innovation: shaping the futureamai.org/congreso/2007/memorias/ponencias/davidnichols.pdf ·...

Innovation:Shaping the future

David NicholsManaging Partner, The Brandgym

Introducing myselfRole: Managing PartnerExperience: Aerospace Engineering, 1st Class Hons – Bristol

OC&C Strategy Consultants (‘92)

Added Value Marketing Consultancy (’94 – ‘05)

Expertise: Brand Vision, Brand-led Innovation

Books:

Hobbies: Qualified aerobatic pilot

Written & produced 3 musicals off West End

Sings swing in hotel bars

Some of my clients…

Innovation: Shaping the Future

• Innovation – current theory & practice

• Why innovation is not delivering

• A little experiment…

• Rocketing – a new process for innovation

• Six innovation success factors

Innovation is it

“The engine of real economic growth is not technology but innovation”Hector Ruiz, CEO, Advanced Micro Devices

“The only source of profit, the only reason to invest in companies in the future is their ability to innovate and their ability to differentiate”Jeffrey Immett, CEO of GE

“The only way to predict the future is to shape it”Eric Hoffer, American Writer (Later retold by Xerox CEO)

Innovation isn’t delivering…

1 in 2 innovations fail

…or is that 8 out of 10

…or maybe 90%

Not a pretty picture

…despite increased focus & resources

Current Innovation approach:

The Theory:

The Practice:

Meeting unmet needs

Innovation Funnels• Stage-Gate systems

The Theory: Meeting Unmet Needs

Consumer research =

unmet needs

Consumer research =

unmet needs

Design products to meet needs

Design products to meet needs

LaunchLaunch

Feedback

Yes!

Only in fairytales

The Theory: Meeting Unmet Needs

• Needs are hyper-satisfied Intense competition

“Insanely great”• Delivering against needs is not enough

Constant change+

‘Mass niche’• Consumers can’t tell you

anymore

The Practice: Innovation Funnel

Ideas Feasibility Capability Launch

Raw Ideas Winner

‘Stage-gates’ to kill off poorly performing ideas

The Idea Killing Machine

Why do funnels stifle innovation?

1. Focus on picking winners, not creating winners

2. ‘Gate’ admin is at the heart, not ideas

3. Makes it longer & more expensive

4. Assumes good ideas are easy to come by

5. Promotes ‘not invented here’syndrome

6. Senior expertise focused on evaluation not improvement

Why do funnels stifle innovation?

1. Focus on picking winners, not creating winners

2. ‘Gate’ admin is at the heart, not ideas

3. Makes it longer & more expensive

4. Assumes good ideas are easy to come by

5. Promotes ‘not invented here’syndrome

6. Senior expertise focused on evaluation not improvement

admin

Why do funnels stifle innovation?

1. Focus on picking winners, not creating winners

2. ‘Gate’ admin is at the heart, not ideas

3. Makes it longer & more expensive

4. Assumes good ideas are easy to come by

5. Promotes ‘not invented here’syndrome

6. Senior expertise focused on evaluation not improvement

Why do funnels stifle innovation?

1. Focus on picking winners, not creating winners

2. ‘Gate’ admin is at the heart, not ideas

3. Makes it longer & more expensive

4. Assumes good ideas are easy to come by

5. Promotes ‘not invented here’syndrome

6. Senior expertise focused on evaluation not improvement

Why do funnels stifle innovation?

1. Focus on picking winners, not creating winners

2. ‘Gate’ admin is at the heart, not ideas

3. Makes it longer & more expensive

4. Assumes good ideas are easy to come by

5. Promotes ‘not invented here’syndrome

6. Senior expertise focused on evaluation not improvement

Why do funnels stifle innovation?

1. Focus on picking winners, not creating winners

2. ‘Gate’ admin is at the heart, not ideas

3. Makes it longer & more expensive

4. Assumes good ideas are easy to come by

5. Promotes ‘not invented here’syndrome

6. Senior expertise focused on evaluation not improvement

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

More than 75% 75-50% 50-25% None

How many innovation projects fail?

Wow!

Marketing Directors see the problem…

Proportion of innovation projects that fail

% of Marketing Directors agreeing

Source: Brandgym research among marketing directors

…but research can be part of the problem

Like a drunk with a lamppost…

Research gets used for support, instead of illumination

So what is the solution?

Rocketing

A new process to get more bangfrom your innovation buck

A little experiment!

