Mastering Innovation Management

Throughout 2002 US manufacturers were cutting costs and curtailing investment in systems, innovation and, perhaps especially, consulting. When A.T. Kearney asked me to host a breakfast meeting of local Chicago executives, I asked Mir Aamir to help me put together a presentation on innovation that would highlight some of the advancements made in the auto and aerospace industries by our sister company, PLM (now Siemens PLM).

Prof. Willard I. Zangwill of the Graduate School of Business of the University of Chicago agreed to help us formulate ideas and the marketing staff did an outstanding job of organizing the event. Still, when the day arrived I just wasn't all that comfortable that we would have enough "new news" to satisfy the 30 or so people who were assembling, because it was clear that a number of astute innovators in their own rite had accepted our invitation.

We were about to deliver a lecture on how product lifecycle management technologies were enabling collaboration and knowledge-management among work groups that are distributed across far-flung enterprises. Instead, as coffee was being poured, we decided to turn the presentation into a collaborative work group. The discussion that followed was so rich and animated that it generated a much better white paper, "Mastering Innovation Management: Collaborating for Speed and Profit". (click to download the paper)

The panel agreed that the biggest challenge related to innovation is getting people to agree. Their recommendations:

1. Focus on Priorities. Leaders in innovation begin with an intimate understanding of what their brands communicate, what needs they fill and what competitive niches they address. Paradoxically, they are able to sustain creativity by managing development through formal evaluation processes.
   
2. Begin Collaboration Early. Collaboration solutions, such as wikis, enable organizations to share ideas globally, specifically, incrementally and immediately. Data capture becomes more critical, and more challenging, as businesses break products and processes down into modules to increase efficiency and boost flexibility.
   
3. Link Key Parties. Top companies bring global research and development, engineering, manufacturing, sales and marketing and key suppliers into the design process. When companies focus on upstream prevention, rather than downstream enhancements they ensure they can actually deliver the innovative products they develop.

See "Making Agility an Ability", by Allan Alter, in the Fall edition of Innovations 2007

See also "Wikis While You Work", by Dave Greenfield in eWeek, November 26, 2007

See also: "Innovation, Communication and Leadership: New Developments in Strategic Communication", by Ansgar Zerfass and Simone Huck, International Journal in Strategic Communication 1(2), pp. 107-122

See also: The Frank Lloyd Wright legacy: an expensive taste in buildings on the Gabion website for an interesting account of the innovation challenge posed by an architect's unwillingness to collaborate. Fallingwater House, arguably Wright's most famous home design, was not structurally sound.

Contrast Wright's stubborn deification of personal style with the approach of Eero Saarinen, architect of the St. Louis Gateway Arch, pictured above. Saarinen was loved by his patrons and ridiculed by contemporary architectural critics, notably Vincent Scully of Yale, for refusing to elevate a signature style over functional design requirements.
See Saarinen Rising: a much-maligned modernist finally gets his due, by Clay Risen, The Boston Globe, November 7, 2004.

See also: Building Respect at Yale, New York Times, December 16, 2007

See also our post, Best Practices in Architecture, for a fuller treatment of the approach of Eero Saarinen.

To learn more about our work in consulting, read about our Practice or check out our Case Studies

Starbucks: A New Forum

The Ancient Forum of Rome


The Roman Forum, that ancient mall, was a locus of both ideas and commerce. Before there were licensing and private ownership of retail space and branded merchandise, those places where people congregated for the exchange of goods became places for the exchange of ideas.

If today's mall seems sterile by comparison with the old world shops of lower Manhattan, London or Lima, perhaps it is because the discourse of the market has been crowded out or shouted down by the clamour of the mass merchants.

From the genius of Howard Schultz came the vision of Starbucks (SBUX) as a "third place," a haven from both office and home, where people could come together to share a latte and a few words. This vision was not so much futuristic as nostalgic. He came upon it in an Italian espresso bar, that ubiquitous element of the streetscape where men stand to sip coffee by day and beer by night ("barista" is Italian for "bartender"). Sensing our longing for a few subversive minutes away from responsibility, he created a place where $3 could buy a consistently good cup of coffee and fifteen minutes of vacation.

So it is no accident that a Starbucks store has almost no advertising. Just as white space draws attention to the words on the page, so does a muted environment promote respite and the free flow of ideas.

The place speaks for itself. Its message seems amplified because it is understated and authentic.

See Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time, by Howard Schultz and Dori Jones Yang

Schultz fears that stores are losing their authentic aroma and the brand is losing some of its unique charm. See this BBC video clip: Starbucks Plans 20,000 shops.

For other posts related to Starbucks, Authenticity, Retail Lifecycle Management (RLM), and other topics of interest, click the links on Index of Content on This Site in the border column to the right of these posts.

January, 2008 update. Note that Howard Schultz is back behind the counter. See this press release and a Letter to Shareholders.

February, 2008 update. See our more recent post, Too Many Starbucks?
See also our post Design is Destiny about the challenge of designing an effective chain restaurant platform or format

To learn more about our work in consulting, read about our Practice or check out our Case Studies

Starbucks Says Good-bye to the Bears

Starbucks advertising image, 2007 holiday campaign


When Madison Avenue waved good-bye to Starbucks headquarters last month, I wonder if "I Love N.Y.E." by Badly Drawn Boy was playing on their iPods? When I first saw the 2007 Christmas ads on TV I could only imagine that Howard Schultz was having a stroke. Apparently he was.

