Author Archives: John Bessant

About John Bessant

Originally a chemical engineer, John Bessant has been active in the field of research and consultancy in technology and innovation management for over 40 years. He is Emeritus Professor of Innovation and Entrepreneurship at the University of Exeter and also has visiting appointments at the universities of Stavanger, Norway and Erlangen-Nuremburg, Germany. Author of over 30 books and 200 articles, you can find out more here:

The Power of Position Innovation

How creating experiences for underserved markets can be a key innovation strategy

The Power of Position Innovation
Image: Dall-E via Bing

GUEST POST from John Bessant

It’s summertime, at least here in the northern hemisphere and chances are that August is a holiday month. Which might well see you sitting somewhere and watching an exotic sunset, glass of something suitably refreshing in your hand. As you see that golden disc slip below the horizon and the wonderful display of red shifting colour begins to settle towards nightfall you might spare a thought for the memory of Tom Gullick who died this month. Because for many of us jetting away to our exotic location might not be happening were it not for his innovation efforts….

An avid bird spotter (he held the record for the most birds (over 9000) spotted by an individual) he was a bit of a Don Quixote figure, not least because he took up residence in La Mancha in Spain and pursued a conservationist crusade during his later years, saving at least one species of duck from extinction.

But he has another claim to fame — as one of the founding fathers of the low-cost travel experience. His bird-watching abilities gave him good observational skills and led him to spot an opportunity in classic entrepreneurial fashion — and then to go after it with a passion.

Working for a hundred year old firm of shipping brokers (Clarksons) he was given the task one day of getting people to Brussels to attend the World Fair Expo58. The entrepreneur in him rose to the challenge; he chartered a DC-3 plane to fly from Southend airport and arranged coaches, refreshments and even a tour guide, offering the entire package for £6. It worked well but his interest was piqued when he found out that another entrepreneurial member of the party had seen his offer and bought a sheaf of tickets, reselling them via an advert placed in the London ‘Evening Standard’ newspaper for £8! That was the trigger.

Image: Dall-E via Bing

He managed to persuade his rather conservative employers to set up a travel subsidiary and became a pioneer of what became known as package holidays. Coming after years of post-war austerity his offer of trips to places abroad, whether the tourist sights of Belgium or Switzerland or the beaches of the Costa del Sol was avidly taken up. He pitched his offer to those previously underserved by the travel industry, offering experiences to those whose normal holidays might be spent in a beach hut at Bridlington. As he later explained in an interview,

“My happiest moment was standing at Rotterdam airport at the end of the day, watching the buses return from the bulbfields with the Dakota DC-3s lined up waiting to take our customers home. They were so happy because they had never believed they could afford to go abroad.”

Within a decade Clarksons had become one of the major players in a market which was exploding with pent-up demand. They offered a wide variety of experiences, from wine tours in France to trips along the Norwegian fjords; their sunshine holiday business was particularly popular , built on a fixed price all inclusive model delivered at low cost. His skills as negotiator helped deliver this — he could guarantee to fill hotels or aircraft if the supplier was prepared to offer competitive pricing.

Other companies joined the party and it wasn’t just the British who were travelling; increasingly horizons for European tourists were extending. Inevitably this brought a highly competitive edge to the market and required a business strategy based on investing in being able to deliver experiences by assembling the different elements and engineering them down to a package with a thin profit margin. He found increasing difficulty in explaining this to a company whose core business in ship-broking operated on very different models and so he finally left in 1972, retiring to Spain to begin his second career as a bird watcher /conservationist.

He got out just in time; by 1974 cut-throat competition from the growing number of players, a devalued UK pound and the emerging oil crisis with its pressure on fuel costs forced Clarksons into collapse in the middle of the summer tourist season.

Image” Dall-E via BIng

The business model hadn’t failed — but it did need development and fast learning. All the pieces were there — interesting destinations, hotels, buses, aircraft and so on. The difference was in the market — classically growing at the edges of an existing one. But bringing this new business model to life required reframing how both product and process worked. Margins were thin and so new approaches were needed to booking and operations, while delivering the package experience required a new profession — the tour rep — who would need enormous versatility (dealing with everything from entertainment, health and safety, administration, currency exchange, etc.) while all the while smiling for the customers!

It wasn’t disruptive innovation — yet. What was going on was learning to serve a very different market with a new experience based on lower cost. But the learning about how that model might work sowed the seeds for what later did become a revolution which transformed the travel industry. The evidence for this is with us today. Low-cost airlines like Ryanair, Wizz or Easyjet have revolutionised the world of short-haul travel and although they faced heavy setbacks during the Covid-19 crisis they are now returning to profitability and popularity.

Image: Wikicommons

But the package holiday was not a new idea. Some 100 years previously a certain Thomas Cook was looking for a new offering for his growing travel business. Originally a printer and Baptist lay preacher he’d built his original business organising day trips; his first didn’t run too far (the relatively short hop from his home town of Leicester to nearby Loughborough) but in 1841 it gave birth to his travel business. Four years later and he’d clearly tapped into a rich potential market; his trip to the seaside at Liverpool was booked by 1200 people and he had to repeat it two weeks later for another 800 happy travellers.

Cook began to extend his trips across the Channel and by 1863 had seen the possibilities of offering people the opportunity to see far-off places and sights (like the famous Mount Rigi in Switzerland) for themselves. In doing so he pioneered what effectively became the package tour, organizing not only the travel (by road, rail, boat, even mules) and accommodation but also providing guides to help conduct the tour.

Mind you his tour was not for the faint-hearted. In her diaries an intrepid young woman, Jemima Morrell described in detail a world of 4am alarm calls, 20-mile hikes and other challenges — not least of which was also being able to dress for dinner every evening in the hotels in which she stayed! But she clearly felt it was worth it for the experience.

“The days spent on foot, or by the sides of mules, afford the greatest satisfaction …..It was then that, away from the life of the city, we were taken into the midst of the great wonders of nature and seemed to leave the fashion of this world at a distance … It was an entire change; the usual routine of life was gone. All memory of times and seasons faded away and we lived only in the enjoyment of the present.”

Thomas Cook’s ideas changed several things. From the point of view of Switzerland it helped transform a poor rural economy into a travel destination; today the Swiss Alps are one of the world’s most popular tourist destinations.

Cook also created a system-level innovation, much as Henry Ford was to do with the motor car fifty years later. Putting together a successful package tour involves much more than simply arranging travel and tickets. Cook pioneered the complex logistics, arranged for integration of different travel and accommodation options, provided a system of coupons (the forerunners of traveller’s cheques) to help pay for goods and services, developed a network of guides and other support staff and printed brochures not only as sales tools but as a way of engaging customers in imagining and dreaming about the journey they were about to embark upon. In doing so he can rightly be considered one of the founding fathers of an industry which today is worth over $7 trillion.

What he pioneered was ‘experience innovation’ — not simply offering travel but a whole new experience. In his case it was the wonders of the Grand Tour brought to everyone, in Clarksons’ case it was the joys of sun-drenched beaches, endless sangria and exotic food to try.

‘Position innovation’ of this kind begins with a reframing of possibilities — classic entrepreneurial territory. Tom Gullick saw an opportunity in meeting needs for a different group and packaging the experience up rather than leaving them to select their own. Travel agents were involved at the time because the infrastructure for booking wasn’t developed; the later low cost revolution saw increasing disintermediation and the emergence of platform models where you buy your travel, car hire, hotel, parking, currency, anything else you might want, all of it via a one stop online platform.

But in order to meet the needs of an unserved or underserved market requires close interaction and fast learning with that market. By definition it doesn’t exist yet in developed form so the process of co-evolving with it is going to involve a bumpy ride. The Clarkson experience was one of experimentation and building fast learning — from the prototype of Expo58 to the slick summer exodus managed in the heydays of the 1970s.

This is challenging but it also means that position innovation can provide a valuable learning laboratory for those wanting to get out of the box which serving the mainstream market can sometimes represent.

A good example is the fascination (and huge market potential) of digital wallets and mobile money. We’re still (well I am) excited by the fact that we can now use our phones to pay for a whole raft of goods and services and the potential is of course huge. Given an accelerating shove by Covid-19 the shift towards a cashless society has been rapid. Not for nothing is Elon Musk trying to create a new brand X (why do I think of washing powder when I hear that?!!!) and give the bird the bird? It’s got little to do with messaging and everything to do with trying to emulate the power of the WeChat platform in China which is an ‘everything app.’ But at its heart it is about mobile money — so much so that even beggars in China have QR codes so that you can support them with a click of your phone button.

So the cutting edge of innovation — right? Not necessarily. If you live in East Africa you might greet a lot of this with a yawn, it’s nothing special or new. Because M-PESA has been enabling this for over a decade, so much so that the mobile money app running on any phone now accounts for over 50% of all GDP transactions in Kenya and is widely used across much of Africa. What is M-PESA? Essentially it’s a mobile money app which was developed originally as a joint venture between Safaricom (Vodafone’s South African subsidiary) and the UK Department for International Development. The name comes from the Swahili pesa meaning money and the original idea began as a development aid project to enable microfinance repayments. Launched in 2007 it is now used by close to 20 million people and the system processes more payments than Western Union does across its entire global network.

What’s gone on, of course, is a classic piece of position innovation where learning has driven improvements and developments, not only to serve the new market but in products and processes to enable it to grow. And it’s created a platform economy, bringing in shops, transport, government services, etc. — and all of this with the innovative support of the central bank. It’s a model which has grown beyond Kenya to have world-wide impact. For example a valuable spin-off has been the use of this technology to enable more efficient aid distribution to help cope with humanitarian crises.

So position innovation matters and should form a key plank in our innovation strategy. It’s at the heart of the innovator’s dilemma — the emergence of innovation at the fringes of your core market was the threat so potently identified by Clayton Christensen. How you deal with that strategic challenge is still a major question — but making sure you spot emerging position innovation early at least buys you time to think through a strategic response.

And for entrepreneurs looking for new opportunities the challenge is simple — spot a market before it exists and then grow it! Not an easy thing to do when you can’t analyse or run focus groups about it. But — as Thomas Cook and later on Tom Gullick found out, being prepared to experiment can pay off handsomely. Which is why it might be worth raising a holiday glass in their direction to remind ourselves of the challenge…

Image: Dall-E via Bing

You can find a podcast version of this here and a video version here

And if you’d like to learn with me take a look at my online course here

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Scale Your Innovation by Mapping Your Value Network

How understanding the players in your game can help you scale successfully

Scale Your Innovation by Mapping Your Value Network

GUEST POST from John Bessant

There comes a time in innovation when you realize you might have taken on something a bit too big. No matter how hard you throw yourself into the challenge, creating value from your idea is going to need a little help. Changing the world, or even a small piece of it, takes a lot of push. That’s the moment when you realize you need ‘complementary assets’ – the ‘who else?’ and ‘what else?’ pieces of your innovation jigsaw puzzle.

It’s a challenge at the very beginning – how to put together a network of people and resources to bring your idea to life? But it’s an even bigger challenge when it comes to scaling innovation – how to get widespread adoption of your ‘best thing since sliced bread’ innovation.

Something which Otto Rohrwedder, the inventor of sliced bread (or more precisely the machine which enabled it) came to understand. He spent fifteen years working to develop and scale his invention and set up the Mac-Roh Company to launch his great idea. Only to see it arrive with more of a whimper than a bang. The bakers to whom he tried to sell it were underwhelmed. They thought the machine too complex for everyday production, it was bulky and took up precious space – and they weren’t convinced of the need anyway. Teetering close to the edge of bankruptcy he persuaded a local baker, Frank Bench, to invest and install the first machine.

On July 7, 1928, the first loaf of commercially sliced bread was produced by the Chillico the Baking Company of Missouri and sold under the brand name Kleen Maid. And while bakers had been skeptical of the benefits local families in the mid-West were much more enthusiastic. As a review in the local newspaper (the Constitution Tribune) put it:

“So neat and precise are the slices, and so definitely better than anyone could possibly slice by hand with a bread knife that one realizes instantly that here is a refinement that will receive a hearty and permanent welcome.

Within two weeks bread sales from the bakery had increased by 2000%! The idea began to take off across the country and two years later the New York-based Continental Baking Company began using Rohwedder’s machines to build an entire business around sliced bread. Their product – Wonder Bread – (and the accompanying marketing campaign) helped lift awareness to a high level. By 1933 almost every bakery in the USA had a slicing machine and 80% of the bread produced in America was sliced

Otto isn’t alone; many innovations which ultimately scaled successfully spent a long time in the doldrums, great ideas which drifted because of the lack of partners to give the required momentum. J. Murray Spangler’s invention of the electric vacuum suction sweeper nearly wheezed its last before it could make it into everyday home use. It was only when he connected with William Hoover that the venture took off. Mark Twain’s enthusiasm for the typewriter was that of an early adopter but the only way Christopher Sholes and his colleagues could get their machine to a widespread market was by teaming up with the experience of the Remington company who understood mass production, marketing, logistics and all the other ‘complementary assets’ they needed to scale their innovation.

