saucony
saucony
Jun 22, 2015

Good ideas can come from anywhere, anybody, be low cost and power up your profits as a result

Paul Clapham reports

That’s a good idea! We use that sentence constantly as a positive response to someone’s thinking or handiwork. It’s a big compliment to the listener and a representation of the speaker’s enthusiasm. It’s a reflection of the fact we all like good ideas - indeed, new ideas.

Good ideas are a key ingredient in making businesses successful. But good ideas are not necessarily complex, nor are they necessarily involved with the production process. Many important new ideas relate to the overall business process. As a simple case, do you know why you win a new client? If you ask and the answer is consistent, you can replicate that success each time.

Cultural
Having those ideas and then sharing them within the business is a cultural thing and it starts with a recognition that good ideas can come from anyone. I experienced that in my first job in an advertising agency. The creative director said to me: “A good idea doesn’t mind who had it”. He admitted later he was annoyed that the good idea in question had come from a brand new account executive - me - rather than him, who was paid to have good ideas.

In the same vein, no less a person than the President of the United States has on his desk a plaque that reads: ‘A man can achieve anything if he doesn’t care who gets the credit’. Of course, there’s a very big ‘if’ in that sentence.

Here are a couple of further thoughts from members of the Times 100 Business Champions. They are nearly 10 years old, but the sentiments are as fresh as paint to my eye.

Niall Fitzgerald, then chairman of media and information group Reuters, said: “The effective leaders I have seen are those who have sufficient self-confidence to gather round them people who are better than them.”

Contrast that with the common commercial environment, where the boss is scared to see his subordinates accumulating skills and knowledge he doesn’t have.

Mike Levett, chairman of Old Mutual, a major insurance company, was more positive still on this subject: “Good leadership is helping others to be successful. If you get good people underneath you and give them the right slots, they will lift you.”

Both these comments would frighten plenty of people. To follow such advice demands courage. I have worked in businesses where the principles were espoused in theory, but not in practice and that is self-defeating.

Let’s move on to some examples of where it went right. These anecdotes may be known to you, but they bear repeating:

Bryant and May, the match company, had a suggestions box. One smart employee knew his idea was worth a lot more than the nominal reward on offer for an idea that was used, so he asked for a big sum. Eventually, senior management agreed and it took him less than five seconds to explain his idea: “Put the strike surface on only one side of a box of Swan Vesta.” He was right about the savings and he got his money.

‘Earn from your mistakes’ might well be a motto at 3M. Post-it notes are as ubiquitous as ballpoint pens and they came out of an experiment that didn’t work. Fortunately, the development scientist involved realised the huge potential of the low tack, cleanly removable adhesive he had accidentally discovered. At first his boss saw no value in these little pads of bookmarks - how he perceived them initially. The developer persevered and eventually his boss agreed to a consumer trial. Bingo: world market.

This product was the result of one man’s persistence and 3M has an interesting philosophy: to build success, it increased its failure rate.

Communicate
The key message in the above is ‘talk to your customers’. I am constantly amazed how little it happens. A sign saying: ‘If there’s something we don’t stock, please ask’ is a decent start, but the mother lode is to be found in those short conversations.

As a simple case, could you and your customers benefit from some multipacks? I don’t see athletic socks packed in sevens, but keen runners run daily. Likewise, keen footballers may play and train on four days per week, so four pairs of socks is the right number. Unless you ask them, you won’t know if the demand is there.

There might be another zero cost new product route available to you. We marketing people call it extended usage. Is there something you use or a process you perform that has application elsewhere?

Marmite is a by-product of the brewing industry and I doubt many beer brands in the UK produce as much profit. Who’d buy denture cleaning tablets if they didn’t have dentures? Answer: anyone who has mugs stained by coffee or glasses stained by red wine. It works a treat. I know of a West Country bar specialising in cider that provides its staff with garden clogs as footwear. Why? Because they are decently smart and comfortable, but above all cider repellent - important because cider ruins shoes, especially leather ones.

Opportunity
When summer holidays loom, here’s a further opportunity. Genuine sportswear is increasingly technically advanced. Men in particular love ‘technically advanced’, especially when attached to ‘stylish’. It’s why Apple is one of the world’s biggest companies. So to look stylish on holiday, sportswear that is designed to wick sweat away from the skin is an investment in being cool, in both senses.

The same principle applies in the winter. Head to toe, ski gear is designed first to keep out the cold and second to look smart - without the functionality, the styling is irrelevant. The customer who has never been on a ski slope and isn’t planning to still likes to be toasty warm here in Britain. Every man with receding hair is a potential customer for a ski hat in September onwards and that can lead to the premium priced ski jacket, of course.

You might think everybody is a mile in front of you on this and you’d be wasting your thinking time. What about the above stories regarding Swan Vesta and the Post-it note?

Bargain basement product development
There’s no better example of how low cost product development can succeed than the Big Mac. It’s McDonald’s biggest seller at 100 million units per year in the UK alone. So you’d guess a company of its size would have had a team of food scientists, marketers, researchers and a worldwide sampling team - not to mention a substantial budget - involved in its creation.

And you’d be wrong. The Big Mac was created by one Jim Delligatti, a franchisee in Illinois, whose customers asked him if he could make a bigger product. So he cut the bun twice, put in two patties and some extra relish and the rest, as they say, is history. Total development cost? Less than a dollar.

There are three important lessons all businesses can learn from this. First, Delligatti did the most important bit of marketing perfectly: he listened to his customers and reacted to their wants. Second, in many organisations the Big Mac would have been stillborn because it didn’t originate from head office. Third, you rarely get bargain basement product development: McDonald’s use that big team of experts and large, undisclosed budget as standard practice.

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