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January 29, 2016

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Innovation can mean ‘permission to experiment’

In the popular imagination, the phrase “disruptive innovation” is so closely linked with Silicon Valley that it’s tempting to think non-IT companies have stood still since the 1990s. Some people tell me the last time a consumer products company generated worldwide buzz with a “disruptive” new offering was when Coca-Cola introduced “New Coke” in 1985 — a failure of epic proportions.

Yet, far from eschewing innovation today, Coca-Cola is today a hotbed of experimentation and using the power of design-thinking techniques to drive growth for the business.

Since 1992, one of the creative forces driving this innovation was Guy Wollaert, an architect by training, who was Coca-Cola’s chief technical and innovation officer until he left the company earlier in March last year.

For Wollaert, an innovation doesn’t have to be disruptive or headline-grabbing. It must simply create new value. “It can be an invention or a piece of technology,” he says.

Coca-Cola’s Freestyle mobile app is a more recent innovation — and one with more sex appeal. There are already more than 20,000 machines in U.S. quick-service restaurants. Typically, you get four choices at a self-service drink dispenser: Coke, Diet Coke, Sprite and Fanta ... Freestyle is a new interactive platform where consumers, on an iPad-like screen, choose combinations and can have 120 different combinations — totally personalized, all coming out of the same spout. It’s revolutionizing the whole quick-service-restaurant beverage experience. In Wollaert’s view, if necessity is the mother of invention, experimentation is the father.

First, it’s giving people, associates at all levels, the permission to explore, the permission to experiment, the permission to challenge the status quo, and the permission even to fail. That’s how you, inside-in, can change the mindset and the culture over time — if leadership clearly creates the space for people to experiment and, yes, to fail. Fail cheap and fast if you have to fail, but fail.

Second, innovation is about connecting dots externally, not just internally.

And then there’s a third dimension of how you activate innovation, which is outside-in. You don’t really know what you want because it may be so far from your core business, but you know there’s so much happening out there that you want to plug in and explore and connect (expand your ecosystem) and find things you can bring back to create new value for the organization.

A key source of external talent is Coca-Cola’s customers. One lesson of the New Coke fiasco is that consumers have very proprietary feelings about the brand. Wollaert is a big fan of social media because it allows the company to work with consumers as virtual lab partners. Today, companies that provide services and products in the marketplace are incredibly privileged versus previous generations, because there are all these social media platforms you can tap into directly and get instant feedback. You can co-create new services and products. That is an incredible privilege that companies have today — to speed up the times and test things together with customers and consumers, like never before.

In other words, consumer input tends to generate incremental innovation, not disruptive innovation. So while customer engagement is important, companies must rely on their own personnel, as well as outside experts, to generate big breakthroughs.

Cyril Bouquet is Professor of Strategy at IMD. Shanghai Daily condensed the article.




 

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