And Earl Tupper’s brilliant bit of alchemy in turning black sludge waste from oil wells into brightly colored polypropylene storage vessels signally failed to impress American families until the link-up with Brownie Wise who brought her social marketing skills literally to the party. Home demonstrations via a social get-together not only accelerated sales but also laid the foundation for a powerful new addition to the marketing repertoire.

So scaling innovation is a multi-player game. We’ve learned that to create value at scale needs a network – but importantly one which goes beyond the sum of its parts. Systems have ‘emergent properties but these only emerge if there is an organizing energy to enable the process. And they need to share a common purpose, reflected in the current discussion of innovation ‘ecosystems’ , a concept which comes originally from biological science and refers to the complex of a community of organisms and its environment functioning as an ecological unit

It’s been applied in many branches of natural science with the same focus on an interdependent collection of elements with a shared goal or purpose, for example in geography:

An ecosystem is a geographic area where plants, animals, and other organisms, as well as weather and landscape, work together to form a bubble of life… Every factor in an ecosystem depends on every other factor, either directly or indirectly. (National Geographic Encyclopedia)

It’s pretty clear that ecosystems don’t just happen; in the physical world they take millions of years to settle into a viable pattern. And in the world of organizations it’s going to involve much more than just assembling a set of components. It will need active management to secure the emergent properties.

Systems of this kind aren’t just a challenge in the world of commercial innovation. In fact social innovation – making changes to create a better world – requires even more attention to assembling ecosystems which create value. Take the World Food Program, one of the agencies within the United Nations which tries to help deal with the severe and age-old challenge of making sure people get enough to eat. They have a long history of innovation and recent examples include the Optimus programme which aims to improve efficiencies on the supply-chain which eventually makes it possible to feed a hungry child – or not. Optimus uses digital tools to help, and it worked as an effective pilot project back in 2015 in Iraq. But scaling it required many players coming on board and working together, not least national governments. Thankfully the results have moved the needle in the right direction; Optimus now operates in 20 countries including Ukraine, Yemen and Syria, reaching close to 7.5m beneficiaries and with efficiency savings (which equate to more effective food relief) running at over $50m.

So ecosystems matter in the innovation journey to scale. Which introduces three challenges for innovators:

· How to find complementary partners?

· How to form them into a coherent value network?

· How to get that value network to perform as an ecosystem?

All three of these rather depend on having a good understanding of who ‘they’ are and the different roles they play. So we need a map and a way of charting our journey to scale using it. We’ve developed a model for our new book about scaling innovation which identifies 9 core roles which entities in a value network can play:

Value Creators

· 1. Value Creators are those who develop new value – the innovators. This can be one organization, a partnership or joint venture, or it can be done across a distributed network. The key aspect of this creation is that it is new value.

· 2. Value Consumers are those who consume the value which our system creates. Although we often talk of ‘the market’ we should remember that such ‘markets’ are often multi-layered. Our innovation might be used by individuals, businesses, organizations or governments. For many products and services, those who gain value from it may not directly purchase it – that’s often the case with public services like education or health.

· 3. Value Captors – so far this looks a simple enough story – value being created and consumed. But there’s another key role here which is occupied by those who capture value from the innovation not by using it, but by being a part of it.

This is where the entrepreneur takes their profit from the risks they have expended. It is investors in the company which launches and sells the product or service. And it’s all the other supply-side players whose complementary goods and services link together to create the offering.

We need these different players to be part of our value network, our ecosystem. But we also need to recognize that they need an incentive – what’s in it for them? Importantly this doesn’t have to be a financial gain or reward – it could also be an investment in learning new approaches or accessing new markets or it could be about reputation and social identity. Think about the brand-building possibilities for companies which help scale social innovations as part of their ESG story.

These 3 entities are ‘bookends’ – the principal players in the value process. But there’s a second set of roles played by ‘movers’ – those entities which enable the process to happen. These include:

· 4. Value Conveyors are players actively involved in the process of adding value to how our solution comes into being and how it is experienced by consumers. Essentially, the value of the innovation grows through the activities they perform. They are more than just channels: their actions actually increase the value of the innovation itself, be it a product or service. Conveyors might be supply side partners upstream or marketing and distribution partners downstream; either way we need them in our ecosystem to ensure value gets created and moved to where it can be consumed.

Brownie Wise’s performances at Tupperware parties were the stuff of legend. She had all sorts of tricks including throwing a container full of tomato soup across the room to demonstrate the strength of the seal (no messy carpets). But her real contribution to the success of the brand was in the role she played as a conveyor, mobilizing an army of other women to act as demonstrators and sales agents across the country.

· 5. Value Channels are passive in the sense that, like roads or railways, they exist as infrastructure but are independent of the nature of the traffic using them. They are important, necessary elements in scaling but they are not sufficient to assure scale. If they weren’t present or if they are disrupted then value movement couldn’t take place, but they are not active elements in the value creation process. It’s important to think about them not least to explore dependencies and how alternatives might be brought into play.

Think about the huge impact to global value flow when the container ship Ever Given got stuck in the physical channel of the Suez Canal for a week back in 2021! Or the way in which the containers on that ship represented a revolution fifty years earlier in the way that the channel of intermodal transportation (road/rail/sea) operated – Malcolm McClean’s innovation of containerization literally changed the world.

· 6. Sometimes there is a role for Value Coordinators to help to make connections and bring different players together to enact value. For example, a department store offers a physical space in which multiple value creators can connect with value consumers; street markets and large-scale shopping malls offer a similar opportunity. Today’s platform businesses like Alibaba, Amazon or Apple build on this model, providing ‘digital department stores’ across which millions of transactions can take place between creators and consumers.

A third group of players in our value network are those we call ‘shapers’ – because they do just that. They shape the potential amount of value that can be created, consumed, moved and captured within a value network.

· 7. Value Cartographers are the ones who make the maps; they play key roles in structuring a market and determining how much value is possible within a value network. Examples might be regulators, trade unions or influential umbrella organizations. Cartographers can play a major role in accelerating – or slowing – the journey to scale. Think about the current moves towards scaling electromobility; much of the journey to scale will be influenced by the regulatory roadmap. Policies like subsidies or tax relief on electric vehicles, or those which militate against fossil fuels, will provide acceleration – for example, the UK has a target of no new cars running only on fossil fuels by 2035. Equally, legislation to ensure compliance can slow down scaling possibilities – think about the EU’s stance on genetically modified organisms which has acted as a brake on investment and exploration of this technology.

· 8. Value Competitors compete with us for the attention of value consumers. They might be direct competitors offering a similar product or service or they might be indirect competitors – for example Netflix is not only in competition with other streaming services but with other ways in which people might allocate their attention– reading, sleeping, looking at their partner while having a conversation. The important thing is that these competitors all shape the context in which value creation/consumption can take place.

· 9. Lastly we have Value Complementors – entities which complement the value an innovation offers. Sometimes they are essential: Thomas Edison’s attempts to revolutionize domestic lighting arrangements depended on having something (an electricity supply) into which users could plug his new light bulb innovation. Bluetooth devices like intelligent earphones depend on having the technology available and operating to a common standard.

So nine different roles which may be present in a value network. Some are obvious – for example, we clearly need a value creator and a value consumer to bookend our model. But even here the lines can blur. Consumers can also play a role as creators – think about what Lego has done with its efforts to engage users as co-creators. GiffGaff is a small but highly successful player in the tightly competitive world of mobile phone networking; its excellent customer service record is in no small measure down to the way in which it has engaged its community of consumers to play this role…

And some are less obvious but important. Take cartographers and the ways in which they can make or break scaling efforts. Mobile money is still an exciting new field for apps and hardware players – yet it’s been a reality in east Africa for over a decade. M-PESA has been a transformational innovation and has scaled around the world – but its early success depended critically on the support of the central bank rather than its opposition to newcomer ideas. It helped create a fertile regulatory landscape within which mobile money could develop and scale.

Sometimes these roles are emergent – for example the TV and movie industry is increasingly interacting with fans who organize themselves into active communities whose activities and opinions can influence (for better or worse) the scaling possibilities of a core offering. Think about the role played by the ‘Star wars’ community with its conventions, costumes and huge online presence. This is not directly controlled by the film companies but instead exists alongside it, complementing the rate and direction of development. Fans of this kind increasingly play a role in creating new characters and backstories for fringe players who later make it to the mainstream of the media offerings – think about some of the Star Wars spin-offs. Robert Jenkins work atMIT has been tracking the huge influence such fandom has on innovation in the creative industries.

It’s useful to think in terms of the different roles we need and how they might interact, first to help us in our hunt for finding partners. But we also need to form them into viable ecosystems – each system has different configurations but drawing a system boundary is a good starting point. Then we have to work with them to create high performing ecosystems – and this is where the work really starts. It’s about creative relationship building, getting to win-win partnerships.

Which is another story, one which we’ll follow up in a future post.

You can find out more on the model and our approach in The Scaling Value Playbook, published shortly by de Gruyter.

Image Credits: John Bessant, Ian Gray, Pixabay

You can find a podcast version of this here and a video version here

And if you’d like to learn with me take a look at my online course here

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Time for Innovation

Why keeping an eye on the clock matters in the world of bright ideas

Image: Dall-E via Bing

GUEST POST from John Bessant

On 29th September 1707 a fleet of 21 ships under the command of Admiral Cloudesley Shovell was returning from Gibraltar where it had been supporting action during the long-running war with the French. Crossing the Bay of Biscay the weather grew worse and they were struggling to make their home port of Plymouth in the south-west of England. At around 6pm they believed they were in safe waters but in fact were heading on to the rocks near St Agnes’s Bay in the Scilly Islands — fifty miles west of where they thought they were. Four ships were lost in the disaster including HMS Association, the flagship of the fleet which carried Sir Cloudesley and over 1400 other sailors to their deaths. It was one of the worst naval disasters to befall the British Navy.

And an avoidable one. The problem — which urgent follow-up enquiries highlighted — was familiar. The ships were lost because the experienced seamen steering them didn’t know where they were. Navigating the rocky coastline with hidden shelves and shallows depended on accurate awareness of position — but the methods available at the time weren’t up to it. Depth soundings could help but the key missing ingredient was an accurate measurement of longitude. For which they needed a reliable timepiece on board; despite an array of clocks and pocket watches the technology wasn’t good enough to maintain an accurate sense of the time relative to the Greenwich clock on which all naval longitude is based. Time slipped away — and with it any clear sense of where they were.

Cue one of many early innovation contests — attempts at crowdsourcing a good solution to the problem as fast as possible. The British government offered a huge prize of £20,000 in 1714 equivalent in today’s money to around £3m) to anyone who could construct a clock that would enable sailors to calculate their longitude at sea with an accuracy of within half a degree. It was famously won by John Harrison, a carpenter by trade who spent over twenty years working on the problem, producing four models of chronometer each improving on the previous one. His H4 model finally achieved the accuracy and reliability required and he duly won the prize. More important he — and the many others working on the problem — changed the face of seaborne navigation forever.

Image: Dall-E via Bing

We’re used to thinking about the Industrial Revolution in terms of Britain as the ‘workshop of the world’, driven by a steady stream of manufacturing technology innovations coming from men like Arkwright, Wedgwood, Boulton and Watt. But we should add the clockmakers to that list; without them the workshop of the world would not have been able to get its wares reliably to anywhere but the closest markets. Their innovation heralded the first wave of globalisation in world trade and we’re still building on that legacy.

Nor was their effort confined to seaborne navigation in its impact; with reliable clocks it became possible to standardise time itself. Prior to 1880 different cities in the UK kept different versions of time, each geared to a local standard timepiece. But the introduction of standardised time, all linked to Greenwich Mean time allowed for important shifts like the expansion of railways with trains running on a clear and predictable timetable.

Time is in many ways a key part of the enabling infrastructure, a foundation on which so much innovation can be built. Like today’s internet it enables things to happen which would not have been possible before — and in similar fashion the early days spent innovating towards a reliable infrastructure represent an important but often neglected innovation history.

So time deserves credit as a macro-level innovation enabler — but it also has an impressive history at the micro-level in terms of its innovation impact. In 1909 Frederick Taylor published his book on ‘The principles of Scientific Management’ which became, (in the view of the 2001 members of the Academy of Management) the most influential book on management ever. His principles laid the foundations for the ways in which factories and later many service businesses were constructed and operated and paved the way for Henry Ford’s mass production model. At heart the approach involved applying rigorous engineering principles to the flow and execution of activities throughout a process and they still underpin much of the industrial engineering curriculum today.

Its impact was huge — for example in Ford’s Highland Park factory where he began experimenting towards the model using Taylor’s ideas, the productivity gains were stunning. In the first assembly line, installed in 1913 for flywheel production for the Model T, the assembly time fell from 20 man minutes to 5. By 1914 three lines were being used in the chassis department to reduce assembly time from around 12 hours to less than 2.

