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Yesterday I facilitated a discussion at the Magazine Publishers Association annual Innovation Conference with Melanie Healey, the Group President of North America for Procter & Gamble. She told a story with some important innovation implications.

The story dates back to the 1990s, when Healey was a brand manager in Brazil. She was responsible for growing P&G's Hipoglos brand of diaper rash ointments. The problem? The product already had 99 percent household penetration.

A tough challenge, right?

Healey did what good P&G people do — she went out to talk to consumers to find out what they thought about the product, the problem it addressed, and so on.

People claimed they used the product regularly to prevent diaper rash. If that were true, however, Healey knew consumers would buy much more Hipoglos than they did today.

So, she dug deeper. By probing when consumers used the product, she found that parents applied it when early signs of rash began to appear. Of course, that's too late if you truly want to use a product for preventive purposes.

Healey had a critical insight. Consumers weren't actually realizing all of the benefits of the product, resulting in cranky babies and sleepless nights. P&G began running advertisements showing how applying the cream to an already emerging rash was too late to prevent the rash from occurring. Not surprisingly, sales soared.

Read the rest at Scott's Havard Management blog, Innovation Insights.

I love books. I love going to bookstores, browsing through the shelves, feeling the paperbacks conform to the curve of my hand or the weighty strength of hardcovers as I lift them off the display tables. I love getting home and cracking the spine of a book, tracking my progress with dog-eared pages or used boarding passes, and filing the book away on one of my many bookshelves like the trophy it is.

For me, reading a book isn’t just about language or plot, it’s a multi-sensory experience. Which is why I swore I would never own a Kindle.

Sure, Kindles are amazing. The e-ink technology is (literally) studied by scientists and business school students. The compact size is great for traveling. And the ability to automatically download books, magazines, and newspapers saves time, money, and paper. Despite all these very functional benefits, I felt like the Kindle was robbing me of the experience of a book and that was something I was simply not willing to give up.

Then my circumstances changed. Shortly, I will be going on an extended trip which will (hopefully) allow me plenty of time to read. As I started planning, I realized that I would probably need an extra suitcase for all the books I wanted to take with me. The thought of carrying yet another bag (and a very heavy one) was not appealing but neither was the thought of bringing fewer books or reading slower. Suddenly, a solution that I wouldn’t even consider became the perfect solution.

At Innosight, we talk a lot about Jobs, but this experience highlights a component of our Jobs approach that often gets overlooked: Circumstances. In this case, my Jobs – read a good book, have access to the books I want, enjoy my reading experience – did not change. What did change, however, are the Circumstances in which I need to satisfy those jobs (e.g. at home vs. on the road, unlimited storage space vs. limited storage space). Simply changing these circumstances completely changed my set of acceptable solutions, shifting it from traditional books to a digital reader.

So I bought a Kindle.

It’s not perfect. The pages turn a bit slower than I expected and I’m afraid of hitting the wrong button and doing who-knows-what to the book I’m reading. But for 3 weeks on the road, these seem like small sacrifices to ensure full access to a library of wonderful books.

• Tide Turns 'Basic' for P&G in Slump, By Ellen Byron - WSJ.com

  Interesting story of how P&G learned to "love the low end" not by introducing a new low-end brand but by the riskier bet of introducing a low-end version of a premium brand.

• A123Systems Awarded $249m Federal Grant, by Sean Sposito - The Boston Globe

  Federal stimulus money finds its way to a Boston-area electric battery company, but the batteries will be made in Michigan. Story notes that another Boston start-up, Boston Power, which had planned to manufacture batteries in Massachusetts, got none of the stimulus money.

• Culture at Netflix | SlideShare.net

  Lengthy slide deck released by Netflix offers insights into its recruiting and talent management, optimized for innovation. Example: "We're like a pro sports team, not a family. Coach's job at every level of Netflix is to hire, develop, and cut smartly, so we have stars in every position."

• Le Whif: Inhaled Chocolate

  Inhaled chocolate -- a new product meant to offer benefits of chocolate without the calories. Illustrates the principal of "de-featuring"!

  
  

RFID, SAP data center, dedicated Verizon network, Windows CE with touch screen interface…for flavored water? The cola wars have come a long way from blind taste tests in the local shopping center!

With the limited release this summer of the new Coca-Cola Freestyle machines (pictured at left), Coke is essentially introducing a new business model into the fountain drink industry, one with serious disruptive potential. The system is about the size of a small Coke machine you would see on the street but features a large touch screen interface and single dispensing position. The consumer simply navigates through 100 varieties of beverages and then the machine uses micro-doses of flavor from canisters stored inside to precisely mix up the selection. Profiled in this recent InformationWeek article, the Freestyle is a consumer and customer service tool, a network node, an inventory and supply chain manager, quality control, and business intelligence agent all in one. The integration of these various functions and their associated data streams offers Coke the rare opportunity to improve their performance on the sustaining curve while simultaneously introducing a disruptive play into the market (for more on these curves, see The Disruptive Innovation Primer).

