Summit Stresses Innovation Is Messy, But Worth It
Want to spark innovation? Start dating your customers—and your employees—two speakers told the audience at the 2019 Restaurant Innovation Summit in Cleveland in early November.
If we think of innovation as fighting our competition, keynoter David Robertson, author and professor at MIT, said, we are just doing the same thing they’re doing at a lower price point. We don’t really find a new story to tell.
“Think of it as dating your customer,” he said. Ask yourself: “Why are they coming, what else can we do to keep them coming? Start with the counterproductive question: What are you not going to change? And then to thinking more broadly: Are they going there to celebrate an event? (Or) ‘because they don’t want to cook?”
Knowing your customer intimately gives you the ability to create products and services they’ll want based on what they already like about your existing offerings.
Robertson started with the non-restaurant examples he’s most familiar with—he wrote the book on how Legos rewrote the rules of innovation—to set the stage on how innovation can go wildly wrong when leaders ask employees to think outside the box and instead they think outside the brand.
In the case of Legos, the small brick construction toy made in Denmark, sales dipped and innovation came in the guise of toys that no longer had an affinity with the original line. Once they went back and innovated around the brick, they created products lines with stories that complimented the mission of the toy. It didn’t hurt that they licensed Star Wars and Harry Potter rights to use those likenesses in their toy kits. But now they have Lego books with the Lego characters and other items in keeping with kids who like to build their toys.
The company was also able to take advantage of the “death of retail,” by taking over abandoned department store spaces that had closed to create destination Legolands, where parents paid $20 to $30 a head for their children to use the climbing walls and other activities, while they enjoyed the free WiFi in the café. And then, there’s the retail store visitors pass through on the way out, where “no parent leaves unscathed,” he says, referring to their wallets.
Robertson described innovation as “a new match between a solution and a need that creates value.” And it can be creating a new match of two solutions.
Other examples he gave were the drones USAA insurance used to assess property damage for homeowners in flood and fire areas so their customers could receive payments faster and be first in line for repair services, and the Spin Pop (the lollypop that spins so you only have to hold out your tongue to lick it) that created a new category—“active candy.” When the founder’s disgruntled son-in-law left the company, he applied the same technology to toothbrushes and sold his patent to Proctor & Gamble, who wanted to build ancillary products for their toothpaste brand, for half a billion dollars.
Another innovator was Gatorade, the sports drink company owned by Pepsi. When Coke came out with a cheaper version, Gatorade was forced to innovate, Robertson said. “Gatorade had fallen into trap of too many flavors,” so they dated their customers. The brand talked to athletes who told them they did carb-loading before their competitions, hydrated during and had a recovery phase. Gatorade developed branded items for all three phases and won the market back.
A harder version of that same story is Guinness, which discovered that the bulk of its beer was being sold in Irish pubs. In order to increase market share, they formed a development company that helps potential customers design, build, run, and stock their own Irish pub. “They created a shrine to Guinness. And in doing this they created a boost in sales,” he said.
Not all innovation has to be earth-shaking, Robertson said. “It can be incremental changes that improve something that’s already there.” And it may or may not be profitable, but helps the product line in other ways.
And there’s “innovation inside the box. Incrementally improve what you’re doing every day. And sometimes there’s revolutionary things that you can do to change the game,” he says. “There’s (also) innovation around the box. And it starts with what made you great as a business and innovating around it. “
When it comes to innovation, we don’t often hear the failure stories. “Failure is a key part of innovation,” said Athena Thomas of Wingstop, who was one of the operators who gave a five-minute lightening-round talk on the topic. About “85 to 90 percent of innovation fails. Keep in mind failure pushes us to think of new territories,” she said. And something that didn’t work the first time it was proposed may in a new set of circumstances.
“Reward teams for taking smart risk,” she said, and realize that innovation is a long-term proposition and you have to walk the entire path.
6 Key Takeaways
1. Innovate around your greatness. Start with what you do well and then add ancillary services or products that meet a need with your core group.
2. Be your team’s “green-lighter,” someone they feel safe sharing their ideas with. (If people are criticized or ridiculed, they won’t open up again even when they have a million-dollar idea.)
3. People have neurological changes when they are offered a deal, such as a 2-for-1 coupon.
4. Listen to what your guests say, but also what they do, and don’t allow your unconscious biases to make assumptions.
5. Get connected to diverse communities so you are meeting the needs of a large number of people, not just a narrow population.
6. The first follower is the one who gets a new idea started, not the founder.