“My previous book was about Lego, and that was a story about a company that figured out that you didn’t want to innovate inside the box — that wasn’t going to get them anywhere — and you didn’t want to innovate outside the box because that almost put them out of business, but rather, around the box. Complementary innovations around a core product — the brick for Lego — was what really led them to their recent success.
I got my house painted a couple of summers ago, and the contractor I hired put together a proposal. He helped me choose colors and helped me decide what kind of paint, what things needed painting the most, and how I’d manage on a limited budget. He put together a proposal, and he picked Sherwin Williams paint.
I looked at my favorite consumer ratings magazine, and Sherwin-Williams paint is good, but it’s twice as expensive as another paint that’s equally good. So I talked to him, and I said, “Can’t we use this other paint?” And he said, “Well, yes, we could, but it’s going to raise your price.” I said, “I don’t understand, the other paint is half the price.” And he said, “Yeah, but paint is only about 15% of the total cost of your project. I have to think about all the supplies; I’ve got to line up the labor; there’s the overhead of running a company, etc..”
He said, “What Sherwin-Williams does is help me though the entire process of working with you, from helping you choose your colors — there’s a Sherwin-Williams color consultant — to figuring out how much paint is needed for the primer, and for the paint itself, brushes, tarps, all the other supplies. Then, during the project, it is keeping me supplied — I can return extra primer if I don’t need it. If I run out of something, that Sherwin-Williams rep will be over at the site, delivering what I need. Then, at the end, he helps me put together that next proposal. Because there’s always a next proposal, as any homeowner knows.
I looked, and it turns out within a five or 10-minute drive of my house, there are more Sherwin-Williams stores than there are Starbucks, and that’s because they realized who their customer is. It’s not me. I’m the end consumer, of course, and I’m the one that has Sherwin-Williams paint on the house. But it’s that small business, the painting contractor, [that they focus on]. Sherwin-Williams, like Lego, realized it’s not so much about the product — their product is a can of paint — it’s about their innovations around the product that make that product more valuable.
I wanted to write a book for companies that wanted to try this approach to innovation. I don’t argue that there’s one best way to innovate, but it seems like it’s a tool that every innovation leader should have in their tool belt.”
When most people hear the word innovation, they think about Uber, Airbnb and Amazon — disruptive companies that upended entire industries with a radical new way to do business. But Wharton operations, information and decisions practice professor David Robertson argues that this view is too narrow a definition of innovation, and one that is not useful to most companies. In his book, The Power of Little Ideas: A Low-Risk, High-Reward Approach to Innovation, Robertson talks about a more practical way companies can innovate: by focusing on complementary actions around a key product. He teaches innovation and product development at Wharton and is the host of Innovation Navigation, a Wharton Business Radio program. Robertson recently spoke to Knowledge@Wharton about his book.
Full interview @ https://knowledge.wharton.upenn.edu/article/power-little-ideas/?utm_source=kw_newsletter&utm_medium=email&utm_campaign=2017-06-01