On the sustaining front, Coke is offering its consumers a wider array of drink choices at the point of consumption. They hope this greater array of choices will delight many consumers who leave the fountain disappointed that their preferred beverage was not offered. They also hope the increased number of options will capture a significant portion of the non-consuming market who have traditionally selected water or no beverage at all as the options traditionally available at the fountain were not to their liking. Both of these are significant competitive advantages that will move Coke further up the sustaining curve. However, increasing the number of flavors alone will not yield transformative growth.

The real disruptive potential here lies in the data, not the drinks. By mixing flavors on site in the machine and capturing purchase behavior real time, Coke is better able to test new offerings and immediately respond to market insights around existing and emerging consumption patterns at a hyper-local level. Each point of purchase becomes a kiosk through which Coke can interact with its consumers and test their reactions to new formulas and new messaging. It is no longer dependent on limited and lagging sell through data from its restaurant customers, rather, it can decide which beverages to present to the consumers based on time of day and recent consumption patterns. Much like Zara has done in the apparel industry, Coke is virtually eliminating the time lag between trend identification and capitalization.

Coke also made sure to address the “jobs” of their channel partners, namely the restaurants selling the beverages. By opening up the data to these outlets, Coke is expecting them to play an active and informed role in increasing beverage revenues while the RFID-controlled, networked inventory and supply chain control system promises to address long-standing frustrations.

As the benefits of this smart system are realized, we expect to see other restaurant chains shifting from competing fountain suppliers to Coke. 

• Retailers Cut Back on Variety, Once the Spice of Marketing by Ilan Brat, Ellen Byron and Ann Zimmerman | WSJ.com

  Will this affect the increased pace of incremental innovation in consumer packaged goods? "In the next year or so, these and a few of the other largest retailers are expected to slice the assortment of products in their stores by at least 15%, industry executives and analysts say. This is a challenge for manufacturers, who have grown accustomed to churning out incremental variations on popular products to maintain shelf space and keep their brands fresh in consumers' minds."

• IBM Aims for a Battery Breakthrough by Steve Hamm | BusinessWeek

  Article points out the GE, among others, is also making a play in batteries. "Industry leaders have called for just this kind of concerted effort amid concern that the U.S. will miss out on one of the most important technology shifts in history—the switch from gasoline to electricity as the primary power source for light vehicles. The worry is that the U.S. will trade its current dependency on the Middle East for oil with a new dependency on Asia for vehicle batteries. 'We lost control of battery technology in the 1970s,' laments Andy Grove, former chairman of chip giant Intel. 'Battery technology will define the future, and if we don't act quickly it will go to China and Japan.' "

• The 99-Cent iPhone App That Kills Print Journalism by Ray Richmond | The Wrap

  I have it. And it's good enough that it's hard to imagine how a publication could sell online access if it was also available via this iPhone app. Media disruption continues.

• MediaBugs Rethinks Corrections by Taking a Page from Programmers by Zachary M. Seward | Nieman Journalism Lab

  In a move borrowed from open source programming, startup MediaBugs purports to offer an improved, centralized method for media corrections. "Improved" partly because many media sites have no well-defined path for users to point out corrections, nor prominent place to publish corrections for readers to see.

Humans are creatures of habit. We tend not to change our behavior unless the incentive to change is compelling. We prefer that things stay the same or change as little as possible, which makes it hard for us to break out of our set patterns and routines. 

Psychology shows us that breaking this status quo bias and developing new habits is one of the most difficult things to do. Yet companies develop innovative offerings and expect consumers to readily change existing habits and adopt new habits all the time!

Even if you have a solution that absolutely targets consumers’ problems dead-on and you know will delight them, consumers still need some help knowing when to turn to your solution and how to use it. You can use advertising and marketing to show them when and how to use your solution.

Consumer packaged goods companies do this particularly well. Just think of the Tide to Go commercial with the woman who is about to make a big presentation, spots a stain, quickly removes it with the handy Tide to Go pen that her coworker hands her, and confidently gives her presentation. To my mind this 30-second commercial is effective because it incorporates the following three key elements: 

1. Shows a circumstance where the job-to-be-done is acutely important and for which a solution either is not available or falls short.
   Removing a fresh juice stain on a blouse just minutes before a big presentation (yikes!)
2. Shows the consumer how the solution is used to effectively solve their job.
   Can be pulled out of a purse, quickly applied, and dry in the time span of an introduction
3. Makes it clear that your solution is the best out there for this job in this circumstance
   What else could this poor businesswoman have done? Go out there and make her big presentation with a stain on her shirt? Keep her audience waiting while she runs to the bathroom to apply cold water? With Tide to Go, she removes the stain and confidently delivers her presentation.

Remember, it is not enough to develop a great product, you need to crisply communicate when your solution can be used, how it works and why it’s the best solution to get the job done! 

• Council on Competitiveness President to Senate Energy Committee: "America Leads in Innovation, but Is Bleeding Opportunities" - MSNBC Wire Services - msnbc.com

  Deborah L. Wince-Smith, president of the Council on Competitiveness, called for "focus" on turning energy research and development into real economic value.