Model A Ford 1928 Wikimedia Commons

Key contributors to enabling this to happen were an American couple, Frank and Lilian Gilbreth. They worked on what became known as ‘time and motion study’, analysing and breaking down work processes into individual motions, and then eliminating unnecessary motions to improve efficiency. (They also followed in the above illustrious tradition of creating reliable timepieces, in their case developing the micro-chronometer, a clock that could record time to the 1/2000th of a second).

The image of stop watches and clipboards goes back to their influence — and while (like Taylor) their work often receives a negative press (think Charlie Chaplin in the film ‘Modern Times’ in which he is literally caught up in the machine and under enormous time pressure), the reality is that the Gilbreth’s enabled major improvements not just in productivity but in working conditions and employee satisfaction.

They were early but key figures in what later became ‘lean thinking’ — essentially reducing unnecessary waste, especially in movement. Ergonomics owes a lot to their measurement approach which charmingly gave us a unit of measurement — the ‘therblig’ (Gilbreth spelled backwards) which they applied to analyse a set of 18 elemental motions involved in performing a task in the workplace. These elements include movements such as reach, move, grasp, release, load, use, assemble, and disassemble, as well as unnecessary ones like hold, rest, position, search, select, plan, unavoidable delay, avoidable delay, and inspect.

Paying attention to detail, especially around the time taken to carry out a task, and then redesigning it to reduce wasteful effort, movement, queuing, temporary storage, etc. lies at the heart of another revolutionary process innovation — lean thinking. Pioneered in Japanese factories during the post-war years lean is essentially a focus on waste elimination through the application of core principles and key tools. Amongst the ‘seven deadly wastes’ which lean focuses on is time — and not surprisingly the toolkit which emerges from that places a premium on reducing unnecessary expenditure of that precious commodity.

For example one of the early challenges to the emerging car industry was set-up time. With giant machines capable of pressing a piece of steel into the required shape the ability to make different models depends on how quickly those presses can be set-up for a new job. In the early days this typically took up to a day to reset; now (using the widely-applied techniques originally pioneered by Shigeo Shingo and captured in his excitingly titled book ‘Single minute exchange of die — the SMED system’) that time is routinely counted in single minutes.

The implications of this reach far beyond the car factory. Anywhere where rapid changeover of a key resource is needed can benefit from the approach — and has done. Formula 1 pitstop teams can ‘reset’ an entire car with new tyres, fuel and many other changes within seconds. Hospital operating theatres can maximise the productive (and life-saving) time for operations by applying the principles to changeovers. And the revolution in short-haul flying which we have seen in recent decades owes a great deal to the simple performance metric of turnaround time — how fast can a plane land, empty , be cleaned, refuelled and refilled with passengers and take off again? Southwest Airlines have held the crown for years with turnaround times typically around 15 minutes.

Saving time is at one end of an innovation spectrum — it’s worth looking at because wasted time adds no value and saving it enhances productivity. But there’s another end of this spectrum, one which William McKnight discovered in his work at 3M in their early years. It’s all about spending time.

Innovation is about ideas and sometimes coming up with the good ones , the ones which may offer a whole new angle on a problem, needs time for the innovation to incubate. He observed that by giving people a sense of having a little extra time in which they could play around paid off for the company. His 15% policy did just that, giving people the sense that they have time to think and explore without needing to show productivity — the opposite of the tightly-controlled time of the Gilbreths.

(In reality this didn’t cost much in the way of lost productivity since McKnight observed that 15% of a working day, is taken up with coffee and tea breaks, lunch and other time. Plus people don’t religiously take their 15% and then stop thinking about their innovation; most give much more of their own thinking time for free!)

Breakthroughs (of which 3M has many to be proud of) come more frequently if people have time to think — which is why the approach has been successfully adopted by many other organizations. Google, for example, links many major innovations like Gmail to allowing their engineers to spend 20% of their time on their own projects.

There’s another reason why time pressure shouldn’t always be too strong in the innovation area. By its nature innovation is uncertain — which means that we need to experiment and things will go wrong which need time to explore and fix. But sometimes the project level pressure is too strong — prestige, racing the competition, the need to meet performance targets — there are plenty of culprits turning the temporal screws. Think about the fateful Challenger space shuttle explosion back in 1986 which eventually was blamed on a faulty O-ring seal. But importantly — as the Rogers commission of enquiry commented later — it wasn’t the component which was the problem but the system which put so much pressure on the engineers to push past it and press ahead.

That’s sadly not a new tale; the novelist Nevil Shute spent much of his early life working in the aircraft industry and had first hand experience of the race to design an airship. In response to the German dominance with their Zeppelin designs in the 1920s the British government pushed for a challenger and backed two projects, the R-100 which was built on a shoestring by Shute’s company and the other the R-101 which was built with government resources. The latter had all the advantages of unlimited resources and budget but that came with enormous political pressure to get the job done — and fast.

Image: National Archives UK

Sadly on a test flight in 1930 the R101 ploughed into a French hillside killing all on board. Once again the enquiry found that the engineers had been pushed to cut corners and ignore safety concerns; Shute and his fellow engineers had enormous sympathy for the difficult situation in which their R101 colleagues had found themselves. As he describes in his book ‘Slide Rule’

‘The R101 team was working under impossible conditions; they had to design and build an airship that was larger and more complex than anything ever attempted before. They had to meet unrealistic deadlines and specifications imposed by the government. They had to cope with constant changes and revisions to their plans. They had to deal with political interference and public scrutiny…… they were doomed to fail’.

It would be good to think we’ve finally learned this lesson — but the 2022 well-researched Netflix documentary ‘Downfall’ which charts the disastrous history of the Boeing 737-Max points once again at the same kind of time pressure as being responsible for pushing too far too fast.

There are many more places where we can see time playing a role as a key innovation enabler or shaper. For example the challenge to board-level patience in the face of the long slow haul towards bringing innovation impact at scale. Evidence shows it takes a long time to move from pilot success to widespread impact. As Ray Croc (the architect behind the scaling of McDonalds) pointed out, ‘I was an overnight success all right, but 30 years is a long, long night’.

So providing support and commitment over the long-haul is going to be as important as having an innovation team with a clear vision and strategy to undertake the expedition. Not for nothing does the term ‘patient money’ first appear in the findings of the famous Project Sappho study back in the 1970s which looked at factors affecting success and failure in innovation.

Or the challenge of innovation timing — we hear a lot about ‘first mover advantage’ and it would be easy to think that speed is always the key factor. But being too early is often as risky as being too late; pushing untried innovations into the market too soon can sometimes mean being cut by the bleeding edge of technology. And sometimes the innovation is so far advanced it has to wait for the wider infrastructure or for the social or political climate to catch up. Shai Agassi’s vision for making the world a better place through his electromobility solutions is a good example. The collapse what had been one of the world’s biggest start-ups came ten years before the underlying idea (of battery swap technology for electric vehicles) found widespread acceptance in niche markets like city taxi networks in China.

Time is a precious commodity which, used wisely, is a key part of the innovation story. So when you glance at your watch or the little clock running in the corner of your computer screen spare a thought for the innovators, thousands of them over the centuries, who solved the problem of measuring it reliably and accurately.

Additional Image Credit: Wikimedia Commons

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Underground Innovation

How giving people space can make a big difference to your innovation profile

Underground Innovation

GUEST POST from John Bessant

If you’d snuck up behind me last weekend you’d have caught me in the act of painting walls. Not the most exciting of pursuits but it needed to be done so that now I can sit here and write in a freshly-painted room. And importantly one where even my clumsy brushwork doesn’t show in unsightly streaks and overruns. I am amongst millions of painters, professional and otherwise who regularly mutter small votes of thanks to Richard Drew and his invaluable contribution to the world of painting and decorating — masking tape.

This humble but essential innovation is getting on in years but still turns a profit for the company which originated it way back in 1925–3M. But it would never have seen the light of day if company strategy and official policy had prevailed. It exists because of Drew’s late night and unofficial efforts in direct defiance of his boss’s orders.

Drew was working as a technical salesman, dealing with some of the copmpany’s biggest customers for their core product — sandpaper. He spent a lot of time visiting car factories in that newly-growing industry, and in particular the paint shops where sandpaper was used to prepare metal surfaces for painting.

The paint crews were well aware of the good old days when Henry Ford had simplified their job — in 1909 he’d outlined a strategy for his company, which concentrated on a single model (the Model T) which could be built in high volume at low price. Doing this involved a number of trade-offs, not least in terms of massively editing down the choices available to customers. It was at this strategy meeting that he reputedly said ‘Any customer can have a car painted any colour that he wants so long as it is black.’

That decision helped establish the Model T as ‘a car for Everyman at a price every man can afford’, bringing the price down by 75% and putting it within the reach of many people. But it didn’t satisfy the market for long. People wanted more choice in models, styles — and colour schemes. All of which made life more difficult for the skilled craftsmen in the paint shops, trying to deliver ever more exotic paint jobs without slowing down production.

The problem is that when you want to paint with more than one colour then you need to cover up the area you don’t want painted. Which is a clumsy fussy business; early attempts involved using rags, newspapers and scraps of cardboard but then they had to be held in place, making a one-man job into a two-man job. Attempts to solve this by using sticky tape to hold the mask in place also failed; the solvents in the paint dissolved the adhesive on the tape making the whole mask slip and slide all over the surface.

An Innovation Dust-up

Which is where Richard Drew came in, trying to sell a new kind of sandpaper which 3M had launched which offered to cut down the dust created when preparing a metal surface for painting. Hearing some choice language coming from one corner of the shop he walked over to ask what the problem was — to be given an expletive filled tutorial in how not to mask up a paint job. What was needed — he was told in no uncertain terms — was a better adhesive tape which would actually stick and stay stuck!

He went back to his office and began to tinker around with various formulations to try and make something suitable. His boss wasn’t too pleased, ordering him to get back to his main job of selling sandpaper — but he kept on with the quest.

It took him two years and involved a variety of vegetable oils, chicle, linseed, various resins, glue, glycerine and treated crepe paper. What he eventually came up with was a tape strong enough to stick to the surfaces but easy enough to peel off without leaving any scars on the paintwork. Despite its promise his boss wouldn’t allow him to buy the machinery he needed to produce it in quantity — so Drew turned his innovative skills to the problem of financing capital equipment. He bought his machinery in small pieces, each of which cost less than the $99 he was permitted to spend on an item of equipment., and then assembled the machine himself.

This last act finally convinced his boss to let him go ahead — and also provided a lesson which became a company mantra. The boss in question was William McKnight and he made a key policy out of the experience. “If you have the right person on the right project, and they are absolutely dedicated to finding a solution — leave them alone. Tolerate their initiative and trust them.”

And so 3M’s ‘bootlegging’ approach was born, and it persists today embodied now in formal company policy. Give people permission to play around, don’t control them too tightly and let their natural creativity and entrepreneurship do the rest. Their 15% policy (allowing employees to spend up to 15% of their time in pursuit of their own ideas and hunches) has been responsible for thousands of product and process innovations, a few of which (like PostIt Notes) have gone on to be breakthrough radical innovations.

Operating Below the Radar

The masking tape story is a classic example of innovation happening below the radar screen (except the radar wasn’t invented in 1925!). We know today that smart companies who care about innovation invest in the capacity for innovation — R&D and market research, future scoping, etc. Organized innovation, buying themselves options on the future. All good — but maybe only focusing on the formal means potentially missing out on what might be happening underground. Because by their nature people are innovators, prone to experiment and tinker around, frustrated with aspects of their work which they think a little hacking around the edges might help them with. Why not tap into this as another source of innovation?

(Especially since it’s actually not that expensive in terms of lost productive time. The origin of the 15% figure at 3M was McKnight’s the observation that this was the time people spent on coffee breaks and on lunch breaks and so on, times when they could do some of this unofficial innovation).

It’s not just the benefits in terms of the possible product and process innovations which it might lead to. It’s also a powerful motivator, something which can help retain and inspire employees. Allowing people time and space to explore communicates a core company value — — it’s an invitation to tinker to hack things, to play around. And it has certainly paid off for 3M and other companies; consider these examples:

  • The Sony PlayStation started as a bootleg project by Ken Kutaragi, an engineer who secretly worked on a video game console with Nintendo without Sony’s approval.
  • The HP DeskJet printer was originally developed by a group of HP engineers who wanted to create a low-cost inkjet printer for personal use. They used bootleg parts and software to build their first prototype, which they hid under a tablecloth when not in use.
  • The first spreadsheet software was created by two programmers Dan Bricklin and Bob Frankston, who worked on their project without any formal support or funding from their employers. They went on to found their own company, Visicalc, which for a while was the market leader in the field.
  • Google’s 20% allowing employees time to spend on personal projects led to several innovations including Google Maps, Google News and Gmail.
  • Toshiba’s pioneering notebook computer was developed by a team of engineers who worked on it covertly for four years. They used their own laptops and software tools to create a prototype that featured innovative elements such as a lightweight design, a long battery life and a high-performance processor. The project was initially rejected by the management, but later accepted after some modifications. Introduced in 1985 it became a global leader in the portable computer market.
  • BMW has a long history of bootleg innovations which have gone on to become success stories. For example the Z1 roadster was developed by a small team of engineers who worked on it secretly for four years. They used their own time and resources to create a prototype that featured innovative elements such as a plastic body, retractable doors and a modular design. The project was eventually discovered by the top management and approved for production in 1986. And the iDrive was developed by a team of engineers who worked on it without any formal mandate or budget, using their own laptops and software tools. They also conducted user tests with their own cars and friends. The project was initially rejected by the management, but later became a standard feature in many BMW models. These projects helped legitimise what the company now calls ‘U-boat’ projects , recognising the value of the bootlegging approach.

