1. Week In Preview
W b and
e Mobl e Id
i eati on, D
rectv.com
i 04-24-12
The Game-
Changer
Book Review
2. This book in a nutshell
Author
A.G. Lafley (ex-CEO of P&G)
Mission
Create an organization of sustainable innovation to drive and
sustain organic revenue growth
15. Reasons for innovation failure:
1) Disruptive vs. incremental innovation projects
2) Customer is boss becomes lost
3) Upper management interferes
4) Not identifying most important killer issues early
5) Poor connection of the innovation project with
revenue goals
17. Minimizing risk for innovation
failure:
1. Know your customer
2. Do prototyping
3. Do rigorous consumer testing
4. Manage the portfolio of innovation projects
5. Be open to experimenting
6. Identify the killer issues early
20. “A brand is a product that creates an experience
and ultimately a relationship.”
“Be agile and not only adapt to change
but also cause change.”
“To introduce or invent products that customers
come to love requires anticipating their needs, not
just giving them what they ask for.”
Background: In june of 2000 when A.G. Lafley become CEO of P&G, stock prices were dropping and P&G had become a staid giant that was clinging to old brands which weren’t performing as well anymore.This book is about integrating innovation into everything a company does. It also draws several examples on how other large successful organizations such as GE, Honeywell, Lego, and Nokia used innovation to expand sales and profits.
…five takeaways for laying the foundations for innovation.
The first rule of thumb is: Treat the customer as boss.-P&G is very serious about putting the customer at the center of everything they do. One unit even made a life-sized cardboard cutout of consumer, named her, and brought her to every meeting to always keep her in mind. To cut through debates, they would look to the cardboard and ask “what would joanne think?”*kind of extreme but really shows you P&G's user centric approach
Here are customers being treated as the boss or royalty. The thought bubbles illustrate that people’s desires are often too complex for them to express and it is the company’s mission to figure out how to articulate and draw out these unspoken needs.
For this reason, P&G has adopted and engaged in total immersion by establishing Two programs: Living It: employees live with families for weeks to observe how they use products. Working It: puts employees to work in small shops so they can see what people buy or don’t buy and find out why. Downy Example: In the early 2000s, mexican market share of downy fabric softner was low and stagnant. P&G sent employees to live with lower income families in Mexico City to identify what the gap was. They learned that mexican women take laundry very very seriously because they cannot afford to buy new clothes so having clean ironed clothing was a sign of being a good mother. They also learned that the softening process is really demanding and takes more time than the rest of their housework combined. Manual six step process: wash, rinse, rinse, add softener, rinse rinse. Also, this required a lot of water for the multiple steps which was bad since water is scarce and very hard to get a hold of. Having identified the root problems, P&G came up with the solution of Downy Single Rinse which reduced the 6 step process to 3 (Wash, add softener, rinse) and saved an enormous amount of time, water, and effort and resulted in the product flying off the shelves.**A close example that we can do here at DIRECTV are the ride alongs that Carl signed us up for where we would get firsthand experience of the issues that customers are facing in the environment that they are use to.*Total immersion leads to richer consumer insights which helps identify innovation opportunities that are missed by traditional research. i.e. focus groups*Enables employees to connect with consumers they serve on a human level and gain an appreciation of the customer’s complete lives which are so different from their own.
…and this undoubtedly leads to creating a product that customers come to love because every location is different and requires an open mind and fresh thinking about the product. Total immerision allows for a better ear for listening to and Keener eye for observing local tastes values habits and culture. It is about being close to the market and realizing the diversity of the market and then innovating very close to the market
To go further and create loyalty, another important element is to enlist customers in co-creating and co-designing innovations. LEGO has applied this effectively by having their loyal customer base and enthusiasts work side by side with LEGO employees in testing the product, cocreating the product, and designing custom versions. By the time some of their products were released, more than a hundred users had been involved so that really helped to spread hype and buy in and get to the heart of the customer.Belly to Belly Innovation: where the company goes directly to sales reps who interact with customers on a daily basis for more consumer insights. Best Buy employed this by also training their sales reps on how to elicit and observe true consumer needs, expectations, and ideas since they interact with them on a daily basis.
The second learning that A.G. had was using design to differentiate a product and ultimately improve the buyer’s experience. He had learned this during his 4 years spent in Japan when he observed a society where even department stores were beautiful and where not only product design was important, but also the exquisite packaging and most importantly, the design of everyday experiences.
This means that design becomes a catalyst for moving a business from being technology or product centered to one that is more consumer-experience centered. From a consumer’s point of view, design is more about function but also about emotion and experience.
Most design thinking approaches in business school tend to focus on inductive or deductive thinking which is based on directly observable facts or logic based on past evidence. The new design thinking approach that P&G instills is abductive thinking where they encourage employees to imagine what could be possible which allows for challenging assumed contraints and adding to ideas rather than discouraging them.
The next learning is being able to identify and recognize innovation risk.
*Two types of innovation. Disruptive: changes the game by creating entirely new consumption, making obsolete or transforming current markets. Incremental: adds value to the customer (new benefits new versions new sizes) and happens more frequently. Since incremental innovation requires different skills and attitudes than disruptive innovation, a mismatch will stall a project.2. from prototyping of the idea through commercialization and all too often a concept moves from idea to functioning prototype with a technical focus rather than a user-centric focus.3. with team functioning behind the scenes or refuses to collaborate when expert resources are needed to make the breakthrough necessary to move forward.4. Sinking fortunes into projects without addressing the killer issues early in the innovation process that must be solved to bring product to market
1. Is a way to spot mistakes earlier.2. And do it often and early in the process4. So there is the right balance of disruptive and incremental innovation, short term and long term projects, and low-risk and high-risk projects.5. P&G has an off-site laboratory “Innovation Gym” to give intense attention to a specific idea, allowing people to test ideas out before taking it further. There is a skilled facilitator on site that guides them through the innovation process and consumers are brought in to look at prototypes and concepts to give groups instant feedback. *Being in a different environment can help loosen people up since if you ideate in the same space as you work in, you are going to come up with the same solutions.6. Killing ideas that aren’t working or that offer too little return is an essential part of innovation
The last learning talks about building an innovation culture
1) Clay Street facility in cincinnati where employees will go there weeks at a time. Looks like a combination of think tank and playground with whiteboards, comfortable chairs, props, crayons, toys, chalkboards, fabric, hula hoops, improv games, and a section for “random acts of innovation”. wild and unstructured brainstorming sessions to being more structured and focused.2) Idea generation, execution, project management, leadership (develop innovation leaders that must think creatively while sticking with processes and remaining objective enough to kill projects that need to die)----- Meeting Notes (4/24/12 08:09) -----3) courage, connection, curiosity, openness, collaboration
-Creates the kind of loyalty that makes consumers reach for same product time and again.