• Firepower of the Lowly Caulk Gun - WSJ.com

  More effective in conserving energy than any green solutions on the market now is measuring where air is leaking into and out of a house and caulking those spots.

• The Music Industry's New Internet Problem - BusinessWeek

  Turns out that a large group of consumers would rather listen to streaming services than buy even mp3s, let alone CDs.

• TaylorMade's Innovation Test - BusinessWeek

  "The only way you are going to innovate," TaylorMade CEO Mark King says, "is if you build chaos into the system."

A few people have asked for my thoughts about the second version of Amazon.com's Kindle e-reading device. The short answer (as I told a reporter from Advertising Age): a nice evolutionary move, but one that is unlikely to drive a step change in the product's adoption.

I've long admired the Kindle, particularly the simplicity of Amazon's integrated business model. It literally takes seconds to download content and begin reading. Some analysts suggest that simplicity has led Kindle users to triple their book purchases.

The original Kindle wasn't the most beautiful of devices. It was all too easy to accidentally press a button and advance a page. The second version of the device looks more attractive. It is significantly thinner and more ergonomic. It also has additional features, such as the ability to translate text into speech. The price is the same as the original Kindle.

The upgraded device should appeal to customers who liked the Kindle's premise, but didn't like its clunkiness.

Read the rest at Scott's Harvard Management blog.

Yesterday, as I walked through the office, I heard a deep, drawn-out sound like a stomach grumbling. Minutes later, there was a squeal reminiscent of high-tops on a basketball court. I had to acknowledge that one of my favorite pairs of shoes was dying … and quite loudly. I didn’t realize it until I noticed I had become a one-woman band. My best hope for saving my newly noisy footwear is to find a good cobbler. Luckily, I know where to find one, but they’re difficult to come by.

In the current economic climate, more and more people are turning to repair services to extend the life of their durables. While in the past consumers might have simply replaced older products, some are now trying to stretch as much use out of them as possible. The sudden influx of business needs to spur innovationon the part of the repair businesses, else their business models will fall by the wayside once again when the economy rebounds.

With the Industrial Revolution came a host of innovations in the production of footwear that resulted in a diminishing need for shoe repair services, since lower-cost goods could be replaced more easily. Today, the number of such repair shops is limited, with only about 7,000 in the United States, according to the Shoe Service Institute of America. Footwear manufacturers, such as Allen Edmonds, challenge repair shops further by offering re-crafting services that enable them to capture additional revenue per consumer. You can expect high-end manufacturers to continue their move into services as they seek growth in the down economy. To fill the revenue gap, they might also offer upkeep products like cleaners, conditioners, and touch-up kits, or could promote free same-day repair services in-store for products purchased there.

So where do these trends leave the local repair services? One way they can gain an advantage is by changing focus. Manufacturers who make $40 sandals are less motivated to move into repair services than those who make $300 leather slingbacks. By going after the low end of the market and offering, for instance, low-cost preventative services, or by targeting consumers who typically were priced out of using these services at all, shoe repair companies could get incremental revenue without catching the full attention of the competition.

In the January 14 issue of Strategy & Innovation, we offer up our annual Year in Preview story (free reg. reqd.) by Scott D. Anthony. This year we've added a new feature to this feature — we asked Innosight partners to write short industry specific predictions of the industries in which they have expertise.

Some overall themes:

• The darkening economic climate is good news for innovation — after all, abundance is at the root of many corporate struggles with innovation.
• It has never been easier to develop and scale an idea. Innovators can draw on high-quality, low-cost tools to develop, test, and begin to commercialize ideas without tens of millions of dollars of investment.
• Innovation has never been more important. Success in what we are calling the Great Disruption requires mastering perpetual transformation.
• Companies that are partially disrupted (such as print media) and those that are innovation novices will have a tougher go of it, as the current economic climate isn't favorable for their challenges.
• On-the-brink disruptive attackers and companies that have progressed in their efforts to make innovation systematic will be more likely to find their efforts paying off.
• Companies that demonstrate an ability to love the low end will find that strategy effective if they are able to master business model innovation and gain a deep understanding of how the low-end consumer measures value and develop unique offerings tailored to key value drivers.

Those industries for which uncertainty in the markets and uncertainty regarding potential governmental policy and regulations changes will struggle this year until the economy settles down and the policies of the new U.S. presidential administration begin to take shape. Finance and healthcare are two such industries.

