The Process of Innovation 3

In marketing and innovation, nothing is as important for developing new products than spending time with the consumer.  From 2007-2009, recession times caused me as a manager in my company to pioneer a brand renewal for a product line known in our region for over 50 years--Monks' Bread. 


Made by real Trappist monks who live a cloistered life literally, in order to navigate the difficult grocery environment, we innovated a "free bread giveaway" program at summer festivals and winter indoor vendor events to get "face time" with the customer.  

Our bread tent and booth became one of the most popular fixtures all over the region.  What we learned was about 50% of the 35,000 people who came through our booth during those years had never heard of the product, and of those who had, only 30-40% were regular buyers as defined by purchasing at least once per month.  

So here is what we learned about innovation by giving away bread over three years to get to know buyers and potential buyers of our product:

• The importance of spending face to face time with real customers gave us many new ideas for innovation of products and packaging that would be what the consumer wanted.  Their needs were very different than what we had assumed. 
• We discovered what the consumer what unsatisfied with when they walked down the bread aisle in the grocery store. This led us to keep asking "Why?" at our promo events.  Why do you buy the bread you do?  Why do you buy our bread?  Why do you buy where you buy?

Dealing With Idea Squashers

An acquaintance posted a piece from Darden/UVA about idea squashers. One of the most dangerous people in an organization are the naysayers who resist change, usually because they have failed at innovation and new products so are playing it safe.  When innovation gets stuck--persist!

How To Deal With Idea Squashers (Darden)

Meet the Real Mother Of Invention: Persistence! (Inc)

The Process Of Innovation 2

How Do I Find the Opportunity to Innovate?

In the recovery and counseling world, there is a saying about change: People do not change till the pain of remaining the same is greater the pain of changing. 

Even though a person may have unsatisfied needs, wants, and desires, they may settle for the status quo.  Innovation is all about making people come to the point where they absolutely have to change. 

Remember, people are looking for solutions to problems.  When a consumer buys your product or service, what they are paying for are solutions to something they are trying to accomplish.  Problem: I need to trim my hedges.  Solution?  Hedge clippers that can help an amateur look like a pro.  Why?  I need to have my yard looking better.  Why?  Because the last time my father-in-law was here he made a comment about how overgrown our bushes are and since his yard is always immaculate, I don't want him to think bad of me.  That is the real need!

If you are looking for opportunities to provide innovative solutions for your customers, you have to be always asking, "Why are our customers really buying our product or service?" 

If you want to get ideas how to know your customer better, I highly recommend you watch the show "Undercover Boss." A common theme on that show is how out of touch the front office is with the customer and their needs.  The more we do not know our customer, the more we miss the opportunity for innovation.  

Getting back to our opening statement, where are your customers feeling the pain to change?  How can you make the pain of staying the same greater than the pain of changing?  Price? Peer pressure?  The old model is so outdated that it can hardly be used anymore or you cannot get parts for it.  Wellness programs pressure people to be healthier at work to lower their employer health premiums, so workers are looking for healthy food to buy when they are shopping.

Those are the opportunities for innovation.

The Process of Innovation

Today I begin walking through steps I regularly travel to discover something different that will impact our customers.  I work in the food industry, and people's tastes are my pursuit.  We make one of the world's oldest staples--sliced bread.  We sell it in all the major supermarkets including Walmart in New York, PA, and New England.  We also produce specialty cakes, cookies, and artisan products for resellers and specialty stores.

As a regional producer, we do not have the global resources and scale of our competitors in the bread aisle of the supermarket. Yet, we have three products in the top 50, and are ranked #5 by IRI in branded bread product sales in Buffalo-Rochester--our primary market.  How do we do this?

Where Innovation Begins

1.  We stay close to our customers to know when to create a new status quo.

The relationship of people and food is interesting. In life, people generally resist change.  As children, our parents tried to get us to try something new, and we puckered our faces and spit out anything that was not what we already liked. 

Many people buy the same food every week at the grocery store, order the same Starbucks coffee every morning, and order the same dish when they eat out at one of their few favorite places.  

Yet, market signals do appear from time to time that the thinking and tastes of consumers do indeed change.  When an American society struggling with obesity discovered you could lose weight by not eating bread, we had a major market signal.  WHAT HAVE YOU INNOVATED FOR US?

