There is plenty of evidence among successful companies that innovation is the key to differentiating your business and enjoying extraordinary profits. Business leaders are demonstrating the ability to develop and market exciting new products, even in mature industries. The tools and support necessary for transforming your business are no longer trade secrets. A corporate commitment to innovation can lead to the long-term results that your business deserves.

Two Powerful Testimonials: GE and Samsung

General Electric has received a great deal of media attention for the corporate effort that they initiated three and a half years ago to achieve exceptional growth in the face of a world market that is projected to offer only modest gains in the next 5-10 years. Without overall global economic growth, CEO Jeffrey Imelt is in the process of re-channeling the legendary GE management culture to continue to meet the high expectations of their shareholders.

For the previous 25 years, the GE legacy was one of hitting the numbers through deal-making, 6-sigma programs and cost-reduction efforts. The new expectation is that existing business units will provide growth from great new products. Although GE stock price has not exactly dazzled the market in 2005, one must accept that it takes time and resources to make significant cultural changes, especially in a large and diverse organization. "Imagination Breakthroughs", business ideas capable of generating over $100 million sales, are the key to their future success. The collective creativity of GE personnel throughout the world, once harnessed, is sure to begin delivering superior products across many of their business lines, returning this juggernaut to previous levels of market-beating performance.

Samsung is another global company that has improved its financial performance and the stature of its brand on the world market through a focus on innovation and superior design of its products. Their corporate commitment to improving design capabilities began in 1993 and has only had a major impact on the panache of their products in the last few years. It is interesting to note that this has occurred as their innovation focus has evolved from being product feature focused (physical design) to emphasizing customer experience (user interface). Although a November 2004 BusinessWeek assessment is that they have not yet matched the design resources and track record of some of their larger competitors (e.g., Sony and Apple), they have "managed to inject the importance of design into its corporate DNA" - no small accomplishment given the hierarchy of their traditional management style and reporting structure.

Learn About Innovation

Who are the keepers of the tools for great product design? BusinessWeek sponsors the annual Industrial Design Excellence Awards (IDEAS) and they featured the 2005 winners in their July Fourth issue. A certain number of firms have been perennial IDEAS finalists and a visit to their websites provides us with a composite study of the tools and philosophies that they bring to bear on achieving greatness in meeting their clients' needs. There is clearly a pattern in the current trends of innovative product design.

IDEO has been at the top of the heap for several years. Their corporate website describes the company's primary mission is to "design products, services, environments and experiences". They emphasize their use of multidisciplinary, collaborative teams and a culture in which "good ideas are born and flourish". The good news is, they have not been shy about sharing their expertise.

There are several ways that a firm can benefit from their track record of excellence. Clients can hire and work with the IDEO team to explore their particular area of interest, or they can attend "IDEO University" innovation workshops and learn to use the IDEO methods themselves. If you believe that you are already a budding product and process innovator (or are on a really tight budget), you can get started in their approach by buying the IDEO Method Cards for $49 (www.ideo.com). They provide 51 quick reference examples for many of the proven IDEO creative methods and help beginning designers examine 4 categories of collaborative group problem exploration: Learn, Look, Ask, Try.

Design Continuum is number 2 on the 5-year listing of IDEA award winners. Their design approach is expressed as follows: "We turn our passion for understanding people into inspired strategy, breakthrough products and compelling brand experiences." Smart Design, another repeat award winner, strives to establish "...ways to emotionally connect people with products and experiences" resulting in a "design solution that builds bonds between companies and their customers"

It is clear that the current dominant design theme is to translate a new or deeper understanding of the customer and their needs into product features, service embellishments or environmental factors. Often the efforts of these firms are centered on finding latent needs - ones of which the customer is currently unaware. These can only be discovered through very careful study and observation of the customer's interaction with existing products and situations. The IDEO site even features a book, Thoughtless Acts, that helps one become more proficient in observing "all those intuitive ways we adapt, exploit, and react to things in our environment; things we do without really thinking."

How important is it for us to figure out how to make these observations? In each opportunity for product innovation, the first player to tune into this latent need will enjoy a clear advantage over their competitors. According to a study published in the September 2004 Journal of Product Innovation Management, "...if in developing new products a business relies solely on what customers say they want in a new product, the business is economically very vulnerable to strong competition." Any customer could share their known needs with your competition just as easily as they share them with you. A proactive effort on your part to understand their latent needs gives you the inside track on developing products that your competitors are not even thinking about!

Re-Think Your Innovation Horizons

Do not limit your possibilities for innovation by thinking that your products are mature, commoditized or boring. Many contemporary successful innovations have involved products and service areas that we all take for granted. Consider the following areas for product and service innovation and the solutions that have made a big splash in the marketplace:

Product features and performance:

• Roof sheathing nails - It does not get much more boring, mature or commoditized than this! Stanley was able to innovate with simple roofing construction nails by enlarging the head, adding ribs to the shank and finishing it off with a purple polymer coating to aid penetration. The net impact is a labor savings of 27% (using fewer nails) and a 30% stronger structure.
• Integrated cell phone/email/camera/PDA/TV/MP3 player/GPS... If you are reading this article, you know what these are all about! The electronic toys only get more features and become more impressive status symbols. For many customers, price is not an issue. They simply must have the latest gadgets.

Simplification and Streamlining:

• Airline kiosks - How many of us have waited patiently while an airline ticket counter attendant punched away at the keyboard trying to locate our reservation and issue our boarding passes? The self-serve ticket kiosks now enable us to control our pre-boarding activity and reduce airline labor for this repetitive clerical process. The process can be made even more convenient by going online and printing your boarding passes before you leave home.
• Watercone - This design winner is a solar water distiller for purifying brackish water in remote or harsh environments. The simple, low-tech apparatus has no power requirements and no moving parts.

Ease of Use - developing products that perform old jobs more easily:

• Swiffer floor cleaning products: Whoever thought that sweeping the floor could become a new, fun experience? Procter & Gamble's latest TV commercials show family members arguing over who gets to clean the floor next - talk about enhancing the customer's experience! There are now 7 different product lines under the Swiffer brand name, including a new system that moves from the hard floors arena to the carpeted floor market (see CarpetFlick at your local household goods emporium!)
• Good Grips kitchen tools - ice cream scoops and potato peelers that are easier to hold and easier to use for people who have lost strength and dexterity in their hands.

Safety and Emergency Situations:

• Skin clip wound closure system - This instant wound closure system can be used when traditional sterile suturing is not an option. The two pieces of the plastic clip engage the skin with small pins and then snap together over the wound
• Water-Gate Dam - a self-deploying system for holding back surging waters in an emergency flood situation. Such devices should be standard emergency equipment in all communities with low-lying areas.

Cost Reduction

• Disposable sandals made from recycled paper: At 50 cents a pair, this footwear can be a boon for impoverished people in many parts of the world.
• Zire 21 from PalmOne: A full-function PDA for under $100 moved the device into the broad consumer market.

There are plenty of innovation success stories at all levels of the economy, in almost all areas of products and services. Use the examples above as a starting point to inspire your organization to think outside the box. Developing the "Imagination Breakthroughs" touted by General Electric is not going to happen without deliberate, directed and persistent effort. There are organizations, training and tools available to support you in your attempts to make innovation a part of your path to profits and growth. Your challenge is to muster the company-wide commitment to make it happen.

Steve Rutan is a Consultant with Center for Simplified Strategic Planning, Inc. He can be reached via e-mail at

For more, click here for a free subscription to Course and Direction.

© Copyright 2008 Center for Simplified Strategic Planning