Here are some of our partners' industry-specific predictions:

• Media: A strong likelihood of continued bankruptcies among media companies.
• Defense: A push toward decentralization and away from aircraft- and ship-specific platforms.
• Manufacturing: A shift toward innovation and away from strict reliance upon Six Sigma and cost-cutting.
• Automotive: No automakers will fold, but we will see consolidation of vehicle models in the saturated marketplace as a better linkage develops between customer requirements and available models.
• Retail: Growth among retailers targeting the low-end as well as those that can add high-level services that high-end consumers will pay for.
• Consumer products: CPG companies that do well will be those that strive to push the boundaries of their innovations, looking beyond just new products to new categories, new business models, and new channels.
• Finance: Reduced scope and size among financial global financial services firms, and an opportunity for low-cost tools and data providers.
• Healthcare: Widespread implementation of Electronic Medical Records, as proposed in the forthcoming economic stimulus package, could radically shift the balance of power between physicians, healthcare provider organizations, and insurers. 

The holidays are here. Get within 500 feet of a mall and you will be bombarded with sales signs, overwhelmed with Christmas carols, and swallowed by crowds of seasonal shoppers. While all of this may be overwhelming, there is one very good thing that comes with the hustle and bustle of the holidays – cookies.

I love cookies and there is no time of year more cookie-centric than the holidays. I have many fond memories of baking cookies with my mom, gleefully squishing Hershey’s kisses into the center of peanut-butter cookies and carefully painting icing on sugar cookies. This is why I was so fascinated by Arrowhead Mills’ “Bake with Me,” a line of baking mixes designed to encourage interaction between children and their caregivers. In addition to the baking mix, each box contains a promotional item, such as a cookie cutter or decorating stencil, to carry the interactive element from the box to the baking sheet.

Like most other baking products, there are sumptuous shots of sugar cookies, brownies, or cupcakes on the packaging, but what makes this packaging stand out on the shelf is that it also features a photo of a child in a chef’s hat happily mixing a bowl of batter. “The idea behind the package design was to develop a look that would really stand out on shelf to deliver the unique proposition; a fun activity for mom to do with their kids...,” explains Martha Seidner, a vice president at Smith Design, the agency responsible for design of the “Bake with Me” packaging.

All baking companies target functional jobs around taste, attractiveness of the food, nutritional value, and preparation time required. Arrowhead Mills has nailed the emotional jobs of parents, such as:

• Feel like a good parent
• Establish/reinforce my relationship with my kids
• Create lifelong memories with my kids

By targeting emotional jobs, “Bake with Me” effectively overcomes traditional resistance to baking mixes as less authentic (and lower quality) than baking from scratch by satisfying other (and arguably more important) jobs related to the parent-child relationship.

Well done! Now, let’s gather the family and friends and start baking some cookies.

About a week ago, my wife let out a contented sigh while browsing the Internet. She was visiting Amazon.com, and saw an announcement that the company was experimenting with hassle-free packaging. Amazon's move illustrates one of the important advantages that entrants have over industry titans.

Anyone with children (we have a three year old and a one year old) knows that gift-giving times go through a predictable cycle. It starts with ebullience as children open their presents. Then frustration sets in as you have to deal with seemingly dozens of small, twisted wires that take forever to untangle. You grumble about evil, profit-minded corporations, and your children just wonder if they'll ever get to play with their new toys.

Amazon hopes to do away with this hassle. It has worked with manufacturers over the past few years to develop packaging for 19 popular products that is easier to open and more environmentally friendly. If experiments with more hassle-free packaging succeed, Amazon plans to extend the program to other products.

It's a winner all around: less hassle for parents, cheaper shipping for Amazon, and less environmental degradation.

Don't expect this movement to spread to toys sold in Wal-Mart or other traditional retailers any time soon. It's not that retailers hate their consumers. They don't. They do hate shoplifters. Difficult-to-open packages are a critical shoplifting deterrent.

Amazon's direct-to-consumer model is shoplifting resistant, so it can design a solution that maximizes its profits and consumer satisfaction....

Read the rest at Scott's Harvard Management blog, Innovation Insights.

One of the biggest challenges for marketers is to develop products that stand out from the pack (in a good way) and grab the attention of consumers when they are walking the aisles of Target or Wal-Mart.

Lots of products on the shelf today are vying for consumers’ attention, oftentimes touting superior “one-up benefits” from others in the category: “whiter whites”, “removes even the toughest stains”, “closest shave yet." It is getting tougher and tougher for companies to entice consumers to pay a premium for a product when consumers feel like their needs for laundry stain-removal or shaving are largely met.

I was intrigued when the Arm & Hammer Essentials product jumped off the shelf to me last time I was at Target. This cleaner does not include harsh chemicals and is shipped in an empty trigger bottle with a small refill pack; you just need to add water at home and voila, you have a cleaner.

Is this product disruptive? I would say yes. It reorders benefits in a non-obvious way; when consumers use this product they are giving up some cleaning power for a “good enough” level of performance while feeling like they are doing something good for the environment.

This product provides a three important lessons for disruptive innovation practitioners:

1. Borrow from other categories and industries It seems like the idea of taking a small packet of powder and adding water to create a solution has been around forever. Just think of powdered drinks like Kool-Aid or Jello gelatin. Borrowing from other categories is a basic building block of creativity and innovation. Look outside your company, category and industry to find someone who has solved similar problems to what you’re seeking to solve. A historical example is Henry Ford's revolutionary assembly line, which came from an unlikely blend of observations from Singer sewing machines, meatpacking, and Campbell's Soup. See Andrew Hargadon’s book How Breakthroughs Happen: The Surprising Truth About How Companies Innovate for more on this topic.
    
