Innovation by numbers
The Economist writes about Reckitt Benckiser, a UK-based manufacturer and marketer of numerous household, health and personal products, and the role innovation has played in the company's recent good results. The article quotes Bart Becht, the company's current CEO:
"Mr Becht attributes his firm's success to its innovative and entrepreneurial culture. Up to 40% of Reckitt's sales come from products that are less than three years old. Innovation is not driven by high expenditure on research and development, but by the company's insights into consumer habits. Controversy is encouraged. The company's multinational staff come from very different backgrounds, which 'creates tension in the system,' says Mr Becht."
We don't know if this 40 percent refers to "new" products (i.e. less than three years old) from the company's perspective or the market's perspective. It could well refer to the many new brands that it has brought into the Reckitt Benckiser house. The most interesting part of the above comment, though, is the reference to the "company's insights into consumer habits" -- ethnography. This requires taking the focus of innovation well beyond the core product into such areas as the brand, the packaging, the smell, the channel of distribution, pricing, availability, container design, among many others. You can basically capture any element in the product space (i.e. the 4 Ps, the 7 Ps, the 22 Ps, whatever) and label your innovation according to that. One thing's for sure, the terms product innovation and process innovation alone are just too broad and limiting -- there needs to be a much more sophisticated vocabulary.
A truly American brand from a UK companyCompanies like Reckitt Benckiser have to be pretty good at innovation as they are not really selling anything that is particularly advanced in a technical sense. Also, they are often selling a product that probably hasn't changed much over the years. For example, has the recipe for its popular hot sauce changed from the original? Beyond the obvious brand innovations, many of the other types of innovations can be seen in any outlet in which the products are sold -- and anybody can learn from these innovations.
Take a walk down any supermarket aisle with a little notepad and record anything you see that catches your attention and write it down. It's better to do this activity with a member of the opposite sex, as you'll be able to see things you'd otherwise never notice. Once you get home, you can attach a label to the innovation -- not always easy as the boundaries tend to overlap. What examples of package design innovations do you see? What about price innovations?
The real question of course is how any of these non-core-product innovations can be applied to your own product or service?
"Mr Becht attributes his firm's success to its innovative and entrepreneurial culture. Up to 40% of Reckitt's sales come from products that are less than three years old. Innovation is not driven by high expenditure on research and development, but by the company's insights into consumer habits. Controversy is encouraged. The company's multinational staff come from very different backgrounds, which 'creates tension in the system,' says Mr Becht."
We don't know if this 40 percent refers to "new" products (i.e. less than three years old) from the company's perspective or the market's perspective. It could well refer to the many new brands that it has brought into the Reckitt Benckiser house. The most interesting part of the above comment, though, is the reference to the "company's insights into consumer habits" -- ethnography. This requires taking the focus of innovation well beyond the core product into such areas as the brand, the packaging, the smell, the channel of distribution, pricing, availability, container design, among many others. You can basically capture any element in the product space (i.e. the 4 Ps, the 7 Ps, the 22 Ps, whatever) and label your innovation according to that. One thing's for sure, the terms product innovation and process innovation alone are just too broad and limiting -- there needs to be a much more sophisticated vocabulary.
Take a walk down any supermarket aisle with a little notepad and record anything you see that catches your attention and write it down. It's better to do this activity with a member of the opposite sex, as you'll be able to see things you'd otherwise never notice. Once you get home, you can attach a label to the innovation -- not always easy as the boundaries tend to overlap. What examples of package design innovations do you see? What about price innovations?
The real question of course is how any of these non-core-product innovations can be applied to your own product or service?
posted by Gordon Graham at 8:17 AM
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