Forbidden Fruit

Peter Augsdorfer made a classic study of the phenomenon, reported it in his wonderful book ‘Forbidden fruit’ in which he highlights many examples of such ‘bootlegging’ approaches. (The term originated during the 1920s when the US government banned the manufacture and sale of hard liquor; the measure didn’t have the desired effect of wiping out the industry and sobering up the country. Instead it triggered a wave of illegal but at times highly innovative ways around the problem, essentially driving innovation underground and out of sight . This included hiding illicit liquor down the inside of boots).

Augsdorfer argues that bootlegging can be seen as a form of learning under uncertainty, where employees experiment with new ideas and technologies without formal approval or support. In other words it’s an unofficial extension of the R&D/exploration work which companies need to do anyway.

Importantly it’s an approach which can have other positive benefits for organizations beyond the innovations which its employees create, such as enhancing motivation and employee retention and fostering a culture of internal entrepreneurship. But it has its ‘dark side’; there are negative outcomes including wasting time and resources, violating ethical norms and — a big challenge for those trying to ‘manage’ it — undermining organizational control and co-ordination frameworks.

Innovation Missionaries

Augsdorfer orginally wrote about this 25 years ago but a recent article in the Sloan Management Review reminds us that such underground innovation is alive and well. It’s not a case of ‘one size fits all’ and their article highlights a number of different approaches. It also usefully identifies three key archetypes of characters who may be innovators of this kind. They call them ‘missionaries’, ‘users’ and ‘explorers’.

Missionaries have a particular interest in the development of the company; their self-adopted ‘mission’ is to improve things. Characters like Richard Drew would fall into this category, seeing their own progress as being tied up with the fortunes of the company they work for and tapping into its resources to help them achieve their goals.

User innovators are essentially frustrated in what they are doing — they develop hacks and work arounds to solve problems particularly in the area of process innovation and their ideas can often be surfaced through suggestion schemes and other mechanisms.

And explorers are concerned with pushing the frontiers of what they do, sometimes going in directions which the company does not believe is possible. The risk here is that they pursue their ideas too far, detracting from their mainstream work and official company strategy.

Making Space for Innovation

So what makes underground innovation work? It’s not simply waving a magic wand, Harry Potter style, and casting the ‘Innovate!’ spell. Instead a number of things need to come together:

  • Allowing space — time, access to resources, etc. The exact amount — 15, 20 or even higher percentages of time — is irrelevant. It’s the signal that matters, communicating that it is OK to experiment around the edges and that there won’t be negative consequences for such action. What often happens is that this small amount of investment encourages employees to spend much more of their own time and initiative, often working long unpaid hours in pursuit of their ideas. At the limit (as Paula Criscuouolo and her colleagues point out) there are good examples of bootlegging arising from contexts in which there is no formal space or time allocation but an underlying perception that it is still OK to ‘dig around a little’.
  • Giving boundaries — defining the space within which innovation is possible and permission to explore there. For example we don’t necessarily want bootleg innovation in the formulation of pharmaceutical products but that leaves plenty of scope for other ideas, particularly in process innovation.
  • Establishing a development pathway to pick up on bootleg ideas. There’s no point stimulating lots of bootlegging behaviour if employees have nowhere to channel their ideas once they start to develop. In the case of 3M there’s a clear pathway which allows employees to take bright ideas and pitch for varying amounts of internal funding and other resources to grow and scale their innovations. Such functionality is increasingly built into innovation collaboration platforms and many companies — such as Liberty Global with their Spark programme — have established employee entrepreneurship pathways in parallel to their suggestion schemes.
  • Communicate trust as a core value — allowing bootleggers to feel a sense of psychological safety about what they are doing and that they will not be penalised for their activities.
  • Reward and recognise — it’s no coincidence that one of the things about 3M is that the people who have been involved in developing bootleg projects to fruition are then rewarded not just with resources and money but also with the opportunity to carry their venture forward. One of the two people involved in the development of Post it notes was Art Fry who moved on to run the division for 3M. The originator of the laptop computer within Toshiba similarly went on to run that division of their business.
  • Encourage intelligent failure — the down-side of allowing people to take initiative is that they will make mistakes. Importantly one of McKnight’s famous comments was that Management that is destructively critical when mistakes are made kills initiative. And it’s essential that we have many people with initiative if we are to continue to grow.’

Underground innovation has a lot to offer -but as the above suggests it isn’t a simple matter of mimicking Google or 3M, allocating a percentage of time and then waiting for the magic to happen. Successful organizations make employee involvement a key plank in building their innovation culture; something William Mcknight learned from his experience as Richard Drew’s manager. By 1929 he was running the entire 3M company and he pulled together some of the core principles through which their culture developed — including what he called his ‘Basic rule of management’. It’s deceptively simple and it serves well as a motto for anyone interested in tapping into underground innovation:

“delegate responsibility and encourage men and women to exercise their initiative.”

Image Credits: Pixabay

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A Flop is Not a Failure

Why innovation thrives on being able to reframe

A Flop is Not a Failure

GUEST POST from John Bessant

Mexico City, Olympic Games, 1968. The stadium is packed, the wider world looks on via TV coverage. Everywhere there’s an air of expectancy but also an awareness that at such high altitude it’s going to be hard for athletes to beat their best. Records are there to be broken, you have to hope for something special.

And in the high jump event they weren’t disappointed. The record for men’s high jump had hovered around 2.23 m for several years. But a young 21-year-old was about to change that; Dick Fosbury, representing the USA broke this with a height of 2.24 m and won the gold medal.

What was so spectacular was not just the achievement but the way it was accomplished. Unlike other athletes who did the (apparently obvious) thing of running and then jumping over the bar, swinging one leg behind the other, Fosbury paused at the moment of jumping, turned his back and flopped over it backwards. Why would anyone do that?

Fosbury had an answer — he’d been working on it for five years before his Mexico success. He’d been frustrated with the limits of the traditional ‘straddle’ jump and experimented with alternative ways of getting over the bar, finally hitting on and perfecting his backwards approach. The big advantage of doing this was that it gave him a lower and different centre of gravity and allowed for more clearance over the bar.

The ‘Fosbury flop’ as it quickly became known opened up new possibilities for the sport; within ten years it had become the dominant mode for all jumpers and helped move the world record to 2.45 m which was set in 1993 by Javier Sotomayor. These days anyone attempting the high jump has come to resemble the ‘fish flopping on the deck of a boat’ as one newspaperman described Fosbury’s Mexico model.

John Bessant Doodly Image

What Fosbury’s feat reminds us of is the power of reframing in innovation. Innovation can take place anywhere along a continuum from doing what we do better — incremental — to doing something completely different — radical. And it can cover what we offer the world — product or service — and the ways we create a deliver that offering — process. That gives us plenty to keep us busy in our innovation day.

But sometimes we can reframe, look at what we’re doing in a different way, identify novel approaches. For example we can rethink the positioning of our innovation — opening up a new market segment or moving into a new geographical area. There’s plenty of learning and pivoting involved in doing that — as Netflix discovered when it began to extend its offer from the USA to Canada and then Europe and beyond.

We can be more radical and change the story we tell and who we tell it to — think about Starbucks and others and the way they repositioned coffee from a simple hot drink to something consumed in as many varieties and combinations as fine wine. Or Haagen Dasz and others who reframed the idea of ice cream as a sensuous adult pleasure rather than as a treat for kids on hot days. Or Henry Ford, bringing the motor car from the small luxury goods market to being a ‘car for Everyman at a price every man can afford’.

This kind of reframing opens up new possibilities but poses new challenges. Just as Fosbury and his followers had to rethink so much of their approach and learn new tricks (not least about where and how to land!) so this kind of position reframing requires major modifications to our product/service offering and our delivery processes.

Think about low-cost airlines — if your main idea is to offer flights at half the price of your competitors, you’ll quickly find out how fast you can lose money. The only way you can make that model work, selling seats to a market who otherwise couldn’t afford to fly will be to radically change your processes, stripping costs and complexity out of everything from booking to check-in, to boarding right through to turnaround time management. Master those tricks and you not only have a viable business model, you’ve got something which the rest of the pack have to catch up with.

But reframing doesn’t stop there; business model innovation is a very hot topic these days and at heart it is finding ways to change the game by replacing one business model with an alternative. Business models set out the architecture through which an innovation can deliver value– for which market segments, with which value proposition and so on. Business model innovation is all about replacing that system with a different better one.

We’ve got plenty of examples of this happening — think about Uber or AirBnB and how they’ve not only become successful new models themselves but also offered templates for others to use in different fields. Or what Spotify and the music streaming services have done to entertainment by changing the model from ownership to rental.

It’s the same with capital goods makers like Caterpillar or Rolls Royce. Instead of selling products on a one-off basis they now offer the functionality of those products to their customers on a rental basis, charging them for ‘power by the hour’ for example.

Once again such reframing isn’t trivial, it drives innovation in product and service and it requires major rethinking about the processes which create and deliver such service. If Rolls-Royce, General Electric and others are being paid for the number of hours their engines are keeping airliners in the air then they need to work hard to ensure that they are reliable and well-maintained. So, they’ve had to innovate in their products to improve reliability through intelligent condition monitoring, they’ve had to install skilled staff at airports making sure engines are quickly and regularly checked and serviced and they’ve had to rethink their financial and support operations to reflect the changed approach.

Beyond all of this comes the possibility of completely reframing the whole approach to innovation — innovation model innovation. Sometimes it’s not enough just to tweak and adapt the product or service development pathway or revise arrangements for process improvement. Sometimes there’s a need for a radical rethink.

A good example of this is the experience of Procter and Gamble and their emerging response to the opportunities and challenges posed by ‘open innovation’. Faced with a world in which ‘not all the smart people work for you’ they reframed their approach to creating thousands of new products from one which had dominated a century and a half of growth through Research and Develop. They replaced it with a new strategic approach to innovation, with the deceptively simple label of ‘Connect and develop’.

The challenge was easy to express and CEO Alan Lafley did so in 2000 when he launched the program. In the future P&G would get 50% of its innovations from outside as distinct from the previous model which was 100% home grown. Simple to say but it has taken then 25 years to turn the challenge into a viable and successful new model. On the way they’ve had to re-engineer so much, finding ways to identify and filter external ideas, to assimilate them and deploy that new knowledge in new directions for the business and simultaneously to make better use of knowledge which P&G had created and then never found a home for.

There’s a useful Greek word — paradigm — which can be used to describe the way we see the world. It’s like the mental spectacles through which we see which problems to focus on and which solutions might be relevant. Change the spectacles — reframe to a new paradigm — and everything looks different, opening up new and fruitful possibilities. It’s an idea which has been put forward by Thomas Kuhn the philosopher of science to explain how our thinking progress follows a pattern of ‘punctuated equilibrium’ — long periods of working within a particular frame followed by a transition to a new way of looking and thinking.

Paradigm innovation is powerful and influential; it changes the world. Which might be a fitting epilogue to the fulsome obituaries which have appeared in response to the sad news of Dick Fosbury’s death last month. He was a true innovator and he changed the way athletes thought about their challenge, helping them aim and reach higher.

Image Credits: Eugene Register-Guard (From the Medford Star-Tribune, 1964), John Bessant (Doodly)

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Our Innovation is All on Tape

Why Old Technologies Are Sometimes Still the Best Ones

Our Innovation is All on Tape

GUEST POST from John Bessant

Close your eyes and imagine for a moment a computer room in the early days of the industry. Chances are you’ll picture large wardrobe-sized metal cabinets whirring away with white-coated attendants tending to the machines. And it won’t be long before your gaze lands on the ubiquitous spools of tape being loaded and unloaded.

Which might give us a smug feeling as we look at the storage options for our current generation of computers — probably based on some incredibly fast access high-capacity solid state flash drive. It’s been quite a journey — the arc stretches a long way back from the recent years of USB sticks and SD cards, external HDDs and then the wonderful world of floppy discs, getting larger and more rigid as we go back in time. The clunky 1980s when our home computers rode on cassette drives, right back to the prehistoric days where the high priests of mini and mainframes tended their storage flock of tapes.