2. Target an important problem in consumers lives that isn’t yet solved adequately (vs. a problem that is already being solved by everyone else in the category) Consumers seem quite satisfied with the level of grime-fighting and cleanliness they are achieving with their existing products. As a consumer would you be willing to pay a premium for a multipurpose cleaner that enables you to clean your kitchen counter so you can see your reflection in it? Or would you prefer to use a cleaner that cleans adequately and is better for the environment because it uses less chemicals and was shipped using less energy? Arm & Hammer is hoping you’ll pay a premium for the latter with its Essentials product.
    
3. Make it as intuitive and clear as possible to consumers that you are helping them solve an important problem The neat thing about this product, beyond delivering a new benefit to the consumer, is how obviously Arm and Hammer presents the benefits. Companies can make lots of changes in the product formulation but it is really hard for the consumer to get this or to believe it. Making claims can be dangerous as well. Just look at a product Josh Susckewicz recently wrote about on the Innoblog, Clorox Green Works. Clorox was recently reprimanded by the National Advertising Division of the Council of Better Business Bureaus for making dubious claims about Clorox Green Works. 

Arm & Hammer goes beyond making claims by helping the consumer draw their own conclusions with the package– it looks different, it feels different, it’s lighter, it looks like it is kind of fun to use. It stands out on the shelf almost as a completely new category or product. Because of this consumers won’t put it in direct competition in their minds with their Scrubbing Bubbles or Mr. Clean. They know they are making a trade-off to feel good about doing something better for the environment.  This is a good thing for the folks at Arm & Hammer.

We’d love to hear your thoughts. Have you tried Arm & Hammer Essentials? Is it good enough to get the job done? 

Stuttgart is “going green.” The German city recently signed a letter of intent with Ultra Motor to implement an infrastructure to support eco-friendly scooter-bikes. Launch is expected in 10 months and the idea is catching on; according to BusinessWeek, Ultra Motor is currently in negotiations with 12 other major European cities.

Driving this effort is Ultra Motor’s new A2B Light Electric Vehicle (LEV) — a scooter-bike with a conscience. The tagline even has an anthropomorphic ring to it: “The heart of a bicycle. The soul of a scooter.”

Experience LEV technology: Hop on a comfortable seat surrounded by a lightweight, aluminum frame. Enjoy as much exercise as you choose by pedaling or cruising at 20 mph. Want to ride further? The standard range of 20 miles can be extended to 40 with the addition of a lithium ion battery pack. New technology provides one-third more force than electric motors; helpful when ascending hills or darting through traffic. A dashboard indicator signals energy remaining. Dwindling charge? Simply plug in.

Current customers of the A2B vehicle include commuters, students, employers, fleets, and local authorities. However, through our lenses, jobs define the marketing strategy and are linked to attributes:

Social job: “Have a positive impact on the environment”
The A2B is a zero emissions mode of transportation, powered by a lithium ion battery. The vehicle efficiently functions at approximately one-tenth the running cost of a gas-powered scooter.

Emotional job: “Allow me to enjoy my commute”
The rider is able to enjoy the outdoors and a quiet ride. The extended driving range provides freedom and the vehicle is easier to handle than a gas-powered scooter. Modular storage options are also available.

Functional job: “Provide a way for me to reduce transportation costs”
Savings are self-evident — no gas required. The A2B model is currently available in 20 states across the U.S. for about $2,200. In Stuttgart, a monthly subscription will cost $23; a mass transit pass costs $84.

In the spirit of business model innovation, Ultra Motor is exploring new networks of transportation, one of which will be utilized in Stuttgart. The “LEV City Initiative” outlines this potentially disruptive system featuring charging stations; purchase a subscription, locate a station, swipe your card and enjoy the ride.

We applaud Ultra Motor for encouraging consumers to “go green” in new ways. Learn more from the source at www.ultramotor.com. You’ll notice as the website loads, the screen cleverly notes: “Charging up.”

A brewing discussion about Starbucks’ new coffee flavor highlights a challenge facing innovation-seeking incumbents: Which customers should we listen to?

As part of a broader effort to reinvigorate the company, Starbucks recently rolled out a mild-tasting coffee called “Pike Place Roast.” It has quietly moved away from offering bolder-tasting coffees, such as its Sumatra brand, particularly in the afternoon.

Starbucks brought Pike Place Roast to market in response to complaints from Consumer Reports and others that its coffee tasted bitter or burnt. A small group commercialized the brew in six months—an astonishingly short period of time in the food industry.

While Consumer Reports and the mass-market has cheered, a vocal group of core Starbucks loyalists panned the coffee—one reviewer on a Starbucks Web site designed to solicit customer feedback called it a “fundamental, grievous error”—as watered-down and away from what makes Starbucks distinct.

