If there is a buzzword in the world of global business today, it is innovation. Especially product innovation, which is the sexiest of all and the focus here. Standing still is equated to a certain death. Consumers are more and more demanding, and given a myriad of choices and continual “Better ways of doing things” will leave your product at the mere hint of something better. Blackberry not so long ago ruled the world, now they teeter on the edge, out-innovated by the I-Phone. Remember when Netscape ruled the internet? No more. Hell I can still remember when having a pager was a cool thing!
Companies like my former employer P&G are lauded for their product innovation pipeline. We had “initiative cycles” of ensuring “product news” to consumers on some high-churn categories like shampoos every 6 months. Any slower than that, and we risked losing market share! I now give a number of differing keynote speeches on various business topics, and “How to drive more Innovation” is top of the list. In fact I just delivered this very talk to a group of senior executives of a Fortune 100 company just a few weeks ago.
Yet, innovation is like anything else. Nothing is 100% a good thing. Whilst some business leaders would argue, “You can’t have too much innovation”, I would argue you can. There are times and places and categories where too frequent “churn” of a product can not only lead to stagnation but even decline.
Still not convinced? Let’s look at some examples.
Let’s go back to 1985/86. Another former employer of mine, Coca Cola, armed with consumer data, decided to change the 75 year old Coca Cola formula. Well, after several months of uproar, and over 1 billion dollars in negative press coverage, the company relented and went back to the “old formula”. To this day, this 100 year old brand, one of the world’s most valuable, has not made one “new and improved” innovation to the regular Coke product! Yes, they have launched line extensions like Coke Light, Coke Zero and others, but the mother brand has stayed the same. Any innovation they do is AROUND the product like a World Cup promotion. And this is a smart strategy. Consumers take comfort in continuity in certain areas of life. And taste is one of them. The easiest way to kill Coke would be to treat it like P&G treats a laundry detergent, changing the formula regularly and slapping “New and Improved” on the front of the pack.
Or let’s talk running shoes. I am an avid marathoner. Like all runners, we “fall in love” with a specific shoe that fits our feet perfectly and help us run smoothly. I used to love a shoe called the Nike “Vaporfly”. But after a few years, Nike discontinued the model and renamed it something else. And of course completely changed the shoe—the design, how it felt, the weight. It was supposedly “better” but for me it absolutely sucked. So in search of a replacement, I had to LEAVE THE BRAND.
I then find a wonderful shoe made by Adidas, one of their “Adizero” line. And for 2 more years, I am happy. Until now. Because some brain surgeon in the marketing group, following their endless desire to “innovate” and churn new products, decided to change everything. So the new model is NOTHING like the former. Put it on, and it’s hardly improved. It’s now like wearing a brick. So once again, a loyal consumer is now forced to shift brands!
One of the cardinal rules of marketing we learned time and time again is, “It is easier and less expensive to keep a consumer, then to lose them and have to lure them back”. Why the heck can’t these guys innovate around the product? Why not hold some “tried and true” models consistent? I am hardly the only runner to complain of this. We all do.
I could go on and on. But the point is the continual desire we have for innovation as consumers, the kind that drives us to rush for the latest I-Pad, is hardly true on every category. From my observations, when it comes to taste, physical comfort (such as a running shoe, or a favorite brand of underwear), or tradition, innovation on the core product must be pursued with caution. Changing a tried and true formula is often a recipe for disaster. Choose to innovate in other ways beyond product—promotionally or on the packaging. Step back and evaluate your business. Is it like detergents, a non-emotional category where “Better cleaning” is always a good thing? Or is it more emotional, like the taste of Coke, the feel of a shoe, or a life tradition? If it is the latter, pursue the product churn approach at your own risk. I am sure if you blindly follow such a strategy, this will make your competitors quite happy.