Renovate Before You Innovate: Why Doing the New Thing Might Not Be the Right Thing - Rilegato

Zyman, Sergio; Brott, Armin A.

Rilegato

ISBN 10: 1591840546 ISBN 13: 9781591840541

Casa editrice: Portfolio, 2004

Riassunto

A marketing expert and author of the best-selling The End of Marketing as We Know It demonstrates the power of renovation over innovation within a business environment, explaining how to revitalize marketing strategies, improve growth, and retool one's business in order to improve the chance for success. 30,000 first printing.

Su questo libro

L'autore:

Sergio Zyman is the bestselling author of The End of Marketing as We Know It as well as the chairman of the Zyman Group, a strategic consulting firm whose clients include EDS, ConAgra Foods, Alcoa, and Blockbuster. He is also the namesake of Emory UniversityÂ’s new Zyman Institute for Brand Science.

Armin A. Brott is a business writer.

Estratto. © Riproduzione autorizzata. Diritti riservati.:

Introduction

Everywhere I go, it’s the same story. Over lunch with a client, the VP of marketing talks my ear off about all the new products the company is planning to introduce. At the quarterly meeting of one of the firms whose board I sit on, the CEO spends twenty minutes describing the new markets the company is getting into and the acquisition deals they’re working on. And these guys aren’t alone. Overall, more than 60 percent of S&P 500 firms incorporate the concept of innovation into their mission statement, use the term “innovation” in marketing and branding communications, or cite innovation as part of their strategy in their annual reports.

What’s the big deal with innovation? Well, most corporate execs know this basic formula for business success: Increased sales lead to increased cash flow, which in turn drives growth. And ultimately that’s what it’s all about: Firms that have a proven history of top-line and bottom-line growth get rewarded by Wall Street with higher valuations (price-earnings ratios) than other companies in the same category. Just think of Coca-Cola, L’Oréal, Procter & Gamble, and Sony.

However, since many attempts at marketing have failed to create both top-line and bottom-line growth, CEOs have decided that the only way to drive growth is to change the rules of the game, gut the old system, and build a new one from the ground up. In other words, innovate. Most dictionaries agree that innovation is “the act of introducing something new” or “a new idea, method, or device.” Both of those definitions work for me, but I think it’s also fair to say that innovation is “using your existing assets and core competencies to do something different from what you’re already doing.”

This fixation on innovation has spawned an entire industry of consultants and authors and businesses whose entire purpose in life is to support and promote innovation. If you do a quick search on Amazon.com for “business innovation” you’ll find two thousand titles. And if you Google “innovation consultant” you’ll get more than 450,000 hits.

Two of the biggest innovation gurus these days are Tom Peters and Gary Hamel. We’re all Michelangelos, they say. We need to forget everything we know, “de-risk” unfamiliar opportunities. Distance is dead, destruction is cool. Innovation rules! Sounds fantastic and inspiring, doesn’t it? And it is—except for one small thing: For the majority of companies out there, it just doesn’t work. All it offers is a quick fix—kind of like a sugar high: You feel better for a while, but when the effect wears off you’re in worse shape than when you started.

At its core, this approach to business growth is simply lazy. Actually, it’s worse than that; it’s dangerous. But both Peters and Hamel have struck a chord with a broad base of companies that are now trying to grow their business by turning their back on what they need to do first, which is fix their basic value proposition—what it is that they offer their existing and prospective customers.

So now we’ve got a bunch of companies that have forgotten all that boring stuff that made them successful in the first place and are getting into areas they don’t know anything about and have no business being in at all. A lot of these companies are showing their commitment to this strategy by creating a new position: CIO. No, that’s not Chief Information Officer. It’s—yep, you guessed it—Chief Innovation Officer. And these CIOs are rattling on and on about how the company is “retooling” and “charting a new course” and “exploring new opportunities.” And let’s not forget about “driving double-digit top-line growth.” The fact that all that top-line growth will probably come at the expense of the more important bottom line doesn’t seem to bother anyone. Except me.

In my view, innovation is just another word for “giving up.” It’s saying that things are so bad that it’s easier to get into an entirely different line of business than to deal with our problems. And this whole “innovation culture” is just the latest in a long line of business fads. Just think of all the ones that have come and gone over the years: We’ve had one-minute management, total quality management, management by walking around, matrix management, management by objectives, theories X, Y, and Z, reorganizing, restructuring, the experience curve, downsizing, right-sizing, sensitivity training, and quality circles. Every single one is dead and gone.