Ancient history — except that the tape drive hasn’t gone away. In fact it’s alive and well and backing up our most precious memories. Look inside the huge data farms operated by Google, Apple, Amazon, Microsoft Azure or anyone else and you’ll find large computers — and lots of tape. Thousands of kilometres of it, containing everything from your precious family photos to email backups to data from research projects like the Large Hadron Collider.

It turns out that tape is still an incredibly reliable medium — and it has the considerable advantage of being cheap. The alternative would be buying lots of hard drives — something which increasingly matters as the volume of data we are storing is growing. Think about the internet of things — all those intelligent devices, whether security cameras or mobile phones, manufacturing performance data loggers or hospital diagnostic equipment, are generating data which needs secure long-term storage. We’ve moved long past the era of measuring storage in kilobytes or megabytes; now we’re into zettabytes, each one the equivalent of to 250billion DVDs. In 2020 estimates suggest we produced close to 59Zb of data, projected to rise to 175zb by 2025! Fortunately IBM scientist Mark Lantz , an expert in storage, suggests that we can keep scaling tape and doubling capacity every 2.5 years for the next 20 years.

Plus tape offers a number of other advantages, not least in terms of security. Most of the time a tape cartridge is not plugged in to a computer and so is pretty immune to visiting viruses and malware.

In fact the market for magnetic tape storage is in robust health; it’s currently worth nearly $5bn and is expected to grow to double that size by 2030. Not bad for a technology coming up on its hundredth anniversary. Making all of this possible is, of course, our old friend innovation. It’s been a classic journey of incremental improvement, doing what we do but better, punctuated with the occasional breakthrough.

It started in 1877 when “Mary Had a Little Lamb” was recorded and played on Thomas Edison’s first experimental talking machine called a phonograph; the sounds were stored on wax cylinders and severely limited in capacity. The first tape recorder was developed in 1886 by Alexander Graham Bell in his labs using paper with beeswax coated on it. This patented approach never really took off because the sound reproduction was inferior to Edison’s wax cylinders.

Others soon explored alternatives; for example Franklin C. Goodale adapted movie film for analogue audio recording, receiving a patent for his invention in 1909. His film used a stylus to record and play back, essentially mimicking Edison’s approach but allowing for much more storage.

But in parallel with the wax-based approach another strand emerged in 1898, with the work of Voldemar Poulsen, a Danish scientist who built on an idea originally suggested ten years earlier by Oberlin Smith. This used the concept of a wire (which could be spooled) on which information was encoded magnetically. Poulsen’s model used cotton thread, steel sawdust and metal wire and was effectively the world’s first tape recorder; he called it a ‘telegraphone’.

Which brings us to another common innovation theme — convergence. If we fast forward (itself a term which originated in the word of tape recording!) to the 1930s we can see these two strands come together; German scientists working for the giant BASF company built on a patent registered to Fritz Pfleumer in 1928. They developed a magnetic tape using metal oxide coated on plastic tape which could be used in recording sound on a commercial basis; in 1934 they delivered the first 50,000 metres of it to the giant electronics corporation AEG.

The big advantage of magnetic recording was that it didn’t rely on a physical analogue being etched into wax or other medium; instead the patterns could be encoded and read as electrical signals. It wasn’t long before tape recording took over as the dominant design — and one of the early entrants was the 3M company in the USA. They had a long history of coating surfaces with particles, having begun life making sandpaper and moved on to create a successful business out of first adhesive masking tape and then the ubiquitous Scotch tape. Coating metal oxide on to tape was an obvious move and they quickly became a key player in the industry.

Innovation is always about the interplay between needs and means and the tape recording business received a fillip from the growing radio industry in the 1940s. Tape offered to simplify and speed up the recording process and an early fan was Bing Crosby. He’d become fed up with the heavy schedule of live broadcasting which kept him away from his beloved golf course and so was drawn to the idea of pre-recording his shows. But the early disc-based technology wasn’t really up to the task, filled with hisses and scratches and poor sound quality. Crosby’s sound engineer had come across the idea of tape recording and worked with 3M to refine the technology.

The very first radio show, anywhere in the world, to be recorded directly on magnetic tape was broadcast on 1 October 1947 featuring Crosby. It not only opened up a profitable line of new business for 3M, it also did its bit for changing the way the world consumed entertainment, be it drama, music hall or news. (It was also a shrewd investment for Crosby who became one of the emerging industry’s backers)

Which brings us to another kind of innovation interplay, this time between different approaches being taken in the worlds of consumer entertainment and industrial computing. Ever since Marconi, Tesla and others had worked on radio there had been a growing interest in consumer applications which could exploit the technology. And with the grandchildren of Edison’s gramophone and in the 1940s the work on television, the home became an increasingly interesting space for electronics entrepreneurs.

But as the domestic market for fixed appliances grew saturated so the search began for mobile solutions. Portability became an important driver for the industry and gave rise to the transistor radio; it wasn’t long before the in car entertainment market began to take off. An early entrant from the tape playback side was the 8-track cartridge in the mid-1960s which allowed you to listen to your favorite tracks without lugging a portable gramophone with you. Philips’ development of the compact cassette (and its free licensing of the idea to promote rapid and widespread adoption) led to an explosion in demand (over 100 billion cassette tapes were eventually sold worldwide) and eventually to the idea of the Walkman as the first portable personal device for recorded and recording music.

Without which we’d be a little less satisfied. Specifically we’d never been introduced to one of the Rolling Stones’ greatest hits; as guitarist Keith Richards explained in his 2010 autobiography:

“I wrote the song ‘Satisfaction’ in my sleep. I didn’t know at all that I had recorded it, the song only exists, thank God, to the little Philips cassette recorder. I looked at it in the morning — I knew I had put a new tape in the night before — but it was at the very end. Apparently, I had recorded something. I rewound and then ‘Satisfaction’ sounded … and then 40 minutes of snoring!”

Meanwhile back in the emerging computer industry of the 1950s there was a growing demand for storage media for which magnetic tape seemed well suited. Cue the images we imagined in the opening paragraph, acolytes dutifully tending the vast mainframe machines.

Early computers had used punched cards and then paper tape but these soon reached the limit of their usefulness; instead the industry began exploring magnetic audio tape.

IBM’s team under the leadership of Wayne Winger developed digital tape-based storage; of particular importance was finding ways to encode the 1s and 0s of binary patterns onto the tape. They introduced the commercial digital tape recorder in 1952, and it could store what was (for its time) an impressive 2mB of data on a reel.

Not everyone was convinced; as Winger recalled, “A white-haired IBM veteran in Poughkeepsie pulled a few of us aside and told us, ‘You young fellows remember, IBM was built on punched cards, and our foundation will always be punched cards.’ Fortunately Tom Watson Jnr, son of the company founder became a champion and the project went ahead.

But while tape dominated in the short term another parallel trajectory was soon established, replacing tapes and reels with disc drives whose big advantage was the ability to randomly access data rather than wait for the tape to arrive at the right place on the playback head. IBM once again led the way with its launch in 1956 of the hard disc drive and began a steady stream of innovation in which storage volumes and density increased while the size decreased. The landscape moved through various generations of external drives until the advent of personal computers where the drives migrated inside the box and became increasingly small (and floppy).

These developments were taken up by the consumer electronics industry with the growing use of discs as an alternative recording and playback medium, spanning various formats but also decreasing in size. Which of course opened the way for more portability with Sony and Sharp launching mini-disc players in the early 1980s.

All good news for the personal audio experience but less so for the rapidly expanding information technology industry. While new media storage technology continued to improve it came at a cost and with the exponential increase in volumes of data needing to be stored came a renewed interest in alternative (and cheaper) solutions. The road was leading back to good old-fashioned tape.

Its potential was in long-term storage and retrieval of so-called ‘cold data’. Most of what is stored in the cloud today is this kind — images, emails, all sorts of backup files. And while these need to be around they don’t have to be accessed instantly. And that’s where tape has come back into its own. Today’s tapes have moved on somewhat from IBM’s 1952 limited 2mB of capacity version. They are smaller on the outside but their capacity has grown enormously — they can now hold 20Tb or even if compressed 60pTb — that’s a 10 millionfold increase in 70 years. The tapes are not wound by hand on to capstans but instead loaded into cartridges, each of which hold around a kilometer of tape; companies use libraries containing tens of thousands of these cartridges which can be mounted via automated systems deploying robots. This process takes around 90 seconds to locate a cartridge and access and load the tape, so you could be forgiven for thinking that it’s a bit slow compared to your flash drive which has an access time measured in milliseconds.

There’s a pattern here — established and once important technologies giving way to the new kids on the block with their apparently superior performance. We’ve learned that we shouldn’t necessarily write the old technologies off — at the minimum there is often a niche for them amongst enthusiasts. Think about vinyl, about the anti-mp3 backlash from hi-fi fans or more recently photography using film and plates rather than their digital counterparts.

But it’s more than just nostalgia which drives this persistence of the old. Sometimes — like our magnetic tape — there are performance features which are worth holding on to — trading speed for security and lower storage cost, for example. Sometimes there is a particular performance niche which the new technology cannot enter competitively — for example the persistence of fax machines in healthcare where they offer a secure and reliable way of transmitting sensitive information. At the limit we might argue that neither cash nor physical books are as ‘good’ as their digital rivals but their persistence points to other attributes which people continue to find valuable.

And sometimes it is about the underlying accumulated knowledge which the old technology represents — and which might be redeployed to advantage in a different field. Think of Fujifilm’s resurgence as a cosmetics and pharmaceuticals company on the back of its deep knowledge of emulsions and coatings. Technologies which it originally mastered in the now largely disappeared world of film photography. Or Kodak’s ability to offer high speed high quality printing on the back of knowledge it originally acquired in the same old industry — that of accurately spraying and targeting millions of droplets on to a surface. And it was 3M’s deep understanding of how to coat materials on to tapes gained originally from selling masking tape to the paint shops of Detroit which helped it move so effectively into the field of magnetic tape.

Keeping these technologies alive isn’t about putting them on life support; as the IBM example demonstrates it needs a commitment to incremental innovation, driving and optimising performance. And there’s still room for breakthroughs within those trajectories; in the case of magnetic tape storage it came in 2010 in the form of the Linear Tape File System (LTFS) open standard. This allowed tape drives to emulate the random access capabilities of their hard disk competitors, using metadata about the location of data stored on the tapes.

Whichever way you look at it there’s a need for innovation, whether bringing a breakthrough to an existing field or helping sustain a particular niche for the long haul. And we shouldn’t be too quick to write off ‘old’ technologies as new ones emerge which appear superior. It’s worth remembering that the arrival of the steamship didn’t wipe out the shipyards building sailing ships around the world; it actually spurred them on to a golden era of performance imporvement which it took steampships a long time to catch up with.

So, there’s often a lot of life left in old dogs, especially when we can teach them some new innovative tricks.

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Innovating Innovation

How Machine Learning is Transforming the Innovation Game

Innovating Innovation

GUEST POST from John Bessant

One of the difficult parts of being a parent is when your kids grow up and you lose the excuse to play with their toys. And in my case one that I particularly miss is the Transformer series. Originally developed in the 1980s and accompanied by a TV spin-off these robots could masquerade as ordinary vehicles like cars and oil tankers. And then, at a crucial moment, they could reassemble themselves into well-armed fighting robots able to save mankind on a weekly basis from all sorts of alien threats. The toys were masterpieces of engineering; the underlying story clearly had staying power since there is a new generation of transformers (and video /movie accompaniment) today.

For their time they were symbols of the power of transformation, being able to adapt and repurpose to deal with new challenges. And these days we have a much more powerful and real example of such power in the form of a new generation of machine learning models.

Machine learning has its roots back in experiments with ‘artificial intelligence’ in the 1970s but has come to represent a powerful technological trajectory as the idea of mimicking human neural networks and their learning capabilities has been explored. We’ve seen with increasing frequency many bastions fall to these models; it seems a lifetime ago (1996 actually) that IBM’s Deep Blue beat chess champion Gary Kasparov deploying something of a brute force approach. But by 2016 Google’s Alpha Go model managed to beat the world champion Lee Se-Dol at the much more complex game of ‘Go’. And recent contests at which machine learning seems to have ‘beaten’ human opponents include those like poker which involve not only strategy but the ability to bluff — essentially requiring computer models to imagine what an opponent is thinking and then generate a diversionary move.

As Jang Dae-Ik, a science philosopher at Seoul National University, told The Korea Herald after AlphaGo’s victory ‘This is a tremendous incident in the history of human evolution — that a machine can surpass the intuition, creativity and communication, which has previously been considered to be the territory of human beings…..Before, we didn’t think that artificial intelligence had creativity…..Now, we know it has creativity — and more brains, and it’s smarter’.

At heart these developments reflect a fundamental shift in machine learning applications and models. In the early days models were used to help with highly focused activities — for example applied in data mining where they might be searching for something specific. But now we have generative AI, which does what it says on the tin — generates something new. And this brings the uncomfortable challenge to our perception of ourselves as the only ones capable of creativity — generating novel and useful solutions to challenges.

