Category Archives: Building Markets

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Innovation in Recessions

thick_arrow_up_5575Successful innovation in recessions was examined in a Harvard Business Review article, Roaring Out of Recession, by Ranjay Gulati, Nitin Nohria and Franz Wohlgezogen.  They looked at increases in sales and earnings during a recession, and the strategies that were employed.  The goal was to determine the best strategy during a recession.  The strategies were grouped into four general categories:

 

  1. Prevention-focused,
  2. Promotion-focused,
  3. Pragmatic, and
  4. Progressive organizations.

Prevention-focused organizations focus on cost cutting and avoiding losses–a purely defensive strategy.  Within this category, the authors examined two major subcategories:  employee reduction and organizational efficiency.  These types of organizations are risk-averse, and will “batten down the hatches” when a storm approaches.  As a general strategy, prevention is the worst, however, organizations that pursued organization efficiency (vs. employee reduction) were more successful in this category.

Promotion-focused organizations focus on building assets and marketing–a purely offensive strategy.  The thought is that during a downturn, by investing in your core assets and building your branding, you’ll hold onto your current customers and build new ones.  Compared with organizations that pursue the prevention-focused strategy, they tend to do better.   The authors divided this category into market building and asset building.  In general, building marketing worked more effectively than building assets.

Pragmatic organizations do everything.  The pursue both offensive and defensive strategies, in essence, throwing everything they have at the problem.  This strategy is significantly better than either defense or offense alone, but is still not the most optimal.  In this case, they don’t “fine tune” the amounts of each type of strategy, and waste resources.

Finally, there are the pragmatic organizations.  They too pursue both offensive and defensive strategies, however, they only pursue operational efficiencies (with respect to prevent-based methods), and pursue both marketing and asset/capital investment with respect to promotion-based methods.  With this strategy, the financial outcome compared with the next best method, as measured by sales improvement is nearly 40% greater, and the improvement with respect to earnings is nearly 160% greater.

So, the bottom line is you keep your employees, and make capital investments that improve operational efficiency and marketing development–two areas that are best addressed with innovation.  Your people are your best asset, again.

Heres an Idea: Go Green on Earth Day with Flagpole’s FREE Program to Help Companies Boost Sustainability

Many organizations are wondering what they can do to make their businesses greener and more sustainable. Flagpole Software is offering afree program to help companies do exactly that,using the power of employee collaboration: just in time for Earth Day on April 22.

Our customers present Green Challenges to their employees as an effort to ramp up sustainable practices. AGreen Challenge is a company-sponsored event designed to inspire suggestions for improving sustainability and environmental friendliness.The ideas and projects are already being talked about within your walls, but most companiesfail when it comes tocapturing,evaluating, and turningthem into valuable initiatives.

What do weknow about Going Green?

We view a companys efforts to reduce their environmental impact as simply another important area for innovation and improvement. Applying our proven methods for inspiring and managing innovations, there is no limit to the Green Ideas your organization can find.

Flagpoles process makes it easy to leverage the wisdom of the crowd to uncover and validate suggestions for sustainability. For a limited time, We’reofferingour Earth Day Go Green Challenge program for FREE to companies wishing to conduct their own Go Green Initiative: a timed web event that will end on Earth Day.

All of the tools are included at no cost: a customized, hosted web application for collaborating with your employees, as well as pre-authored Green Challenges (or you can create your own business-specific challenges). Flagpole will even provide a follow-on benefit report and Press Release at no charge or obligation.

We can’t think of a better way forcompaniesto use oursoftware thanfor finding new ways to recycle more, reduce waste, and lessen their carbon footprints.

And as a business leader or manager, it should not be overlooked that there are also some very compelling secondary reasons for doing this. Many of our customers report finding substantial costs savings, new revenue opportunities or profit centers within their organizations. All of these things inevitably surface when you start looking for ways to conserve.

Interested organizations should get in touch withFlagpole immediately (Get more info NOW!) to get started in time for Earth Day.

Building Your Own Market for Innovative Products

The more innovative andrevolutionary a breakthroughproduct is, themore likelythat you’ll have tobuild your own market for it. Customers don’t come running for products they don’tknowthey need yet. However the payoff is huge! If you can define the market from the ground up, chances areexcellentthat you will own that market for a very long time.

Back in the 60’s, scientists working atDuPont developed Kevlar – ablend of polymers with five times the strength-to-weight ratio of steel.Accustomed to their constant stream of success withinnovative products, the chemical giantnaturally assumed that the market would simply come to them. After all, Nylon, Teflon, and several other artificial fibers ofDuPont’s creationhad been adopted byscoresofindustries and usedin successful products that were selling all over the place.

Not so with Kevlar. It simply couldn’t find it’s place in the world. All of the uses and products DuPont had envisioned were not feasable and industries were just not interested in the revolutioary new product. The biggest failurecame when American tire makersrejected Kevlar. The companies optedtocontinue usingsteel belts in their radials, rather than switch to something new, even though Kevlar offered a significant weight reduction. After all, steel was reliable, easier to source, and still a bit cheaper than the new material.

It took some very creative thinking andmarketing on DuPont’s part to find a niche in which to sell Kevlar. The testing began to find out all the new uses for this new fiber. They knew they had amiracle solution, now they just had to find the problem it solved.They went out to some their largestcustomers askedfor their input and shared theirresearch data. The real breakthrough camewhen they found itcouldstop bullets. Once the US Government caughtwind of the findings, Kevlar became the go-to material for making things like bullet proof vests and army helmets.With the militaryon board,the police forces across the country came calling and the rest is history.

Because of thisclever market adaptation, Kevlar has since proven itself an extremely worthy material for all kinds ofproducts from better ropes to boat sails to protective devices that workers use.History has proven it to be one of the biggest selling products DuPont ever introduced. Quite miraculously,it also totally redefined how DuPont proactively builds a market space for it’s new products before they move forward with developing it.As a result, they control the markets they create. Can you think of a product that challenges Kevlar in its own market space? I’ll give you a hint: In the 80’s a very similar material called”Twaron” was introduced by a competitor. It neverput the “tiniestding” in DuPont’s “armor”.

Lots of companies introducegreat ideas and productsthat just can’t quite catchtheir stride, and many that could performmuch better if the company spent more time to understand the marketplaceand the needs of potential customers. By going outside of your company walls toresearch and investigate trends and feedback you can begin tobuildbetter, and in a lot of cases brand newmarkets for your ideas.You just need to get innovative with how people are using your products and ask them for their ideas.

You can jumpstart this process withemployees and customers -they all have great ideas and will share them if you present the right challenge. With Flagpole (www.flagpole-software.com) you canshare business and marketing challengeswith everyone in and around your organization. Best thing is, you won’t spend billions on research like the “DuPont Corporations” of the World: You can get started for free right now.