Incumbents seeking to create new growth often face a version of this dilemma. Should we listen to our best, most loyal customers, or should we turn our ears towards customers we’re not serving well, or even to customers we are not serving at all?

Read the rest on Scott's Harvard Business blog, Innovation Insights.

Something strange happened at the gym last week. I was in the locker room recovering from a workout and a strong, familiar scent filled the room. No, it wasn’t the usual gym locker room smell. It was sweet and fruity and, for some reason, it made me feel young.

I wasn’t the only person to notice the smell. Like prairie dogs, women popped their heads up looking for the source. After a few seconds of searching, we found it: Two bright pink bottles of Salon Selectives shampoo and conditioner.

“Salon Selectives! I haven’t seen that in years!” 

“I thought they stopped making that!”

“I used to love the smell of that!”

The chatter started almost instantly and every comment was positive. Women talked about the smell, the bottles, and the fact that no girls’ toiletry kit in the late 1980s was complete without those green-apple scented pink bottles.

It’s not often that shampoo evokes such excitement, which may indicate that Salon Selectives has tapped into something overlooked by many products: It is is meeting either an unmet or under-satisfied job-to-be-done. But with hundreds, maybe even thousands, of hair care products on the market, what job could possibly be left undone?

The answer probably lies in the first reactions of the women in the locker room: Remember simple pleasures and happy moments.

Hair care products today address every possible functional job-to-be-done: Give volume to thin hair, decrease frizziness in curly hair, preserve color in dyed hair…the list goes on and on. Brands position themselves to address many of our social jobs (those jobs related to how others perceive us) by showing us celebrities and models with stunningly beautiful and healthy hair, with the implicit promise that, with proper shampoo choice, our lives will be equally fabulous. But very few hair products or brands address our emotional jobs (those solely focused on the user).

The importance of marrying emotional jobs with social and functional jobs is something we often stress with clients and something that River West Brands (owners of Salon Selectives) and similar firms tap into when they buy the brand equity (and little else) of a dead or dying business. These companies use the power of our memories and the associations we make with a brand to meet our emotional jobs-to-be-done. Then they can update it to meet the functional jobs-to-be-done of today’s consumers. Finally, through the positioning and marketing of the brand, the company can address our social jobs, delivering the trifecta that often leads to brand success.

Combining memories with products and brands that meet important functional, social and emotional jobs-to-be-done can be extremely powerful. Perhaps, if that prairie-dog reaction to the Salon Selectives bottles in the gym is any indication, powerful enough to bring a dead brand back to life. 

Believe it or not, gardening is the number one outdoor activity, ahead of both walking and golf. There are several barriers locking the average consumer out of gardening as a hobby – it is time consuming and can be overwhelming for the newcomer who doesn’t know an annual from a perennial. So how did an activity with so many potential barriers to consumption become so popular?

A primary driver of the increase of the popularity of gardening is the advent of innovative packaging and products that break down these "barriers to consumption" by making it simpler and more fun to spend time in the yard. Scott’s MiracleGrow Liquafeed is a great example of such a product; it is a hose-and-bottle system that automatically combines water and plant food (see picture).It is not a better version of plant food, but it is a packaging innovation. It makes it simple and idiot-proof for the novice gardener to easily feed and water their outdoor plants. My bet is this product is mainly enjoyed by people who previously wouldn’t use fertilizers or even spend much time doing yard work. This is described nicely in this quote from Scott’s Miracle-Grow's CEO, Jim Hagedorn: "Our biggest competitor is people's time. We have to make it easy and fun for people to work in the garden."

A little bit of research turned up what I had suspected to be true. Liquafeed was the most successful new product launch in the history of Scott’s. It increased sales in the fertilizer category by 11 percent. First-year sales were $50 million, making it the most successful new product launch for the company ever (while projected sales were $20 million). The key to the innovation is the packaging, which was developed in partnership with Calmar, a MeadWestvaco company.

The key thing to remember here is that innovation requires looking beyond improving a product along the traditional dimensions of performance (in the case of plant food these might be things like increase in chlorophyll production or improved heat and cold tolerance) and using other innovation levers to break down the barriers locking out potential consumers from using your product!

As mentioned, this morning I did the "Q" part of a 75-minute Q&A session with P&G CEO A.G. Lafley. The discussion was wide-ranging, covering everything from the need to re-think marketing and advertising to the benefits of a liberal arts education. At the end of the session, I told the audience that my six takeaways were:

1. In an age of disruption, growth is getting increasingly difficult.
2. Companies need to take the long view. Lafley said he finds it hard to watch CNBC for more than 7 minutes because the focus is so short-term.
3. The customer needs to be the center of the innovation equation. When Lafley took over as CEO in 2000, he said he saw too many managers on their cellphones, or buried in spreadsheets, in essence "showing customers their behind."
4. Experimentation is key. Lafley talked about the value of giving customers even crude prototypes to test an idea. He also described how different parts of his organization approach innovation differently, and that's a good thing.
5. Complex organizations need to simplify to successfully innovate. Lafley said he seeks Sesame Street simplicity.
6. The CEO has to be the "Chief External Officer" to manage external pressure and the "Chief Innovation Officer" to push the innovation agenda forward.

