Brand innovation

Benq, a Taiwan-based OEM/ODM firm, is finding it increasingly difficult to pull the wool over investors' eyes after reporting another huge loss. As is often the case with this firm, it included a huge asset sale in its recent earnings report to soften the impact of its operational losses. The big problem for many Taiwanese firms as they try to build their own brands is that they seem to believe that markets don't care about country of origin. We're not talking about the firm here, or the capital behind the firm, but the brand itself. Benq is never proactive in stating that it is a "Taiwan brand." In fact, you would almost think that it was pretending to be German, as can be seen in this billboard:



These firms think that they can build super-national brands, brands decoupled from any particular country of origin. Lenovo, a China-based PC producer, is also trying to build its Lenovo brand into a global brand without much emphasizing where it's from.


innovation management in Asiainnovation

Another type of innovation: aesthetic innovation

Regular readers of this blog know that there are dozens of "types" of innovation. Open any book on innovation and you'll see reference to product innovation, process innovation, operations innovation, value innovation, market innovation etc. etc. Some books include many of these types while others offer just a couple.

The variation of types of innovation can lead to a lot of confusion. However, you can often place these types into two broader categories: innovation that occurs on the value-creating side and innovation that occurs on the cost side. That said, doing this for service-heavy product offerings becomes a difficult task. Is a bus driver creating value or is he a cost?

After reading a bit of The Substance of Style by Virginia Postrel the other day at the book store, I thought I'd add yet another type to the ever-growing list of innovation types: aesthetic innovation. One of the main messages in this book is that product quality is pretty much a given these days and that aesthetics are, contrary to what some people argue, indeed valued by customers. Here's a taster of the tone of the book:

"GE believes in the aesthetic age. This is not a hip San Francisco style shop. These executives don't get their photos in fashion magazines or go to celebrity-filled parties. They don't dress in black, pierce their eyebrows or wear Euro-style narrow eyeglasses. This is General Electric. Jack Welch's company. Thomas Edison's company. An enterprise dedicated to science, engineering and ruthless financial expectations. GE doesn't invest in ideas because they sound cool. When a trend comes to Selkirk, it's no passing fancy." (p. 4)

But how can firms get aesthetics right? This must surely be a huge challenge. Here in Taiwan, Asus, an OEM/ODM firm that is trying to build its own brand, has added a bit of leather to some of its own-brand notebook computers. How will Asus' country-markets respond to this mash-up of hardware and skin, or as Asus puts it, "fusion of technology and craftsmanship"? Will the Germans go for it? Will the Australians lap it up? Will the Indians reject it?


innovation management in Asia

Exposing assumptions that block innovation

It's very difficult trying to "tell" people that their assumptions, prejudices and stereotypical views of other nationalities (country-markets) are often miles off the mark. You can often use brain teasers and lateral thinking puzzles to help people discover these for themselves. The first time I was asked to figure this one out I couldn't get beyond my own narrow (but "correct") view of the world. Try it yourself!

How can you throw a ball as hard as you can and have it come back to you, even if it doesn't hit anything, there is nothing attached to it, and no one else catches or throws it?

For the answer, go to the earlier post with the photo with the double yellow lines and the manhole cover.



innovation management in Asia

Mission statements, "mantras" and innovation

Call them what you like, but some form of short, written statement that describes what your firm does -- its "raison d'être" -- is worth having. It's much easier to innovate on the value side of the things if employees know why customers might crack open their wallets in the first place.

The following mission was articulated by Alfred Fuller, founder of Fuller Brush:

"In the buoyant elation of my adventure, I considered myself a reformer, eager to attack the dirt and domestic labor of the city; destroying the one and alleviating the other*.

Brushes. You'd probably get laughed out of the room if you came up with something like this in 2006, but is it really so absurd? This type of statement shifts the focus away from the product itself, in this case a brush, to the solving of problems. For Fuller, it also had the added advantage of motivating salespeople and reduced the embarrassment of cold calling.

So in addition to getting more specific with brainstorming sessions, it is probably a good idea to make sure everybody is crystal clear about the broader purpose of the firm.

* Alfred C. Fuller, A Foot in the Door: The Life Appraisal of the Original Fuller Brush Man (New York: McGraw-Hill, 1960), p. 87.

innovation management in Asia

Innovation and society

People working in innovation management appreciate that during the early stages of the innovation process, ideas need to be captured, communicated and evaluated against the firm's innovation strategy. Most of the time these interactions occur in the context of an office, meeting room etc. So what form of society is your typical office environment? Would Ferdinand Tonnies, German sociologist, consider life in the modern office as "Community" (Gemeinschaft) or "Society" (Gessellschaft)?

Tonnies wrote that, "In community, people remain essentially united in spite of all separating factors, whereas in society they are essentially separated in spite of all uniting factors."

In terms of innovation management it seems fairly obvious that most firms, although they may display some signs of "Community," are, for the most part, a form of "Society," especially in the case of large, international firms. In other words, individuals in firms have divergent interests.

It is worth bearing this in mind when presenting ideas to individuals/colleagues/superiors in your firm. When presenting an idea, not only do you have to contend with whether the individual has a clue as to how "good" an idea is, but you also have to consider carefully what these individuals' real interests and motivations are, as opposed to their espoused interests.

The Web is full of examples of how "experts" rejected ideas. Here's one from the Nesta.org.uk Web site:

"The concept is interesting and well-formed, but in order to earn better than a 'C,' the idea must be feasible."

A Yale University Prof commenting on a paper proposing reliable overnight delivery service by Fred Smith, founder of FedEx.



innovation management in Asia

Consumption and capturing the value of innovations

You hear a lot about how the "rise of China" is going to come at the expense of Europe, America and other "fully developed" regions. Proponents of this view treat trade as a zero-sum game, never mentioning the eagerness of individuals in China to display wealth and status, often in the form of "foreign" goods and services. The list is endless: a Mercedes, an MIT education, a top-of-the-line hi-fi system, a pair of Italian shoes, a bottle of single malt whisky, a night at the opera, Rolls-Royce engines and expensive cosmetics. There is also little mention of the capital goods that are imported into China and the fact that most of the developed world's economies are made up of locally delivered services, not products manufactured in low-wage factories.

So what's all this got to do with innovation? It highlights the importance of consumption to innovation -- the demand side. It also reminds us of the simple and powerful idea that "consumption changes the consumer" -- there will always be new-market opportunites opening up and others shrinking.

Amar Bhidé, of Columbia University's business school, recently presented a paper in Venice at the CESifo and Centre on Capitalism and Society conference. This is a lengthy read, but it provides a very interesting perspective on innovation and the importance of consumption to economic growth.

innovation in China