s strategy. As evidence of this shift, according to Laura, the company spent four years and conducted 13 major studies researching customer needs and wants related to Friends. It directly tested products with 3,500 girls and moms, and once a month, girls were brought in to co-create products with LEGO’s designers and researchers.

It was through this focused effort and investment that LEGO learned that the majority of young girls around the world prefer to play with building toys and figures that look very realistic, have vivid colors (especially pink and purple), and that have different personalities that increase the emotional connection. The traditional old mini figures with generic facial expressions just wouldn’t do. As a result, LEGO invented the Friends mini-dolls, each with their own names, interests, and favorite things and places (see Olivia and her invention workshop graphic).

This co-creation story is only one example of what the LEGO Group is doing in this space. There are many, many more examples of how co-creation is changing business for the better. As a big fan of the co-creation approach, I hope to tell more stories on the use of this customer centric methodology at Lego and elsewhere. Watch this space.

Jennifer is a Director at  South Street Strategy Group. She recently received the 2013 “Member of the Year” award by the Association for Strategic Planning (ASP), the preeminent professional association for those engaged in strategic thinking, planning and action.

South Street Strategy Group, an independent sister company of Chadwick Martin Bailey, integrates the best of strategy consulting and marketing science to develop better growth and value delivery strategies. 

Join Tauck's Jeremy Palmer, CMB's Judy Melanson and South Street Strategy Group's Mark Carr on September 12th at noon for a webinar: Focused Innovation: Creating New Value for a Legacy Brand Focused Innovation: Creating New Value for a Legacy Brand