Read the rest at Scott's Harvard Management blog, Innovation Insights.

The ongoing "greening" of the corporate world is a wonderful thing. As our industrial titans shift towards sustainability our environmental footprint decreases, consumption of finite resources becomes more rational, and we all get exposed to fewer toxins and chemicals.

The move towards sustainability also provides an instructive live case study of market evolution and innovation; as "green quickly becomes an essential performance characteristic in all sorts of products and businesses, companies are scrambling to innovate in order to take advantage and differentiate themselves from their traditional competitors, or if someone else has already done so, hop on before getting left in the dust.

The underlying phenomenon driving the emerging importance of sustainability is growing consumer awareness of the problems posed by unsustainable practices and products. This renders sustainability increasingly valuable to more people in more contexts (and, it should be noted, environmental regulations like fuel efficiency standards and carbon taxes cement such perceptions in law, forcing the economic calculus to account for externalities the market might otherwise ignore).

Taking a step back, all products and services can be thought of as aggregates of performance attributes I like coffee, for example, that is hot, strong, fresh, affordable, fairly traded, and sustainably harvested. When any performance characteristic becomes increasingly valuable others necessarily become relatively less valuable, be they price (e.g., people are willing to swallow the premium for organic food), convenience (theyll go to the one Whole Foods in town rather than the market down the street), reliability (they ditch the brand theyve trusted for ages in exchange for a new green product from a company theyve never heard of), or even quality (theyll settle for scratchy but 100% post-consumer recycled tissues). Understanding the impact of the increasing importance of sustainability in any given context is critical to projecting the nature and extent of the "green revolution and the best ways to innovate in response.

Disruptive innovation often takes place in these sorts of situations, when the dimensions of performance shift, when, for a variety of reasons, the market reassesses the value of specific characteristics in a product set. Those that figure out how to deliver the right set of performance characteristics succeed, while those that fail to do things differently just fail.

Consider consumer products giant Cloroxs recent behavior: last fall they purchased leading natural products company Burts Bees for $925 million, then perhaps more interestingly in this context, earlier this year they unveiled Green Works, a new set of eco-friendly and Sierra Club-endorsed products touted as "the first line of natural cleaners developed by a major consumer products company.

Clorox recognized that the market landscape had shifted, that more and more consumers were valuing green product attributes, and they adapted accordingly. That recognition enabled it to apply its corporate muscle and know-how to the challenge. It can reach into its pockets and swoop up an emerging competitor Burts Bees but it can also marshal its scientists to create compelling green chemical formulas for new products, its sourcing and manufacturing capabilities to harness economies of scale and bring down prices, its channel relationships to place sustainable products in Wal-Marts and supermarkets everywhere, and its market researchers and marketers to understand and reach mainstream consumers.

In short, Clorox can deliver products that meet the sustainable performance threshold (they are all natural, biodegradable, recyclable, not tested on animals, and so on) but that also adequately satisfy more traditional performance metrics like efficacy, affordability, reliability, and accessibility. As long as it understands the true market need and tailors its business model and product set accordingly, Clorox has the chance to outpace many of the startups and pure plays that make up the green products market today.

So what are the lessons for big companies looking to navigate market shifts such as the emerging importance of sustainability? Early adopters are the canaries in the coal mine watch them closely in order to understand the new dimensions of performance they prize and the tradeoffs they are willing to make. A close reading of their evolving performance tradeoff profiles will clue you into the nature and extent of underlying shifts in the relative valuation of distinct performance attributes. Then, look at the thresholds for mainstream consumers how acutely do they feel the shifts that are motivating early adopters? What are the barriers that stand in their way today from consuming in the same way as the evangelists? You just might find that big company resources and capabilities, applied intelligently, can innovate around those barriers by, say, getting affordable and effective all-natural and sustainable cleaning products into Wal-Mart.

Airborne, the company that introduced the public to herbal health formulas that claim to boost your immune system, entered the childrens market with the recent acquisition and launch of "Squid Soap by Airborne. Squid Soap contains a small amount of dye that forces children to wash their hands for 20 seconds, satisfying parents "Job to be Done of teaching their children proper hygiene habits.

The original Airborne product has a very clear job with a purpose-brand: it keeps people healthy from airborne germs. The brand is often associated with travelers and the product was promoted with give-aways on airplanes. Now Airborne seeks to take its purpose brand and endorse a soap product aimed at children instead of travelers. As Airborne was created by a teacher, a wiser strategic move may have been to name the corporate parent with a different name like HealthyYou that could be used to endorse multiple product lines for travelers, children, elderly and other groups that could be targeted with multiple germ-killing products.

See SquidSoap's website for more information.