A quick review of the growing literature on ‘artificial creativity’ shows that there are grounds for worrying. Machine learning models can now ‘create’ music, literature or visual art to a standard which makes it increasingly difficult to detect its non-human origin.

For example, the Next Rembrandt project was an attempt by a team of art historians, data scientists and engineers to teach a machine to think, act and paint like Rembrandt. The documentary film of this venture highlights the challenges and complexities involved in producing a painting which convinced many — 347 years after the painter’s death!

In similar fashion, there are a number of websites featuring music composed by AI in the style of — and often hard to distinguish from — the original composer. And in 2016 IBM’s Watson AI engine produced a trailer for the horror movie ‘Morgan’. This involved Watson ‘watching’ and analyzing hundreds of examples of trailers and then selecting scenes for editors to patch together into their film. This cut the time for the process from over a week to less than a day.

Which brings us to Chat — GPT and the explosion of interest in this particular model. It was launched by the OpenAI company in November 2022 as the latest in a series of generative models with the capability to come up with its own answers to questions posed to it. (Amongst its predecessors is Dall-E, a powerful image generator). The GPT stands for Generative Pre-Trained Transformer, a class of model which they have been working on for some time.

At its heart the Chat GPT model (and its equivalents in the labs of Google/Alphabet, Meta and many other companies) is a machine learning model trained on billions of facts. It has the ability to explore and analyse those and ‘learn’ how to synthesis coherent and credible answers to questions posed by a very wide and diverse audience. Within two weeks of its launch Chat GPT had attracted over a million users, and the demand is now so high there is a waiting list to access it. People have been experimenting with its capabilities to create songs and poems, write newspaper articles, answer exam questions and even to enter and pass the preliminary tests for people wishing to qualify as medical professionals in the USA!

Not surprisingly OpenAI it has seen its valuation rapidly escalate to around $29bn with Microsoft taking a significant share in the business. It’s likely that the next year will see an explosion of interest in such models with new and better variants and increasing competition from other players.

One area where such models may well have a significant impact is in the field of innovation itself. In an excellent article Frank Piller and colleagues explore this — and the implications for innovation management. They point out that there is already increasing use of generative machine learning models in innovation; these include searching large data sources to identify insights around customer needs and using generative models to create marketing and advertising copy for new products and services.

They map their analysis of where and how such models might be used on to a typical representation of the innovation process — the so-called ‘double diamond’ linked to ‘design thinking’. Here there is a front end concerned with exploring the ‘problem space’ — understanding user needs and potential opportunities. Work at this stage involves divergent exploration followed by convergence, closing in on promising directions. It is linked to a second divergent/convergent diamond linked to exploring the ‘solution space’ and then closing in on projects to be taken further.

Double Diamond Deisgn Process Model

What they were interested in was the ways in which features of machine learning might help with these activities and the possible impact on how innovation is undertaken — and by whom.

A fascinating feature of their research is that they do so not just on the basis of informed speculation but by putting the Chat-GPT model to the test, giving it some innovation challenges to work on. Thinking about the possibilities for new products in the field of camping and outdoor activity they designed three questions to put to the model, looking for whether and how new insights might be generated to help with:

  • Searching through large data sets containing information about potential new directions and trajectories
  • Exploring data on customer experience and searching for new insights into potential needs
  • Helping create new concepts around which innovations might be developed

All of these are typical tasks which innovation teams undertake in organizations; for example they spend a lot of time at the front end researching what has already been done, drawing in knowledge and building a picture of possible problem and solution space. They deploy a wide range of market research tools including various forms of trend analysis. And they work with a range of creativity tools to generate possible solution options for further progression.

It’s early days but the performance of the machine learning model was instructive. In exploring what is known about camping gear a Google search identified 299 million results which certainly exceeds the capacity of even a small army of human researchers to analyze! The Chat-GPT model did a good job in analyzing and pulling out results of possible relevance, providing at least a powerful first-pass filter.

In its second task the Chat-GPT model managed to make sense of a wide range of customer reviews to generate insights into trends and possible needs — so-called ‘sentiment analysis’. Once again its skill in sifting through the text of thousands of reviews showed potential for providing new insights into emerging and hidden customer needs.

And in the field of creating potential solutions the researchers set the model a brainstorming kind of task — to come jup with novel and useful ideas for new camping products. The strategy here is to prompt the model with some examples of typical brainstorming insights and then allow it to learn how to generate its own. Once again the performance on the task was impressive; not only did it come up with plausible incremental innovation ideas, it also generated some radically new ones which opened up new solution space.

At first glance this kind of performance across several areas of the innovation process might seem worrying. Even though there has been a backlash to the wave of enthusiasm around generative machine learning models the overall trajectory looks ominous in terms of its implications for ‘creative’ tasks in organizations. If machine learning continues to improve how long might it be before we no longer need human beings to work in the innovation process?

The reality seems to point more towards a hybrid model in which AI supports human activity — for example by using it to sift through enormous amounts of data and extract potentially relevant information which its human counterparts can then work with. As the researchers conclude, ‘….by expanding the problem and solution spaces in which NPD (new product development) teams can operate, language models create an opportunity to access and generate larger amounts of knowledge, which in turn results in more possible connections of problems and solutions. This should ultimately lead to qualitatively superior solutions and higher innovation performance.’

So can we relax and not worry about the machines taking over our innovation role? Not really —  if we want to take advantage of the powerful hybrid approach which Frank PIller and his colleagues point towards then we need to start learning some new skills and developing some new working arrangements to capitalise on it.

We’re going to need a lot of innovation model innovation.

P.S. In writing this piece I did NOT make use of Chat-GPT, though I was tempted to try! Researching this piece inspired me to write another innovation song:

Image credit: Wikipedia

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Delivering Innovation

How the History of Mail Order Can Help Us Manage Innovation at Scale

Delivering innovation

GUEST POST from John Bessant

2022 was a record year for home delivery of parcels and packages. After the Covid-19 lockdowns the idea of remote shopping became an even bigger reality and changed the behavior patterns of millions. It’s a habit which is hard to break — even when there are increasing disturbances in the delivery end of things like strikes and negative publicity surrounding how packages are actually handled and delivered. Estimates of the market size for this activity vary widely but suggest that it is worth close to $500bn worldwide.

But where did this revolution begin and what’s the innovation history behind remote retailing? For that we need to go back a couple of hundred years and locate ourselves in the beautiful hills of Powys in Wales. In the valley alongside the river Severn is the small town of Newtown, a market center since the 13th century. And in 1856 the home of Pryce Jones, a draper’s assistant who rose to take over the business in which he worked. And for which he had big plans.

He renamed the company the Royal Welsh Warehouse and specialized in selling Welsh flannel. His vision grew out of a belief in the wonderful powers of the soft warm fabric crafted from wool from the sheep he could see on the hillsides all around him. But it was also sharply focused on the potential size of that market — if he could only grow it. Which he did courtesy of two key enabling innovations which reached sufficient maturity to give him the channels to reach his imagined global market.

The channels were the postal system and the railways. Neither was new by this time but they were now coming of age — and enabling hitherto unrealizable dreams to take shape. Back in 1654 Oliver Cromwell had established the idea of a state postal system but it was another 30 years before a reliable system began to operate around the city of London. And another hundred years before Parliament authorized the creation of ‘Penny Posts’ in any town or city; while the idea grew in popularity it was still expensive and local in impact. It wasn’t until the major reforms of the Post Office in 1840 that the idea of a Uniform Penny Post was established, facilitating the safe, speedy and cheap conveyance of letters. With it came the first pre-payment in the form of postage stamps (beginning with the famous Penny Black).

Pryce Jones was quick to spot the possibilities in the newly-emerging postal system and began offering his wares via mail order. The offer was simple; place your order via mail and it will be delivered the next day (effectively anticipating Amazon’s Prime service by 150 years and offering faster delivery!). To explain to his market what he had to offer he developed an illustrated catalogue from which they could choose what they wanted; he launched this in 1861.

He was able to fulfil this delivery promise because the railways had also come of age; from the ‘Rocket’ which George Stephenson demonstrated in 1829 the idea of modern railway network had developed rapidly. The railway came to Newtown and Jones was quick to exploit its possibilities, building a warehouse next to the station and opening his mail order business alongside the post office. He expanded several times and in 1879, he built the Royal Welsh Warehouse, a tall red brick building in the centre of Newtown which still stands today.

His idea paid off; within months his business had started to grow and by the 1880s he had an international operation, counting amongst his patrons included the royal houses of Austria, Britain, Denmark, Germany, Hanover, Italy, Naples, and Russia. Valuable customers not only for their purchases but also for their implicit endorsement. Because Jones wasn’t just skilled at utilising new channels; he also played the role of ‘conveyor’, someone actively encouraging and promoting the use of the new business model along these channels. His mail order catalogue wasn’t simply a price list of items, it was a form of storytelling, complete with pictures and expansive descriptions. He understood the principles of marketing, the need to get consumers to buy into a vision of something which they wanted — and then he was able to fulfil that demand.

(He was also a gifted product innovator; amongst other things he is credited with the invention of the sleeping bag which he patented in 1876 under the name of the Euklisia Rug. He exported the product around the world, at one point landing a contract with the Russian Army for 60,000 rugs.)

Pryce Jones wasn’t alone; like so many innovations the idea of mail order retailing came to several people independently and around the same time, reflecting the changing environment and the enabling technologies. For example in Austria the Thonet family began selling their furniture in 1859 using a mail order catalogue and taking advantage of postal and transport innovations. In fact Pryce Jones’ model was predated by the US luxury goods company Tiffany’s who in 1845 launched their ‘Blue Book’ — arguably the world’s first mail order catalogue though targeted at a very small, select (and wealthy) market.

It wasn’t long before other entrepreneurs began to see the possibilities beyond extending the reach into new markets for particular products. They realised that there was a second side to the new market-place — the suppliers. These days we’re used to seeing examples of ‘platform’ businesses everywhere we look — just glance at your smart-phone to see the array of apps (representing goods and services) being offered across the platform of its shiny screen. But it was 150 years ago that this kind of business model first emerged.

In 1872, Aaron Montgomery Ward from Chicago started his own single-page mail order catalogue; it listed 163 items for sale. He’s credited amongst other things with coining the sales slogan ‘satisfaction guaranteed or your money back!’ The model worked; ten years later the ‘Wish book’ catalogue listed over 10,000 items. Most important was the fact that Ward didn’t manufacture many of these; he effectively created the platform across which the market in multiple goods and services could operate.

In doing so he paved the way for many others spotting and exploiting a similar opportunity. For example in Canada one of the largest department stores was the Eaton Company originally founded in 1869 to sell dry goods, backed by a growing network of factories.

Eaton Company Catalog

Timothy Eaton saw the possibilities in mail order and in 1884 released its 32 page catalogue. He expressed his vision of a network stretching across the sub-continent of Canada in a note accompany the catalogue; “This catalogue is destined to go wherever the maple leaf grows, throughout the vast Dominion. We have the facilities for filling mail orders satisfactorily, no matter how far the letter has to come and the goods have to go.”

And down in North Redwood, Minnesota Richard Warren Sears , a railroad services agent. began a sideline business by purchasing a batch of watches which had been refused delivery and selling them on to local people. In 1886, he used the profits he earned from it to set up a mail-order business selling watches as R.W. Sears Watch Company. That year he met a watch repairman named Alvah Curtis Roebuck and in 1887 the two of them relocated their business to Chicago. In 1888 they launched a printed catalogue offering a range of luxury goods like watches and jewelry; by 1892 this had grown to a 322 page catalogue which included sewing machines, sporting goods, musical instruments, saddles, firearms, buggies, bicycles, baby carriages, and some clothing.

Sears Roebuck

What Sears and Roebuck (and a growing number of others) were doing was developing the new business model of a platform, using the catalogue as the focal point across which remote retailing could expand. But this wasn’t simply a matter of printing and distributing a catalogue; what they were doing was mastering the art of building an ecosystem for retail innovation. They recognized that simply advertising a wide range of products and services to an expectant public would be a very fast way of losing money and reputation. In order to make the system work they needed to pull together a network and get it working to deliver ‘emergent properties’ — where the whole offered more than the sum of the parts.

Making remote retailing work meant finding ways to procure (or manufacture) a wide range of products and then holding them in a warehouse so they are available for quick delivery. But holding stock takes up space and costs money so the trick is to manage the logistics of sales forecasting, order processing and stockholding, plus being able to ensure rapid and reliable delivery. Which places emphasis on reliable channels — as Pryce Jones discovered.

And underneath this web of suppliers and deliverers is the challenge of cash flow — how to ensure enough money comes back into the system fast enough to cover costs and return a profit which helps keep the supply side engaged. New models for financing and payment began to emerge — not least the concept of paying cash on delivery.