Here is the catch--we need to know these changes are coming before they actually happen.  This is what authors Clayton Christensen and Scott Anthony term the "innovator's paradox."  When times are good and we have the time and capital to innovate, we often do not.  When times turn bad, it is too late to innovate. 

Although people started eating bread again after Atkins, the market is still signaling we will eat two kinds of bread--indulgence bread and healthy bread.  More and more customers tell us through their food spend "we want to eat healthy." 

The innovator needs to get out in front and innovate, telling their customers "we have heard you, and we know the way."  

TODAY'S LESSON:  Are you one step ahead of your customer?  Are your customers sending you signals that they need a change?  Do you have what they will need ready to go?

Next time:

2.  Identify the problem the customer needs you to solve for them.

Invention

“Invention:
I always wanted to invent something that would move around & make funny noises & would change the world as we know it & I forgot all about that until we had kids & now I see I came pretty close.”
― Brian Andreas

Will Obamacare Help or Hurt Innovation?

Today, I am going to try and catch up.  I have missed blogging because I am a CFO in my day job and it is annual board meeting time which has kept me busy for the past few weeks.  

First today, in the coming weeks I am going to delve into some mechanics of innovation.  By day, I work as CFO for a food producer.  The need to innovate in the grocery store aisle is intense right now, and over the past few years we have been honing our innovation process.  Over the next week I will sharing some of the things we have learned along the way.

No matter what side of the Obamacare debate you come down on, it is big news this week as The Supreme Court hears the arguments for the single payer mandate, commerce clause regulation, and whether the government in the future can make you buy a cell phone or broccoli! 


No matter how you slice it or dice it, we have a problem in American health care.  In our employer based system, many small entrepreneurial startups cannot lure in talent using the health care benefit because they cannot afford it.  This in turn stifles new business growth. 


In addition, the uninsured expect to be able to get health care at the hospital when they need it with no responsibility to pay.  Those costs are rolled into the fees charged the insured!  So, the argument goes, wanting privilege without responsibility needs to end by mandating that people get their own coverage.  This will increase the number of insured which helps health insurance companies. 


All of this sounds good, BUT.  What about the constitutional issues and the relationship between a government and its people, freedom, individual rights, and so forth?


I am not making this article partisan.  In my research, I found constitutionalists are writing much more on the issue of how Obamacare will effect innovation, so there are more articles here from that perspective.  I would appreciate it if anyone can provide more arguments for innovation from the pro-Obamacare point of view. 


No matter how this turns out, there is much room for innovation in the way we do health care in America. What do you think--will innovation be helped or hindered by Obamacare?

• Obamacare to Spend $1 Billion on Innovation (The New American)
• Obamacare's threat to medical breakthroughs (Orange County Register) 
•  Looking for Solutions in a Rapidly Changing Health Care Environment (Knowledge@Wharton)
• Taxing Medical Progress To Death (Michelle Malkin) 
• How Obamacare Is Putting Medical Innovation in the Hospital (AEI)
• Obamacare CER Institute Seen as Threat to Innovation (Heartland Institute)

Before we go today.. I love books of lists!  I loved this and hope you do too!

• The World's 50 Most Innovative Companies.  (Fast Company) 

Seth Godin on Bread and Innovation

In my day job, I am CFO of a parent company to a commercial bakery called Monks' Bread.  It is made by real monks.  Lots of people talk about Monks' Bread because it is a remarkable product.  It is not made by some global conglomerate, but by a community of Roman Catholic monks of the Trappist order at The Abbey of the Genesee.  I think a lot about innovation in the grocery store where our bread is sold, and the qualities we need in our team to be innovative.  Pulling all of these together is what this week's "Monday Startup" is about. 

Enjoy Seth's talk, and learn about innovative marketing!

• 40 Reasons Why We Struggle With Innovation (Innovation Excellence) 
• Seth Godin's Famous TED Talk on Sliced Bread--I put it up again five years later because I think his message got lost in the Great Recession, and because I am CFO for a sliced bread company--Monks' Bread.
• Redefining The Local Grocer (BusinessWeek)
• 20 Qualities of Innovators (The Heart of Innovation)

The Biggest Innovation Heist in History? Shanghaied!