Wiive talked about the disruptive gaming system from Nintendo before, both on the blog and in S&I (May-June 2007 and May-June 2006). I thought Id just post a few links that show both how successful Nintendo has been to date and how it continues to expand its horizons for the future.



Recent reports at VG Chartz show that the Wii is close to overtaking the Xbox 360 for most units sold amongst the newest generation of consoles. That means that Nintendo has sold nearly as many units in 9 months as Microsoft has in 21. Sony lags behind, a distance third. They have a nice comparison graph here.

Any Wii owner can tell you that it isnt uncommon to work up a light sweat playing Wii Tennis or Boxing, a fact that hasnt gone unnoticed at Nintendo. Last month at the E3 Media and Business Summit, Nintendo announced plans to further expand the fitness jobs addressable by the Wii via a new accessory and game (if you can call it that) called Wii Fit. Judging by the cool demo video it seems pretty spiffy. Look for homes (retirement and otherwise) to continue buying Wii consoles as fast as Nintendo can make them.

We're told to drink 8 glasses (64 ounces!) of water a day. It is a tall order for most of us. Why is it so hard to drink all that water? Lets consider the jobs to be done relevant to water consumption; the things consumers are really trying to do when they drink or consider drinking water. Its pretty easy to brainstorm some:

"Get me hydrated
"Quench my thirst
"Lighten my load at the grocery store" (before I got a car and I walked to the grocery store with a backpack this was a very important job for me!)
"Make sure I'm getting fresh, clean water (no icky bacteria or contaminants that are bad for me)"
"Keep my calorie consumption low"

To get these jobs done people resort to compensating behaviors. They add flavor to their water by squeezing in lemon or steeping in slices of cucumber or berries. They purchase flavor packets that stir into water such as Kool Aid and Crystal Light that are small, easy to carry home and easy to store on the shelf. They purchase bottled water and refill the bottles at a water fountain.

Procter & Gamble has recently launched an extension to their PUR water filtration brand that targets these Jobs. The Flavor Options SKU lets consumers insert a flavor cartridge into a redesigned PUR pitcher or the faucet-mounted version. Users press a button when they want to add a flavor and can vary the level of concentration of flavor they want. The PUR Flavor Options package comes in Raspberry, Strawberry and Peach and contain no calories, no artificial colors or flavors. They use sweeteners like Splenda. It seems like it is a great alternative that would delight many consumers, providing a relatively inexpensive and healthy way to encourage more water and less soda for adults and children.

The pitcher sells for between $25 and $29 and you'll have to pay about $10 for two flavor packs. According to the package, each glass costs as little as 7 cents (vs. $1+ for bottled water or soda). The business model is nothing new to P&G a device plus a consumable (the blade and razor model). However, this does represent a different way to sell beverages and is disruptive to the bottled beverage industry by making it simpler and more convenient to get a tasty beverage.

Even if this particular application of the technology is not a blockbuster hit, think of all the things that could be done using this technology. This delivery mechanism could be used to add caffeine, vitamins or medicine to water. As always, we would love to hear your thoughts. Im definitely intrigued by the concept. Now if only I could taste it before I invest in the system and cartridge....

We wrote in December about the trend of dermatologists adding cosmetic procedures to their services as part of the larger trend of medical procedures moving from specialized to general practitioners. Continuing the trend even further, cosmetics companies are hard at work disrupting the dermatologists by launching products nipping (and tucking) away at some of the simpler medical procedures.

According to the American Academy of Plastic Surgeons, minimally invasive procedures like Botox, laser skin resurfacing and injectable soft tissue fillers are the largest and fastest growing area of cosmetic medicine. From 2000 to 2005, these procedures grew 53% to just under $8.5 million compared to a 5% slight decline in actual surgeries to under 1.8M.

Its not surprise then that one of the fastest growing of the minimally invasive procedures, lip augmentation, is squarely in the sights of the cosmetics industry.
Medical grade injectable fillers like Restylane cost between $500 and $1000 per injections and work for around six months before they are absorbed by the body. Beauty companies like DuWop and FusionBeauty, have launched "good enough topical varieties aimed at non-consumers that work for around six to 48 hours and cost less than $50. The topical products work in a variety of ways. Some, like DuWops aptly named Lip Venom, coat the lips with a mild irritant which reddens the skin and promotes blood flow to the area a little like the sting you get eating a hot pepper. More sophisticated formulations claim to affect collagen or hyaluronic acid, a compounds produced naturally by the body that keep lips and skin full and which decrease with age. (Both compounds are staples of doctor-performed injectable procedures.) One of the most popular products, LipFusion, which hit the market in 2005, claims to use hyaluronic acid and dehydrated "marine collagen microspheres which are absorbed by the lips and attract moisture. Yes, you are plumping your pucker with fish goo.

The sales figures for these projects are similarly fat. At beauty retailer Sephora, sales of plumping lip glosses rose from $1.7M in 2003 when DuWop hit the market to over $34M in 2005. During a Sephora holiday gift show on the Home Shopping Network in 2006, LipFusion products sold out in less than five minutes.

After

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