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October 15, 2006
A work related aside
Olivier Blanchard has an editorial post at Corante, quoting Mary Schmidt’s review of the new Kraft Cheese grating concept—a bag containing a wedge of parmesan cheese and a miniature grater. He notes that Kraft can spend bundles on market research but still end up throwing darts in a dark room when it comes to innovation and wonders whether there is a target market that really needs this sort of thing.
I suspect that there isn’t, and I suspect that this was obvious to many of the people that worked on the project. Projects like these occur when (1) companies define themselves as innovative (2) a language of innovation is established and (3) department leaders are able to use this language to gain political capital within the company.
I don’t have any knowledge of Kraft’s innovation process, but the product is perfect for gaining internal alignment within a consumer packaged goods company struggling against a market that seems to demand an endless stream of new products. The product is easy to visualize and understand. The product is low cost, save for R&D involved in the cheese grater. The product saves Kraft several processing steps in powdering the cheese and making sure that the cheese powder does not stick together. Importantly, this is the sort of product that can attract participation across the company. While seeming simple, it is new enough that someone in R&D can become a team player and leap onboard, it is a sure win for someone who might otherwise be struggling in marketing. It supports a series of timelines that can be met and is situated in a familiar market where forecasts are easy to make with numbers that are large enough to attract c-level support.
All that this innovation requires now is leadership, a sponsor, someone who believes in the concept. If the concept is generated at an innovation workshop, the innovator may be placed high enough in the company hierarchy that the benefits of forming a special team become obvious. If the innovation occurs in the context of a divisional or company wide ‘incubator’ program then all the better. If innovation occurs in the context of an initiative that requires “y new product launches” by 2007 then the inventor is making a valuable contribution to an internal metric.
Once the concept has surfaced and a team has formed, there is no backing down short of a market launch. If the product fails in the market, then the team has attempted innovation and failed, learning a great deal in the process. This the product fails internally prior to launch then the team leadership has probably spent a great deal of political capital to no avail. That’s the curious thing about innovation processes: in-market failure can be acceptable, particularly if those failures generate new consumer insight, but internal failure prior to launch is often taken to demonstrate a lack of leadership.
Photo from the Accidental Hedonist website:
Pointless Pontificatin | By jb | 10:08 PM
Comments
john, that's an interesting distinction you draw in the last sentence. do you think the same thing happened with "new coke"? seems ridiculous that marketers would be willing to become the laughing stock of italians and hard cheese-grating americans for the sake of "innovation" or internal political capital. come to think of it, maybe that's not so ridiculous. one point i would make in response to blanchard is that if you were a cheese-grating purist, you wouldn't have to go to whole foods to buy the "real thing." the real thing is readily available at any supermarket, so it's always convenient. i suppose the cheapness and newness of this product would be its only appeal, if there's any. any word on how it's doing?
Posted by: laura at October 16, 2006 05:31 PM
The New Coke initiative was driven from the top of the company in response to the ongoing, very 1980's "war" with Pepsi. Coke, in retrospect, seems to have won this war but the introduction of New Coke (only 3% market share one year after launch) certainly did not seem to help. The push to reformulate and re-launch coke was so big that it is almost an anomaly. In this case, it may have stemmed from a forced panic that "we need to do something" and "we are afraid that we need a new taste in order to take the lead as the actual taste of a new generation." Market data may have supported this. I'd be interested to know whether there was a shift in language at the company and whether c-level officers and middle managers adopted a language of re-invention. I have no idea whether this occurred.
As I remember, there is a decent book (probably out of print) on the New Coke debacle. I didn’t see in on Amazon but I’ll dig a bit.
On the cheese side, most supermarkets carry block parmesan. The audience might be people that are visiting 7-11’s and similar convenience stores in order to pick up grated cheese but who might go to a regular supermarket if there was time. Emergency parmesan purchases, really. This same audience, I suppose, is less likely to have cheese graters at home. At the same time, we are looking for the audience subset that does not want pre-grated cheese, even though the green plastic container should have a much longer shelf life than the block cheese.
Kraft knows how many people purchase cheese at convenience stores. It may be that the thin subset of users who want to grate their own convenience store cheese is big enough to support a product launch. This makes more sense as convenience stores begin carrying larger wine selections as well as pastas and sauces. Having worked through painfully similar innovation processes with other companies, I suspect that convenience store forecasts were developed post hoc, when someone wanted to test a lower bound for acceptable sales.
Posted by: jb at October 16, 2006 10:51 PM
Really fascinating, John. I agree - it seems ridiculous. But your analysis I think nails it.
Posted by: Evan Donovan at October 23, 2006 12:16 AM