The model expanded throughout the world and was often at the heart of a move from remote shopping to direct retail. The origins of the 20th century department store include a sizeable crossover — for example Kastner & Öhler was the first mail order business in Central Europe. The company was founded in 1873 in Austria, releasing its first mail order catalogue in 1885; as it grew it opened its first department store in 1894 and went on the become one of the household names in European retailing.

Mail order was a powerful business model which worked well during most ot the 20th century — but as we’ve learned so often about innovation, nothing lasts forever. New developments opened up new possibilities and it is not always the existing players who are best placed or able to exploit them. In the early 1980s a new channel began to appear — the internet. It opened up not only new opportunities in terms of potential reach, mirroring what Pryce Jones had seen in the emergence of uniform postal systems a century before. But it also changed the underlying thinking behind some of the core warehousing and logistics underpinning the mail order model.

Jeff Bezos was aware of the opportunity and had created a list of possible sectors to target with an internet-based model. He chose books, and quickly realized that he could not only reach a huge market via this new channel but he could also service it without the high costs of actually warehousing and distributing the books. He recognized the ‘long tail’ possibilities; with his model he could reach people with highly specific needs and connect them to suppliers who could meet that need. He also saw that the underlying business model was available to anyone — the advantages would come to those who could scale early and build a platform. As the major bookseller Barnes and Noble pointed out in their submission to legal authorities in their lawsuit of 1997Amazon was not a bookseller at all, it was a book broker.

Where Amazon and others paved the way for a new model to emerge, putting the platform kind of business on steroids, others were slower to recognise and adapt. The German firm Quelle had grown since its founding in 1927 to become one of the biggest mail order operations in Europe, with a dedicated logistics and warehousing operation near the town of Fürth in Bavaria. It was, along with Tempelhof airport in Berlin, one of the largest industrial sites in Europe stretching over nearly 7 hectares. But a failure to adapt fast enough to the rapid changes being brought about through internet retailing meant that by 2006 it collapsed into bankruptcy. All that remains today is the 90m high Quelle-Turm (Quelle Tower) built in 1964 and now preserved as a landmark to a different industrial era.

One of the features of the model Pryce Jones developed was the stimulus it gave to local producers, enabling the region around Newtown to prosper with new businesses. And something very similar has happened with the internet-driven mail order business built across the huge Alibaba platform in China. In 2003 Jack Ma launched the idea of a Taobao marketplace where people could trade goods and services using the ability of the platform to reach a large and distributed market and display content in rich and interesting formats.

This model is comprised primarily of small businesses but has grown to be the largest digital retail platform in the country and has spawned many ‘Taobao villages’ — areas where over 10% of the population is engaged in online retailing. It has had a huge impact on the rural economy; by August 2019 there were nearly 4500 Taobao villages in 25 provinces and estimates suggest up to half of the rural population has benefitted from this. It is equivalent to around 600,000 small shops and trading businesses employing around 10 million people with an economic value of around $195 billion worth of e-commerce sales.

The story is of course not over. With the rising expectations of a growing market for instant delivery has come a challenge and opportunity around the ‘last mile’ challenge — how to move from the digital world to physical delivery of products. And whilst there are many major traditional logistics players now operating in this space there are challenges on the horizon — for example drone delivery or even 3-D printing of a growing range of physical products. The virtualisation process has only just begun though it may still be a while before the Welsh flannel beloved of Pryce Jones emerges spinning out of a 3-D wool printer in our homes.

But perhaps the best kept secret is the one shrouded in Arctic mists and dating back hundreds of years. Somehow a single enterprise (the mysterious S. Claus operation) has managed the challenge of reliable overnight delivery on a global basis to millions of expectant children; there are clearly lessons still to be learned around wish fulfilment innovation.

You can also hear this as a podcast or watch it as a video.

If you’d like more songs, stories and other resources on the innovation theme, check out my website or listen to my podcast. And if you’d like to learn with me take a look at my online course here

Image credit: Wikimedia Commons, Unsplash

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A Letter to Innovation Santa

Ten Essentials for an Innovator’s Christmas List

A Letter to Innovation Santa

GUEST POST from John Bessant

Christmas, as my 6-year old never tires of reminding me, is coming. Never mind that technically it’s a month away and forget the efforts I make, Scrooge-like, not to allow any trace of the season to cross our threshold until at least 1st December. She excitedly points out that everywhere — the TV and online adverts, the shop decorations, even some of our early bird neighbors with their flashing light displays — everywhere the signals are unmistakable. ‘It’s nearly here!’

Which prompts her to write lists, long and getting longer, of gift ideas in case Santa is short of the relevant information about this year’s must-have items without which a six-year old’s world can never be complete. I feel like King Canute, water lapping around my ankles as I desperately try to stem the tide, inevitability fast approaching on my horizon.

In a desperate attempt to distract myself from these seasonal waves I began thinking about the kind of list I might put together for a would-be innovating organization. Assuming there was an innovation equivalent of the old gentleman at the North Pole what might he be working on with his elves right now? What are his stock-pickers pulling off the warehouse shelves and loading up on the sleigh? What might be on the must-have list for an innovation Christmas?

Turns out to be a useful exercise in choice editing. Just like my daughter, my early lists grew and grew like Topsy, sprawling over several pages. And containing lots of items in the ‘Motherhood and apple pie’ class — things which were unarguably ‘good’ for innovation but a bit vague in how they might actually be implemented. ‘Make innovation happen every day in every way’ or ‘Put innovation at the heart of everything you do’, or ‘Keep reinventing the organization’ kind of thing — nice sentiments but not exactly helpful.

Back to the drawing board, trying to focus on things which not only represent important elements but also have some specific tools to help put them into practice. So here’s the result. If you’re looking for inspiration for your seasonal innovation shopping here’s a few ideas that might help. (And if you believe in an Innovation Santa they might be useful items to add to the ‘what I’d really like’ list you’re about to send up the chimney)

First the wrapping paper.

Innovation matters. If we don’t change what we offer the world (our products and services) and the ways we create and deliver them (our processes) then there’s a good chance that we won’t survive long in today’s turbulent market-place. The issue isn’t about whether or not to innovate but how?

The good news is that we’ve learned a lot about this challenge; whilst innovation still remains a risky business there are some key insights which can help stack the deck in our favour. Over a hundred years of research consistently shows that successful innovators

1. Manage innovation as a process.

Innovation isn’t like the cartoon moment with a light bulb flashing on above someone’s head. It’s a journey, involving key steps (search, select, implement) to create value from ideas. Anyone might get lucky once but in order to repeat the innovation trick we need a process for managing this; it doesn’t have to be bureaucratic, but it does have to be systematic. So, to help you work with this one there are plenty of frameworks which you can adapt, checklists to make sure you’ve got a system for innovation — you could do a lot worse than start with the framework which the ISO launched this year for an Innovation Management Standard …

2. Explore all the innovation space available.

There are many different ways to innovate, from changing our offering, updating our processes, exploring new market contexts and even switching our underlying business model. It’s a little like an innovation compass and the challenge is to make sure we explore the full 360 degrees of opportunity. Once again there are plenty of tools to help with this — try looking at Doblin’s ten types of innovation, play with the 4Ps innovation compass or explore Blue Ocean thinking

3. Have an innovation strategy

A clear roadmap of where and how innovation will take the business forward. It’s easy to wave the flag and shout about how important innovation is; serious players think through their strategy for dealing with it, share the roadmap and make sure that people buy into it. And there are plenty of stocking fillers here to help with strategic positioning and analysis, from good old PEST and SWOT through to more thorough future scanning, scenarios and road mapping and discovery-driven planning.

4. Pay attention to the small stuff.

Although radical changes are the ones which hit the headlines the underlying economic evidence is clear; most innovation, most of the time, is about doing what we do a little better. Incremental innovation of this kind adds up and has the additional advantage that it is much lower in risk, advancing slowly along well-known frontiers. This is where the lean toolkit becomes a must-have — whether it’s tools like fishbones and process maps for continuous improvement of processes or value analysis and product feature maps for our offerings.

5. Mobilize the mainstream.

Many organizations have specialists who are given the responsibility for innovation — a bit like James Bond, they have the ‘license to innovate’. But every human being comes fitted with the standard equipment to enable us to be creative, finding solutions to problems and coming up with new ideas. Smart innovators mobilize this creativity across the entire organization. And there’s a rich toolbox to help with this one, from simple variants on the humble suggestion scheme to powerful collaboration platforms to ensure voices get heard, ideas get shared and collective intelligence puts its weight behind the big strategic challenges facing the organization.

6. Make connections.

Innovation has always been a multi-player game rather than a solo act and these days the talk is all about ‘open innovation’. Simply put, in a world rich in knowledge even the largest organization has to recognize that ‘not all the smart people work for us’. The game has shifted from one where knowledge creation and ownership is key to one where managing knowledge flow is the critical ingredient. The good news for smaller firms is that this levels the playing field; you don’t have to have all the resources for innovation as long as you know where they are and how to connect to them. By now some version of ‘open innovation’ should be at the heart of your strategy and there are plenty of tools and frameworks to help you work out what connections you need and how to build them. It might also be worth looking at your absorptive capacity — how well placed are you to take advantage of all the rich knowledge that’s out there, making sure you don’t get a kind of ‘knowledge indigestion’ as a result of gorging yourself on everything that’s on offer!

7. Build an innovative organization.

Companies like 3M and Google are famous for giving their staff time and space to explore and experiment, not just because they are generous employers trying to attract and retain talented employees. What they’re really doing is actively trying to recreate the entrepreneurial spirit which began their businesses. They believe that embedding that spirit in ‘the way we do things round here’ gives them a real long-term edge — everyone is an entrepreneur. But they also know that creating that kind of climate needs work — on the physical layout (to make sure people have the chance to creatively collide) on time (to allow ideas to emerge and incubate), on support and space (to provide fertile environments for creativity) and on their approach to ‘failure’ (not punishing people when things don’t work but encouraging an experimental learning approach). Maybe take a look at some of the tools available to help you assess how much of a creative climate you have — and focus on what you might usefully work on to develop it further.

8. Co-create with users.

Learning from markets has always been important but customers aren’t passive, they can also be a rich source of ideas for innovation. Finding ways to tap into user innovation not only generates more diverse ideas, it also helps create a partnership with the marketplace which improves adoption of innovation. People will use things, work with processes, feel a sense of ‘ownership’ if they’ve been involved in the innovation process. And the good news here is that we have plenty of tools and frameworks to help — starting with design thinking and embracing approaches like lead user methods

9. Accept failure

Innovation is omelet territory and the odd broken egg is an important part. The key is to learn from failures and use the information to build and strengthen capability for the future. That’s been the big lesson coming out of the whole lean -start-up’ model for developing new ventures and it sits just as well inside established organizations who make use of agile approaches. Once again there are plenty of tools which capture this ‘build-measure-learn — pivot’ approach which builds on ‘intelligent failure’ …

10. Build dynamic capability.

Innovation involves a moving target — constant changes in technologies, markets, competition, regulation and a host of other variables. Successful innovators build on the above principles, but they also keep checking and updating their innovation management capabilities, learning new tricks and discarding old ones which no longer work. Innovation model innovation. Having a commitment to structured and constructively critical reflection is a key to this ‘metacognition’ approach — and there are plenty of helpful frameworks to enable and support that process. Check out the Innovation Fitness Test as an example …

One last seasonal thought. Innovation, like a puppy, is for life, not just for Christmas. It’s something we need to think about all year round. So, it might be worth recycling your Christmas innovation list into something you could use as a set of New Year resolutions …

You can find a podcast version of this here

If you’d like more songs, stories and other resources on the innovation theme, check out my website here, or listen to my podcast here, and if you’d like to learn with me take a look at my online course here

Image credit: Pixabay

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Ice Cream Dreams

The surprising innovation stories behind that sunny afternoon delight

Ice Cream Dreams

GUEST POST from John Bessant

Season of mists, mellow fruitfulness — and those rare but wonderful days when the sun smiles down benignly. Strolling in the park, absorbing the warmth my attention was taken by an ice cream.

Or rather, to the face of a toddler who was very happily getting himself around an eminently lickable cone, with the usual results. We probably don’t really have to worry too much about the dietary impact of ice cream in situations like these because 80% of the foodstuff was being liberally spread around his face, across his clothes or dripping sadly to the floor. Which prompted the idle thought (it was a very warm and lazy afternoon) about the possibility of non-melting ice cream and from there to reflections on the general pattern of ice cream innovation.

It’s been with us a long time; the origins of ice cream are shrouded in the usual temporal mists but it’s generally thought to have emerged from eating snow and then someone having the bright idea (in China around 200BCE) of mixing in some milk and rice. Great if you happen to have nearby mountains to provide the necessary cold stuff but if not you need some way of making or at least preserving ice. Which is where the Persians came in with the necessary engineering; around 400 BCE, they developed an early concept for the refrigerator, a large pyramidal structure called a yakhchal that used evaporation and insulation to keep things cool.