Rocketing Principles

Destination

Start with a clear vision

Combustion

Generate lots of high quality ideas

Nozzle

Quickly get down to the best ideas

Expander

Build best ideas into winning mixes

The detail is in my new book…

Six innovation success factors

1. Set a clear destination

2. Break the rules, not the brand

3. Get potent insight fuel

4. Bring ideas to life

5. Set ‘drop dead’-lines

6. Fail fast, fail cheap

Six innovation success factors

1. Set a clear destination

2. Break the rules, not the brand

3. Get potent insight fuel

4. Bring ideas to life

5. Set ‘drop dead’-lines

6. Fail fast, fail cheap

Set a clear BRAND destination

What is your product DNA?

What are you famous for?

What do you want to be

famous for?

NegotiableNegotiable Non-NegotiableNon-Negotiable

1. Set a clear destination

Quick exercise…

NegotiableNegotiable

Non-NegotiableNon-Negotiable

1. Set a clear destination

FastStylish2 seats

Sports car

2 seatsSports car

What about the Cayenne?

…hot extension or don’t mention?

1. Set a clear destination

Porsche results – cars sold

USA USA1 month ’07 ’05/’06

911 36% 35%Boxster 19%Cayman 13%Cayenne

Total 891 95,342

USA USA1 month ’07 ’05/’06

911 36% 35%Boxster 19%Cayman 13%Cayenne

Total 891 95,342

32% 36%

1. Set a clear destination

Bleedin’ Obvious Innovation Brief

Company: Parity Products Inc.

Brand: MeToo™

Context: MeToo™ is an exciting brand in the mid-quality, mid-price sector. Growth has been stable and consistent with the category in that it has been flat for two years. Premium brandsare demonstrating growth can be achieved through innovation, so we want to join in.

Brand Objective: Growth (in sales and volume)

Task: An innovation

Target: Consumers who shop the category

Competition: Other brands. And own label

Timing: Next year

Bleedin’ Obvious Innovation Brief

Company: Parity Products Inc.

Brand: MeToo™

Context: MeToo™ is an exciting brand in the mid-quality, mid-price sector. Growth has been stable and consistent with the category in that it has been flat for two years. Premium brandsare demonstrating growth can be achieved through innovation, so we want to join in.

Brand Objective: Growth (in sales and volume)

Task: An innovation

Target: Consumers who shop the category

Competition: Other brands. And own label

Timing: Next year

You need a killer brief, not a B.O.I.B.1. Set a clear destination

The Calippo innovation brief

Vision: Get teens to buy Calippo

Business source: Steal from soft drinks

Vision: Get teens to buy Calippo

Business source: Steal from soft drinks

1. Set a clear destination

?

Even impossible briefs can work…

Steal share from Coke

Make ice:- Drinkable- Reclosable

• Outsold ice cream x3• Steals directly from soft drinks• Rolled out round world

1. Set a clear destination

Six innovation success factors

1. Set a clear destination

2. Break the rules, not the brand

3. Get potent insight fuel

4. Bring ideas to life

5. Set ‘drop dead’-lines

6. Fail fast, fail cheap

Admit it.

Base: Sufferers from Constipation (past 12 months)

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unit: %

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manyBrazilUSABase: Sufferers from Constipation (past 12 months)

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unit: %

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6921241217Vomiting

13914187722Bloating

128313101332Nausea

101382282629Abdominal cramping and pain

9141522172840Heartburn

34651181539Flatulence/gases

29293047496060Headaches

17881451718Constipation

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manyBrazilUSA

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unit: %

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17881451718Constipation

South KoreaUKItalyFranceGer-

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Segmentation is dull.

Existing market spaceUnclear offer

Segment for tomorrow, not today

Good productQuick death

Good product

Clear & unique brand-led offer

Better survival

New segment

2. Break the rules

Segmentation: Break the category rules

Moisturiser = self tan

2. Break the rules

Banking = politicsDesign > Function

Six innovation success factors

1. Set a clear destination

2. Break the rules, not the brand

3. Get potent insight fuel

4. Bring ideas to life

5. Set ‘drop dead’-lines

6. Fail fast, fail cheap

Turn data into fuel

Breakfast

Mid-morning

Lunchbox

AfternoonSportsEveningKids

TeensYoung womenYoung Men

35-55

55+

3. Get potent insight fuel

Data Fuel

Use different sources of insight• Research amongst

core target

• Focus groups, quant studies

• Leverage existing knowledge

Real innovation or cannibalisation?

• Research among fringe groups, new targets…

• Observation, semiotics, talking to experts…

• Leverage knowledge from outside your part of the business

New ground

3. Get potent insight fuel

Use different sources of insight3. Get potent insight fuel

Prostitutes

Where did Kotex go to get their important new insight into menstruation?

