Customers have to park, walk, and wait. It remains to be seen how Tide Dry Cleaners will fare, but one promising sign came in , when Andrew Cherng, the founder of the Panda Restaurant Group, announced plans to open franchises in four years. Efforts to build a new-growth factory in any company will fail unless senior managers create the right organizational structures, provide the proper resources, allow sufficient time for experimentation and learning, and personally engage.
Leaders sometimes see efforts to foster new growth as completely distinct from efforts to bolster the core; indeed, many in the innovation community have argued as much for years. Our experience indicates the opposite. First, new-growth efforts depend on a healthy core business. A healthy core produces a cash flow that can be invested in new growth. Second, a core business is rich with capabilities that can support new-growth efforts.
Those relationships are a powerful, hard-to-replicate asset that helps the factory expedite new-growth initiatives. One of the project teams at the workshop was seeking to spur conversion in emerging markets from cloth to disposable diapers. Advertising campaigns touting this advantage helped make Pampers the number one brand in several emerging markets.
It also deploys portfolio-optimization tools that help managers identify and kill the least-promising programs and nurture the best bets. These tools create projections for every active idea, including estimates of the financial potential and the human and capital investments that will be required. Some ideas are evaluated with classic net-present-value calculations, others with a risk-adjusted real-option approach, and still others with more-qualitative criteria.
Sustaining innovations bring incremental improvements to existing products: a little more cleaning power to a laundry detergent, a better flavor to a toothpaste. Commercial innovations use creative marketing, packaging, and promotional approaches to grow existing offerings. Transformational-sustaining innovations reframe existing categories. They typically bring order-of-magnitude improvements and fundamental changes to a business and often lead to breakthroughs in market share, profit levels, and consumer acceptance.
Disruptive innovations represent new-to-the-world business opportunities. A portfolio approach has several benefits. First, it sets up the expectation that different projects will be managed, resourced, and measured in different ways, just as an investor would use different criteria to evaluate an equity investment and a real estate one.
Second, because the portfolio consists largely of sustaining and transformational-sustaining efforts, seeing it as a whole highlights the critical importance of these activities, which protect and extend core businesses. Remember how the new-growth factory began: with a simple two-day workshop. It then expanded to small-scale pilots in several business units before becoming a companywide initiative. Staged investment allows for early, rapid revision—before lines scribbled on a hypothetical organizational chart are engraved in stone.
It also provides for targeted experimentation. For example, there is legitimate disagreement about the best way to organize for new growth. Treating capability development itself as a new-growth innovation lets companies try different approaches and learn what works best for them. Anticipated and nascent markets are notoriously hard to analyze.
Teams have sold small amounts of products online, at mall kiosks, in pop-up stores, and at amusement parks—even in the company store and outside company cafeterias. The company has also tested entire business models—recall the Kansas City pilots of Tide Dry Cleaners.
At any given time the company has hundreds of teams working on various innovation efforts. In the past, most teams consisted mainly of part-time members—employees who had other responsibilities pulling at them. But disruptive and transformational-sustaining efforts require undivided attention. Try our service FREE. See most popular articles. You're reading an article by Simply Safe Dividends, the makers of online portfolio tools for dividend investors.
Try our service FREE for 14 days or see more of our most popular articles. The company currently sells 65 product brands in more than countries. The company has also paid uninterrupted dividends for since The company also boasts the largest amount of e-commerce sales in its industry. Simply put, non-food consumer products have historically been very sticky, resulting in a relatively slow pace of change. Looking ahead, the consumer staples industry is forecast to expand 3.
The industry's growth is expected to benefit from a rising world population as well as an increase in the number of middle-class households, boosting demand for consumer staples products. In effect, we are building a social system with the purchasers and potential purchasers of our products, enabling them to codesign and co-engineer our innovations. Integrating Innovation We are constantly innovating how we innovate.
We keep refining our product-launch model — from idea to prototype, to development, to qualification, to commercialization. Applying this sequential practice on a large scale, and making it replicable, does not mean eliminating judgment.
In fact, scalability is often the justification for our existence as a multinational, diversified company. Our innovation practices are thus designed for deliberate learning, across all our functions, product categories, and geographic locations.
Once people understand a particular process, they can replicate it and train others. It soon becomes a part of normal decision making. We had always invested a great deal in research and development. But we had not integrated these innovation programs with our business strategy, planning, or budgeting process well enough.
They were somewhere else: in line management, marketing, operations, sales, or administration. We had to redefine our social system to get everybody into the innovation game. And all innovation is connected to the business strategy. For instance, we are now set up to see many more new ideas. Any of these may propose new technologies, new product prototypes, or new ways to connect us to our consumer base. Last year, the business development group reviewed more than 1, external ideas. We tend to act on about 5 to 7 percent of them.
We are also open to ideas from more regions than in the past. Innovation used to travel primarily from developed markets to developing markets. When new technology appeared in Japan, Germany, or the U. Today, more than 40 percent of our innovation comes from outside the United States. People in India, China, Latin America, and some African countries have become part of our social system. Their presence has made us more open, and this helps compensate for our natural tendency to become more insular.
We maintain open work systems in a lot of places around the world. We made it round as a small symbol of the new approach.
We still look for these qualities, but we also look for agility and flexibility. People just learn them in a different way. Curiosity, collaboration, and connectedness are easy to talk about but difficult to develop in practice. And in the process, we have discovered that most of our people are naturally collaborative. As they move through their careers, we deliberately increase the complexity of their assignments.
Whatever the challenge, it stretches them. We give our most promising people time in both functional and line positions, because we think our best leaders are great operating leaders and great innovation leaders. We also move people around geographically. We bring people into our Cincinnati headquarters from around the world, and we make a point of moving our headquarters people to our global businesses. Almost all of us have worked outside our home region.
Almost all of us have worked in developing or emerging markets. And almost all of us have worked across the businesses. We track that progress very carefully. This background has made it easier for us to plug manufacturing and engineering into the innovation culture. Once people have succeeded at innovation, you can see the energy in the company changing.
This is feasible. On average, younger managers and younger employees are more open to fresh, innovative thinking. We have also recently brought in people from outside to enable and stimulate creative thinking. This was unprecedented for a company that has traditionally hired only entry-level people and promoted from within. Virtually every leading practitioner of our new design capability came from the outside as a mid-career hire.
They arrived from BMW, Nike, and some of the best design shops in the world. They bring us not just the art and science and practice of design, but an integrative way of thinking. Integrative Thinking One of our favorite examples of integrative thinking involves Febreze, a very successful odor-control product. One of the active ingredients in Febreze surrounds a malodor and removes it, as opposed to covering it up or masking it.
Febreze started out as a fabric refresher. Not long ago we took the Febreze package, product, and brand name to Japan.
We tested it on a small scale with Japanese consumers. They rejected it.
0コメント