About the Author: Jeff Varick is the founder and president of Brandmotion (www.brandmotion.com), a Grand Rapids, MI, U.S.–based manufacturer of solutions for consumer electrics inside automotive vehicles and household appliances. He was formerly the director of New Product Strategy for Johnson Controls, and the new business development manager for General Motors International Operations in Zurich.
“The test of a first-rate intelligence,” F.
Scott Fitzgerald once wrote, “is the ability to hold two opposed ideas
in the mind at the same time, and still retain the ability to function.”
designers, engineers, and CEOs, that means we must balance the dual
challenges of investing in growth through innovation while managing the
current business bottom line. Too often, innovation efforts are one of
the first things to get cut in a recession. However, companies that
don’t innovate in this recession may not be around for the next one.
current trend is disconcerting. Many CEOs seem to be viewing innovation
as something you do when times are good. The engineers and designers
who remain during lean times live in fear of losing their jobs, stifled
from coming up with the next “Big Idea.”
to starting my own engineering and design firm, I worked for auto
supplier Johnson Controls and before that, General Motors, where I got
an up-close-and-personal look at GM’s retreat from being a leading
automotive innovator. Instead of coming up with the latest and greatest
breakthrough designs, GM opted to rebadge its lineup, putting a
different grille on a Chevy and calling it a Buick, not realizing how
badly their brand was deteriorating.
of leading, GM was caught for years in reactive mode, trying to catch
up to the competition. The new electric Chevy Volt is cool, but it’s
late. GM now has a great product lineup, but it’s one that it should
have had five years ago, maybe 10. This manufacturer may be the current
poster company for paralyzing its business by not looking ahead with
product innovation and taking the risks that go with that.
Some Innovative Approaches
recapture America’s innovative leadership that dates back to Alexander
Graham Bell, the Wright Brothers, and Henry Ford, companies have to
first commit to innovation as an essential, ongoing core business
practice. The key to better results from those efforts is to test the
innovative idea or product in the marketplace earlier and faster than
most companies would be comfortable doing.
companies hang on to ideas way too long rather than getting them into
test markets where they can learn and adapt. According to innovation
expert Clay Christensen of the Harvard Business School, 93% of
commercially successful innovations start out trying to solve a
different problem than the one that eventually succeeded.
that’s the reality of innovation, it makes the most sense to speed up
the process of cycling through value propositions to get to the one
that works. And since longer cycles of pursuing a wrong-headed track
just cost companies more money—and tie up precious innovation
resources—there couldn’t be a better approach to innovation for the
times in which we now live.
to take their ideas, prototype them quickly, and try to sell them in
market niches as a salable product with real consumers. They need to
learn what works and what doesn’t, and continue tweaking until the
market agrees on what it really wants—and then scale up in core markets.
technology today makes this process fast and inexpensive. A new wave of
open-source e-commerce platforms like Magento allow you to have a
unique e-commerce site up and running in days. Couple that with a
targeted Google AdWords campaign to drive traffic, and you’re now
learning with real transactions and real customers. Another technique
to lower costs is to find a partner company to cosponsor the product
and share the developmental risks and costs.
I oversaw marketing strategy and innovation within the automotive
interiors group at Johnson Controls, we wanted to move faster and test
our ideas more quickly, but we were faced with the “clock speed”
problem: the development cycle of vehicles is very slow.
answer was to try to decouple the development of new features from the
development of the vehicle. With a standard interface system, we felt
we would be able to speed up the development of new consumer content.
result was an overhead rail system for connecting consumer devices such
as DVD players, iPod holders, and hands-free phone systems. We saw
ourselves as “real estate” developers, facilitating opportunities for
seamless customization inside the car.
develop a lot of content in a short amount of time, we licensed the
overhead real estate to consumer brand companies such as Black &
Decker, Swiss Army, and Leatherman—companies with faster product
development cycles—and provided them with the opportunity to reach
their customers in a new environment. The system was a success, and at
one point was being built into 1 million new vehicles each year.
company was formed out of Johnson Controls to take this concept further
and develop additional new modules, and market them on the Internet,
direct to consumers.
Taking It to the Kitchen
yes, this applies to the appliance industry. One day, I received a call
from the director of advanced concepts and technology at Whirlpool. He
was intrigued with the rail-system concept, and wanted something
similar to develop the vast real estate on the refrigerator door.
ran a quick consumer survey that asked, “What’s the number one thing
that you want in your kitchen?” Some of us were surprised when the
answer came back as “more counter space,” but we shouldn’t have been.
We looked at what consumers had on their existing counters and saw not
only toasters, coffee makers, and dish racks, but also FM radios,
charging stations, iPod docking systems, CD players, satellite radio
systems, home computers, and TVs: All the artifacts of the modern
The refrigerator real
estate idea evolved into a system to mount and dock iPods, digital
picture frames, and even flat-screen TVs on refrigerator doors. We used
the same licensing concept, partnering with consumer brand companies to
develop the modules and share the risk. The system, coined “Central
Park,” debuted on a line of Whirlpool refrigerators in 2007, and became
one of the biggest media events in Whirlpool history.
America’s back is against the wall in the current economy, and many of
the nation’s biggest companies are struggling to adapt their business
models and are cutting back on innovation. But it’s also a great time
to create new businesses and product lines that anticipate a new order
of things in the next economy. Much will have been destroyed in the
process, but as the great economist Joseph Schumpeter taught us, this
process of “creative destructionism” is precisely what makes America
unique, creating the new from the remnants of the old.
Now more than ever, it’s time to innovate…or die by not trying.