360° Insight Checklist

360° Insight Sources

Competences

Retail Visits

Emerging Passions

Observation

Fringe Consumers

Semiotics

Competitive Landscaping

Experts

Trends

R&D Treasure Hunt

Global Category Trawl

Copy & Roll Out

Qualitative Research

Quantitative Research

3. Get potent insight fuel

…push yourself to find FUEL

Six innovation success factors

1. Set a clear destination

2. Break the rules, not the brand

3. Get potent insight fuel

4. Bring ideas to life

5. Set ‘drop dead’-lines

6. Fail fast, fail cheap

Initial ideaWeek 1

Mix early

Concept sketchWeek 2

Pack & AdceptWeek 4

• Real reactions• Sparks improvements• Raises hidden issues

4. Bring ideas to life

Don’t explore just concepts…

Brand X

Now a unique new blah blah blah blah blah blah blah blah blah blah

blah blah blah blah blah blah

Yada yada yada

Brand X

Now a unique new blah blah blah blah blah blah blah blah blah blah

blah blah blah blah blah blah

Yada yada yada

Brand X

Now a unique new blah blah blah blah blah blah blah blah blah blah blah. With subtly different blah.

Yada yada yada

Brand X

Now a unique new blah blah blah blah blah blah blah blah blah blah blah. With subtly different blah.

Yada yada yada

4. Bring ideas to life

Explore mixes…4. Bring ideas to life

Be distinctive in ALL parts of the mix

PACK• Stand-out• In-use benefits• Cue product story

PROMISE• Benefit claim • With support

PRODUCT• Visibly different to cue benefit• In-use difference

BeDistinct

SECONDARY PACK• Stand-out• Transport & storage

benefits

PLACE• Secondary sites in-store• New channels• ‘Get noticed’ distribution

PROMOTION• Use different media• Use old media differently

PIMPING• Be seen in the

right hands, in the right places

4. Bring ideas to life

Be distinctive in ALL parts of the mix

BeDistinct

PACK• Stand-out• In-use benefits• Cue product story

4. Bring ideas to life

Be distinctive in ALL parts of the mix

BeDistinct

SECONDARY PACK• Stand-out• Transport & storage

benefits

4. Bring ideas to life

Be distinctive in ALL parts of the mix

BeDistinct

PRODUCT• Visibly different to cue benefit• In-use difference

4. Bring ideas to life

Be distinctive in ALL parts of the mix

BeDistinct

PLACE• Secondary sites in-store• New channels• ‘Get noticed’ distribution

4. Bring ideas to life

Be distinctive in ALL parts of the mix

BeDistinct

PROMISE• Benefit claim • With support

4. Bring ideas to life

Be distinctive in ALL parts of the mix

BeDistinct

PROMOTION• Use different media• Use old media differently

4. Bring ideas to life

Be distinctive in ALL parts of the mix

BeDistinct

PIMPING• Be seen in the right

hands, in the right places

4. Bring ideas to life

Six innovation success factors

1. Set a clear destination

2. Break the rules, not the brand

3. Get potent insight fuel

4. Bring ideas to life

5. Set ‘drop dead’-lines

6. Fail fast, fail cheap

Set ‘drop dead’-lines

Apple’s secret weapon:

Macworld ExpoSteve Jobs publicly commits to new product launches

5. Set drop-dead lines

Set ‘drop dead’-lines

Q1 2009(or later if there is any hold up in the

process) Mars promises to re-invent chocolate on 1st July

Today: Tomorrow:

5. Set drop-dead lines

Dragon’s Den = innovation review5. Set drop-dead lines

• Don’t just stand there…perform!

• Really bring your idea to life

• Simple robust business case

Implications for research

Faster turnarounds(days, not weeks)

Six innovation success factors

1. Set a clear destination

2. Break the rules, not the brand

3. Get potent insight fuel

4. Bring ideas to life

5. Set ‘drop dead’-lines

6. Fail fast, fail cheap

Q: How does an animal do a test market?6. Fail fast, fail cheap

A: He does it for real

Firesticks was the clear winner, rest failed

• The others de-listed within 6 months

• TV advertising was put behind Firesticks only

6. Fail fast, fail cheap

Saved 12 months and $2m

Do more creation than evaluation

Time spent during

innovation:

Creation:

Evaluation:

20%

80%

“Moins de tests, plus de testicules”French Creative Director

Up to 30 evaluation ‘gates’ for each innovation project

6. Fail fast, fail cheap

Implications for research

Build more realityinto your testing

methods

Design cheapertesting methods

6. Fail fast, fail cheap

Six innovation success factors

1. Set a clear destination

2. Break the rules, not the brand

3. Get potent insight fuel

4. Bring ideas to life

5. Set ‘drop dead’-lines

6. Fail fast, fail cheap

Thankyou.

Innovation is, in fact,Rocket science…