Armed with this process innovation and after a few hundred more years they developed a delicacy called a sharbat — an ice-based fusion of various flavourings and a magic ingredient — sugar — which trade with India had given them access to. It’s not a huge stretch of the imagination to think that Xanadu (in Coleridge’s famous poem Kubla Khan) — his ‘…. miracle of rare device, A sunny pleasure-dome with caves of ice’ was populated by people happily eating these central Asian delights.

Not surprisingly the idea of ice cream spread across Europe though the pace of innovation slackened somewhat. It took another couple of centuries before ships began returning from the exciting exploratory voyages of the 16th century bringing with them a wonderful range of new flavours and additives — sugar, chocolate, vanilla and many more exotic spices. This kick-started a new phase of product innovation which placed the delicacy firmly on the tables of those people wealthy enough to afford it. Experiments proliferated and it was in England that the idea of mixing in milk was developed; in her cookery book published in 1718 Mrs Mary Eales wrote the first recipe down, based on her experience working as confectioner to Queen Anne:

Take Tin Ice-Pots, fill them with any Sort of Cream you like, either plain or sweeten’d, or Fruit in it; shut your Pots very close…

Lay a good deal of Ice on the Top, cover the Pail with Straw, set it in a Cellar where no Sun or Light comes, it will be froze in four Hours.

Across the pond it was the same story. A confectioner called Philip Lenzi was the first to announce publicly the sale of ice cream, advertising in the New York Gazette in May, 1777 and George Washington indulged his presidential weakness for the delicacy to the tune of a $200/day habit during the summer of 1790. It was one of his chefs, Augustus Jackson, who came up with the valuable process innovation of adding salt to the ice mixture to lower its freezing point.

The only problem with all of this was that the cost of the key ingredient — ice — was so high that ice cream remained firmly at the luxury end of the market.

We can use another innovation lens to help understand what happened next. Abernathy and Utterback’s valuable model of innovation dynamics suggests that emphasis shifts during an innovation’s life cycle; in its early days the attention is on experimenting with the core product idea until a ‘dominant design’ emerges which captures the attributes the market values. This is followed by a shift of interest towards the process innovation side — how to make this cheaper or more reliably.

And in the case of ice cream this shone a spotlight on the core problem. If ice cream were ever to shift from being the exclusive luxury consumed by French aristocrats, US presidents or English monarchs then someone needed to do something about the chilling side of the equation.

That someone was a 23 year-old Boston merchant named Fredric Tudor who in 1806 hit upon the idea of harvesting ice from his father’s farm and shipping it to the (relatively) nearby islands of the West Indies. His ship, the Favorite, made the 1,500 mile journey in three weeks carrying its precious cargo in holds lined with sawdust to act as an insulator. It half-worked; he was able to sell on the half of his cargo which hadn’t melted in Cuba, albeit incurring a significant loss. Following the idea of ‘fail fast’ he followed up on this venture with three more voyages during the following year, all of which compounded his losses.

His business model wasn’t bad; shipping costs were low (because most made the journey to the islands empty to return with cargoes of sugar and fruit) and sawdust was free as a by-product of the timber industry. But it took him 4 years to turn a profit from the venture and his cash flow worsened to the point that he spent several stretches in debtor’s prison during 1812 and 1813. He struggled on and eventually he was able to open up the ice market in cities across the southern states of America.

His gradual success encouraged others to work on the process side; one of his suppliers, Nathaniel Wyeth, developed a horse-drawn plough for cutting huge blocks of ice, opening the door to large-scale harvesting. Others worked on the logistics and insulation side; by 1833 it was possible to sail the 16,000 miles from Boston to Calcutta with a cargo of 180 tons of ice and land over 100 of them on the dockside, ready for sale at a huge mark-up. The increasingly profitable ice trade flourished; by 1886 the industry employed over 40,000 people and cut a record 25 million tons of ice to ship as far afield as Hong Kong or Rio de Janeiro.

It’s at this point that we see another familiar innovation face — disruptive innovation. In 1834 Jacob Perkins had been granted a patent for his “Apparatus and means for producing ice, and in cooling fluids” with which he effectively demonstrated that vaporizing and condensing a volatile liquid in a closed system would do the job. In doing so he outlined the basic architecture which underpins today’s refrigerators; his work influenced a generation of researchers like the young Carl von Linde who beavered away in their laboratories to explore the approach. It wasn’t long before artificial ice making became a reality; by 1873 a patented commercial refrigeration system was on the market. In the years which followed the industry grew — in 1879 there were 35 plants and ten years later 222 making artificial ice.

Effectively this development sounded the death knell for the ice-harvesting industry, although it took a long time to go under. For a while both industries grew alongside each other, learning and innovating along their different pathways and expanding the overall market for ice — for example, by feeding the growing urban demand to fill domestic ‘ice boxes.’ But inevitably the new technology took over as the old harvesting model reached the limits of what it could achieve in terms of technological efficiencies. Significantly most of the established ice harvesters were too locked in to the old model to make the transition and so went under — to be replaced by the new refrigeration industry dominated by new entrant firms.

Ice Cream ConesAll of which was good news for the ice cream side of things. The stage was set now for another kind of innovation — market positioning. Anticipating Henry Ford by decades the next wave of innovation was all about turning a luxury product into one for mass consumption. With the falling cost and rising availability of ice the entrepreneurial opportunities became increasingly apparent, not least to Signor Carlo Gatti, a native of the Italian corner of Switzerland who moved to England in 1847. He started out with a small street stall selling roasted nuts and waffles in London and was successful enough to be able, two years later, to open a small café in Holborn selling a variety of coffee, chocolate and confectionery — including ice cream.

His ice came from the nearby Regent Canal via the Regent Canal Company who had followed Tudor’s ideas and diversified into ice harvesting. With them as partners Gatti was able to expand, exhibiting at the Great Exhibition of 1851 and in the same year opening another outlet in Charing Cross, a stand from which people could buy various drinks and confections, including ice cream. He’d got the economics down to the point where he could sell a portion served in a glass shell for one penny — something which became known as a ‘penny lick’.

It helped bring ice cream to the attention of a wide population though it didn’t do much for public health. His imitators (in a classic example of what Joseph Schumpeter called ‘swarming’) soon began offering ice cream everywhere but it was often served under questionable sanitary conditions. Essentially when you had finished your penny lick you handed the glass shell back to the vendor who would give it a perfunctory rinse in what was increasingly dirty water, wipe it with a rag — and then use it for their next sale!

Gatti’s efforts on the supply side to bring ice cream to the masses were matched by those of a cookery writer, Agnes Marshall, whose books jostled with those of Mrs Beeton for a place in the kitchens of a growing number of Victorian households. Her 1888 edition included a recipe for ‘cornets with cream’ which was perhaps the first published version of what became the ubiquitous ice cream cone. It did her reputation no harm; she became known as ‘the Queen of ices’. She helped position ice cream as a standard dish on the menu of households who could increasingly afford to buy ice from a local icehouse and store it in their own ice box.

These developments were mirrored in other countries; Manufacturing ice cream was pioneered in in America in 1851 by a Baltimore milk dealer named Jacob Fussell. Another company called Bassetts began making ice cream in 1861, and then opened theiir own shop in 1885; it’s still available today.

Gatti didn’t stop with selling ice cream. He understood the challenge of scaling innovations and the importance of building a system, a network which could deliver value at scale. He used his early profits to buy into ice storage, opening in 1857 an ‘ice well’ next to the Regent’s Canal where he could store ice for use all year round — and also sell it to others. It was so successful that he built a second in 1862 and also began importing ice from Norway, shipping it up the river Thames, unloading and transferring to barges and then moving it by canal to his warehouses. He quickly became the largest ice dealer in the country and completed his network with the other half of the logistics equation, a fleet of handcarts which took the ice to private houses in the better-off streets of London. And he consolidated his original distribution channel, opening a series of restaurants, cafes and even a music hall in the city.

His ice warehouses also supplied the growing number of small vendors who would make and sell ice cream from stalls and shops, opening up the market on the back of a plentiful supply of the cold stuff. And they also enabled a distribution network for the finished product; by the 1890s ice cream stalls were springing up everywhere and the increasing availability of ice enabled enterprising vendors to take the ice cream where it was needed — in parks on sunny afternoons, outside the opera at night, to the crowds gathering for public festivals and so on.

This trend towards portability of sales outlet led to another example of a common innovation phenomenon — peripheral innovation. In this case it involved the invention, often by small scale user innovators, of a variety of solutions to the sales and distribution problem. People began improvising refrigerated handcarts which could be pushed around, or attaching them to bicycles. And one of them, Italo Marchiony, was doing so in the streets of New York in 1896 He was particularly frustrated with the problem of what to serve his ice cream in; the glass containers which he used needed cleaning before re-use, they were prone to breakage and not a few of them wandered off in the hands of Wall St traders out for a lunchtime stroll and never returned.

So, he began experimenting with an edible container, based on making waffles and then folding them before they cooled into small cups. The idea worked and people began to enjoy the additional taste experience as well as the contents; his business boomed and by 1902 he was running a fleet of 45 ice cream carts, now horse-drawn. He couldn’t keep up with demand for his cups using his family’s kitchen and so developed and patented (in 1903) a machine for making ice cream cups. With the increasing volume he was able to build a successful business, setting up a factory in 1904 to produce cups and later wafers to enable him to sell an ice cream sandwich as an alternative delivery option.

That same year at the St Louis World’s Fair saw ice cream seller Arnold Fornachou running short of paper cups and increasingly desperate to find an alternative. The next-door concession was a stall run by Ernest Hamwi selling a crisp waffle called zalabis. He quickly saw a solution, rolling the waffles into a cone shape (a cornucopia) and in the process solving the problem and inventing a new form for eating ice cream. It caught on and prompted Hamwi to set up in the business of making cones, establishing the Cornucopia Waffle Company and in 1910 founding the Missouri Cone Company.

(This appears to be another case of simultaneous innovation although according to his daughter, Marchiony also exhibited his waffle cups at the same World’s Fair and it was he who invented the cone).

Ice Cream Boat

It didn’t really matter; the market grew fast enough to accommodate both of them. By 1924 annual production in the USA reached 245million cones and the idea had spread around the world. Ice cream had become big business and it drew in a number of other players including one of the largest butchers in the UK, the Wall’s company. They saw the potential in diversifying into ice cream since sales of meat traditionally slumped in the summer, and they also had extensive investments and experience in refrigeration. They began experimenting in 1913 and went into full-scale production after the First World War in 1922.

They sold their ice cream in their shops and even going door-to-door and they also mobilised a fleet of bicycles to distribute during the summer of 1923; by 1924 they’d expanded the business with new manufacturing facilities and a new fleet of 50 specially-designed tricycles. Their efforts paid off; by 1927 sales had increased from £13,719 to £444,000.

Ice cream delivery vans were a next obvious step since they could extend the range of coverage and carry more stock on board. Equipped with loudspeakers to replace the bicycle bell they became a feature of every summertime street across the country. They also opened up an interesting sideline in what we might call ‘pirate innovation’ — using a novel idea in unexpected ways.

The city of Glasgow in Scotland became notorious during the 1980s for what were termed the ‘ice cream wars’ in which there was increasing violence between ice cream van salesmen — a classic case of gangland turf wars. These weren’t fuelled by a particularly strong appetite amongst the local population for ice cream; the problem arose because the vans (being highly mobile and working as cash-based businesses) offered an excellent base for illegal trafficking of drugs and stolen goods!

Back to our Abernathy/Utterback model of the innovation life cycle which also points us towards the next innovation wave which occurred in the 1970s. Once a dominant deisgn has been established and process innovation takes over there’s a drift towards maturity — which opens up the possibility of new growth coming as the cycle repeats. In the case of ice cream this was through marketing innovation — repositioning the product.

This may involve significant storytelling, weaving a new narrative around an old idea. In the case of ice cream it changed perception of the product from a simple treat to be enjoyed by children and their indulgent parents on hot days to something which was a much more adult-focused luxury experience. Exotic flavours proliferated and advertising stressed the sophisticated aspect; brands like Haagen Dazs were created which emphasised the sensual pleasures of consuming frozen milk.

Of course, this effectively returned ice cream to where it had started — as something which only the wealthy could afford. Only this time its luxury appeal was to everyone; the rise of such specialist ice cream can be seen today in the amount of refrigerated cabinet space now devoted to it in supermarkets.

Today’s market for ice cream is vast; estimates suggest it will reach $97.85 billion in 2027, up from $71.52 billion in 2021. And that’s without taking the potential demand increase which might come if global warming continues! It also provides further incentive for innovation, with increasing investment into advanced R&D to try and understand things like the micro-crystalline structures of ice cream or the key parameters involved in stimulating taste and texture receptors inside the mouth. So maybe somewhere in a laboratory right now someone is working on my non-melting ice cream idea.

Image credits: Pixabay

You can find a podcast version of this here

If you’d like more songs, stories and other resources on the innovation theme, check out my website here

And if you’d like to learn with me take a look at my online course here

Subscribe to Human-Centered Change & Innovation WeeklySign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.