Since retaking the helm as "president, ceo and chairman" of Starbucks (titles are always in lower case at SBUX), Schultz is steering the Transformation Agenda with the steady hand of an experienced captain on a tight ship.

Schultz posted seven directives in as many weeks to stockholders and partners (employees) that:

1. Refocus the company on its customers, products and mission to be the "premiere roaster and retailer of coffee"
2. Lay out the purpose and framework of the new organizational structure
3. Reassure employees that the number of positions being eliminated is minimal as growth continues
4. Inform investors that new investment will be directed internationally and that some 100 (of 7,100) company-operated locations will be closed

While the repositioning of the brand and the store environments will play out over months, not days, customers will begin to notice changes soon. A $1 "short" coffee (8 oz.) is being introduced; free AT&T WiFi service will be offered to customers; and the reheated breakfast sandwiches will be discontinued, though warmed pastries and lunch items will still be available.

In an unusual move, Schultz announced that all U.S. company stores will close between 5:30 p.m. and 8:30 p.m. on Feb. 26th so that partners can undergo coffee training. Back in the last millenium, Starbucks considered coffee training so important to the initiation of new partners that even this consultant was required to take the full 3-hour course on the first day of our engagement with the company.

In those days management and partners shared a common belief that they were changing the retail course, outfitting an organization with an able crew with respect for their craft. The Siren on the logo provided all the cartoon imagery required to convey the message of this iconic brand. As the bunnies and bears go back to Madison Avenue, and the store experience improves, you can almost hear the Siren sing again.

To learn more about our work in consulting, read about Retail Lifecycle Management, download a brochure about our Practice or check out our Case Studies.


Parody of Starbucks TV ad for 2007 holidays

On Management Consulting

Banshee and crew, The Race to Mackinac

Beware of consultants offering advice. Though many of us aspire to be “trusted advisers,” that role is rarely sought out by clients.

Consultants are more like explorers, architects and engineers than sages. Simply put, consultants organize projects to help clients seek out, design and build sustainable business models. To each role they apply specific tools, skills and temperaments which extend and complement the capabilities of the client. Typically the client sets out the mission, the consultant charts the course, and the client provisions the resources, commissions the expedition, and claims the spoils. At each stage of the journey consultant and client reflect on what they have learned and derive the business implications. As the they learn, they rewrite the specifications for the business model.

For, guided exploration and reflection (and not repetition) are the basis of learning. Consultants should be expected to organize projects that help their clients apply directed learning to the development of more effective business models.

To learn more about our work in consulting, read about our Practice or check out our Case Studies.

Best Practices in Corporate Design

The Heineken keg can, introduced in 2000

The late graphic artist Paul Rand is credited with the expression "good design is good business." Thomas Lockwood* has honored his legacy by cataloging a number of best practices followed by businesses that incorporate design into their corporate culture.

In an article derived from his doctoral thesis, Lockwood promotes the following ideas he has seen in action at these companies:

1. Innovate by separating and differentiating the processes for managing legacy designs from those for managing new, "quick-release" designs (Nike), thereby allowing the former process to maintain the company's heritage while the second becomes the engine for reinvention.
2. Keep the brand fresh but coherent by introducing innovative packaging that echoes iconic elements from the brand's heritage (Heineken).**
3. Use iconography with a common design style to present a consistent visual image across all sub-brands. Microsoft maintains consistent imagery across more than 6000 icons for its Windows and Office platforms.
   
4. Reinforce the information architecture with the design architecture by using identical icons and names for corresponding features and functionality across all product lines (Microsoft).
5. Engage customers in the product design process as requirements are developed and preliminary designs are reviewed (British Airways).
6. Reinforce cultural norms by designing work environments that promote those values. StorageTek promoted collaboration and creativity by remodeling common areas in its buildings with inviting lighting, materials and color pallets and using these spaces to showcase the work of local artists.
7. Formalize design rigorously after developing design concepts creatively. Nike uses "sandbox meetings" with three-person development teams to come up with concepts, then expands the teams with specialists to drive designs to final forms.
8. Treat design as a capital resource that both requires investment and creates on-going, differential value. Starbucks empowers key resources to review store designs and merchandise selections and schemes so that the essential brand experience can be preserved as the enterprise expands and develops.

By following these principles of alignment, empowerment, and process discipline, organizations can develop and maintain distinctive brands that concisely convey their values.

*See Integrating Design Into Corporate Culture, by Thomas Lockwood, Design Management Review, Spring 2004.

**See Shape of beer to come. Beverage packaging gets more emphasis, The New York Times, The Media Business: Advertising, 22-June-1999.

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Digital Restaurant Design

Design in process (Autodesk)

Among the important PLM techniques now being applied to restaurant design is rapid visualization of 3D interior spaces and kitchens. The more sophisticated of these tools now incorporate parametric modeling, allowing the designer to build business rules into the design process itself. For example, the designer may require that customer aisles be at least 2 feet wide; that hanging lamps never fall below 7 feet from the floor; and that kitchen equipment never throw off more heat in an area than the HVAC system can handle.

Digital architectural modeling:

• Promotes early review of design and functionality by non-technical users of the design process, such as executives from operations, marketing and procurement
• Avoids expensive building of prototypes while permitting extensive trial and error
  
• Preserves a record of the design history
• Allows designers to reuse components of the design in future models
• Facilitates cooperation among spatially and temporally separated contributors

We consider it an indispensable component of Retail Lifecycle Management (RLM).

To learn more about our work in consulting, read about our Practice or check out our Case Studies