In defense of fads, most of them are actually based on a good idea. The problem, though, is that the fadmeisters too often try to condense complex ideas into a few sentences. All you have to do, they say, is attend our seminar (or hire us as your consultant) and we’ll cure you of whatever ails you. Just a few years ago, for example, everyone was talking about CRM (customer relationship management), and companies ran out and plunked down tens of thousands of dollars for programs that promised them the moon—or at least well-managed customers. The smart ones figured out pretty quickly that good customer relationships don’t come in a box. The rest kept trying to make the magic program work or moved on to the next trend.

In the 1990s, it was all about knowledge management and process reengineering. And technology, the Web, and the information economy. Managers stopped trying to drive growth the old-fashioned way and bought into the Wild West mentality instead: Get there first, pay exorbitant amounts of money for eyeballs, drive traffic at any cost. Business schools followed closely, starting MBA programs on entrepreneurship and information technology and forgetting about the basics—things like return on investment. Of course we all know how that turned out: Most of the high-flying dot-coms ended up sinking into the dot-swamp.

After a few decades of drinking bottle after bottle of corporate snake oil, an entire generation of managers and executives has now forgotten what it really takes to create organic growth. Even worse, there’s a whole new generation of up-and-coming executives and managers who never even learned the skills necessary to drive organic growth in the first place. So we have a situation in business today where the old guard want to leave a legacy, and the new guard want to make a name for themselves on their way up. And both generations have come to the conclusion that there’s no better way to make a big splash than by doing something totally new. In other words, innovating.

But too many of them—old and new—haven’t really thought about what that means. Besides stroking their own egos, the implicit assumption behind most corporate philosophies of innovation is that Wall Street will continue to reward them with higher multiples based on the “higher optionality” that all that innovation is expected to yield. Unfortunately, as you’ve no doubt seen for yourself, and as we’ll discuss in detail in the following chapters, it rarely works that way.

At this point, you may wonder where I get off making these pronouncements about what works and what doesn’t. Well, here’s your answer: I’ve spent more than thirty years managing and renovating some of the world’s most successful brands. At one of those companies, The Coca-Cola Company, I put together a team that increased worldwide annual volume from nine to fifteen billion cases—the most explosive growth period in the company’s history—and quadrupled the company’s stock price. And since leaving Coke in 1998, I’ve consulted for leading companies in a variety of industries all over the world.

I’m not the kind of guy who spends a lot of time on theoreticals and hypotheticals. I deal in what works—not just on paper, but in real life. Throughout this book I’ll tell you about dozens of companies that have either renovated successfully and gained tremendously, or that failed to renovate and have suffered the consequences.

In Chapter 1, I’ll talk about the current obsession that companies have with innovation, and I’ll show you how that obsession has caused companies to lose track of what made them successful. I’ll also introduce an idea that I’ll keep coming back to throughout this book: the critical difference between core competencies (what you know how to do) and core essence (who you really are as a brand) and why a solid understanding of core essence is at the heart of any business success. I’ll finish this chapter with a discussion of some of the major pitfalls of innovation.

In Chapter 2 I’ll discuss exactly why renovation is a far better alternative than innovation. On the most fundamental level, the difference between the two is one of competing philosophies. Innovators leverage their core competencies and say “Let’s start with what we can build and let’s see whether we can sell it.” Renovators, however, leverage their core essence and say “Lets find out what we can sell and then we’ll figure out whether we can make it.” The former gets you into trouble. The latter helps you grow your business organically.

Chapter 3 is devoted to a thorough discussion of the first element of my renovation program: Renovate the way you think. Too many companies achieve a little success and then get fat and lazy. They see themselves as the undefeated champion and look down their noses at would-be competitors. I’ll also talk about two other important ideas that get companies into trouble. First, too few companies track their spending, let alone measure the results. Second, they fall into the trap of constantly lowering their prices.

As simple as it sounds, if you don’t know where you’re starting from and where you’re going, you can’t get anywhere. In Chapter 4, I’ll show you how to assess both of those questions and how to come up with a solid destination statement that clearly articulates how you want the consumer to think, feel, and act in relation to your company and your brand. I’ll also discuss the importance of making any destination consistent with your core essence, because if you don’t, you’ll end up innovating instead of renovating and the r...

Su questa edizione

• Editore: Portfolio
• Data di pubblicazione: 2004
• ISBN 10: 1591840546
• ISBN 13: 9781591840541
• Rilegatura: Copertina rigida
• Numero di pagine: 240