Saturday, August 30, 2008

Innovation - It’s All About Who Benefits

Business Week ran a great story about design as the vehicle for innovation last week. Great companies have no shortage of new product and service ideas. The hard part is figuring out which ones are worth pursuing. Right now, Best Buy has two consulting firms helping it sort though and make sense of its laundry list of suggestions from inside and outside the company. Think how long that list must be!

The BW article points out the creative power that constraints inject into the innovation process, and uses Coca Cola as a case in point. For Coke’s VP of Design, the mission was to avoid cool concepts that would never see the light of day. Instead of generating ideas and then trying to find a place for them, he is leading the company to identify and address basic problems that design can solve.

For example, store coolers are a primary showcase for Coke’s products. They’re expensive and use a lot of energy, and retailers change them out only when they have to. Coke’s design team would have loved to overhaul the cooler design, and the brand team would have welcomed the simultaneous visual update across all stores.

But it was clearly smarter for them to take a modular approach, allowing stores to “retrofit” the new design onto their existing coolers at a pace that made sense for store budgets and business. At the same time, Coke designed completely new, more energy-efficient coolers to give retailers a clear economic reason to change out their old coolers. It’s a win-win-win – Coke gets coolers reflecting its new brand look in stores sooner, stores get a updated look sooner for less, and retailers interested in energy efficiency can cost-justify the new coolers.

The story got me thinking about other manufacturers who could do the same to help their channel partners and themselves through smart, constrained innovation. Mattel is one that came to mind. At Toys ‘R Us and elsewhere, parents and girls ages 2-9 are faced with the Barbie aisle’s wall of pink. It’s tough to find which part of the Barbie assortment is for a 3 year-old vs. a 7 year-old. It would be a big help to customers and store employees to have the packaging, fixtures and visual cues direct customers to the right part of the aisle.

Who's on your list?

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