Economic and industrial espionage has a long history.  Oddly enough, what is considered one of the earliest cases of industrial espionage was against China. In 1712, a Jesuit priest named Francois Xavier d'Entrecolles infiltrated Chinese manufacturers' system of making porcelain and then revealed it to European manufactures via a detailed letter. You can read all about it here.  Today, the tables are turned against us, and the traitors are our own people with a greed motive.

China is once again showing that the only business innovation they have a core competency is how to be thieves.  The Chinese economic espionage campaign has been in full operation mode  for years and "targets a swath of industries: biotechnology, telecommunications, and nanotechnology, as well as clean energy (Bloomberg).

Northrup Grumman's report to The U.S.-China Economic and Security Review Commission  details the extent of risk the USA currently faces.  "Death By China: Confronting The Dragon" is also a good treatment of the subject. 

So, this raises the issue of innovation.  What opportunities exist to develop counter-measures to the threats we face in a cybernomic war with China? Counter-security, and counter espionage are obviously ongoing.  What we need to develop more is technology security so that when the Chinese try to hack and steal trade secrets, the code or device they are working with erases, releases counter-code, and becomes non-functioning. 

We certainly do not want Iran or China sending more model airplanes to our Presidents mocking our requests to please not steal our innovations. 

Monday Startup: Stifled Innovation

I have worked with several organizations over the past 20 years that stifle innovation.  I aim to be a visionary leader.  For as long as I can remember I have been the one in a group who asks, "Why do we do what we do?  Why this way?  Why not another way?  Is there a better way?"  In order to create value for owners I have worked for, or accomplish the mission of non-profits I have led, I tend to see the big picture of where a strategy (or lack of one) is leading and then challenge the status quo.  

Right now, I am involved with two non-profits and both struggle with growth because of leaders who are unwilling to engage in creative destruction.  They are not willing to cannibalize their own outdated models and structures.  Both are doomed to die unless they change. 

 In many cases, I have seen two main reasons for this. 

First conservative agent/managers who do not want to rock the boat or fail in the eyes of their owners, thus they do not take risks which could add value to the owners in order to protect themselves instead.  Leadership that resists innovation and change out of fear and self protection develops a culture of non-innovation around them.  Other "yes men" who want to preserve their jobs do not have the courage (stones, balls, etc.) to challenge their bosses, thus group-think takes over. 

Second, ignorant decision makers who do not understand markets, market forces, or the competitive environment believe myths. I have observed owners who think consumers should buy their product or donate to their cause because they always have.  As long as there is money, people will want to see value associated with investment.  Risks must be taken to keep making things better whether profit in a business or a better world in the case of charities and non-profits.


Most often, organization and companies that resist change plateau and then experience a long slow decline.  Why do these change management issues occur?

•  Three Issues that Stifle Innovation, and How to Overcome Them (Innovation Coach) 
•  Is Your Culture Cryptonite for Innovators? (Innovate On Purpose)

• 7 Deadly Sins That Derail Innovation (The Globe and Mail)

   

Monday 3/5 Startup Cleveland Clinic Innovation

It's Monday.  Time to start up our thinking for another week ahead!

Last Friday, I spent the day at The Cleveland Clinic with a family friend whose wife was having vascular surgery. What an experience OF WELLNESS!  This is the hospital you want to be treated at.  

The excellence oozes everywhere.  Logic Junction's Wayfinder Touch Screen Avatar Kiosk was very helpful placed right on 2P at the entrance from the parking ramp.  Everyone who works there has clearly been trained to take care of people not only medically, but as ambassadors.  I had a nurse and a lab tech ask me if I needed directions when wandering around looking for which way to go to my destination.  We ate very healthy food in the building P lobby.  I wandered into an area where there was literature about their emphasis on 2012 medical innovations--I share them below. 

• Top 10 Cleveland Clinic Medical Innovations of 2012 (Cleveland Clinic)  Get the APP too! 
•  Cleveland Clinic extends innovation collaboration (Cleveland.com)
• Innovations in Surgery (Cleveland Clinic Center for Continuing Studies)  Also the educational webcasts are great innovative ways to educate people about their health!