The person tasked with moving a company into new markets is on the receiving end of a firehose. The onslaught of ideas, internal meetings, external partnerships, interviews, and a huge array of immediate imperatives can feel never-ending. Where to begin?
The answer of course depends on circumstances. If the CEO is strongly behind a particular idea, by all means look into it. But in the ideal world the marketer or program leader should strike a balance between deep-dives into a handful of priority areas and broad-based efforts that get the rest of the company involved in the program. These two thrusts yield both near-term opportunities and organizational enthusiasm that will be helpful down the road.
The deep dives of course need to be linked to strategy, and they should be reviewed at regular check-points with senior management. Whirlpool Corporation once picked a select team of 25 from throughout the company and sequestered them for months in the Italian Alps to dream up a totally new concept. They were given complete creative freedom. The result? An idea for people racing stationary bikes against each other over the Internet! That gem has yet to see the light of day.
Innovation Is Change That Creates A New Dimension Of Performance. ~ Peter Drucker
If the quest for new markets is to be coupled with a push to make the core organization more innovative, the program can choose among several approaches to outreach. It is important to anchor people in strategic intent and provide them with a simple, stripped-down toolkit for reframing long-established markets. Companies can then deploy:
- Internal program ambassadors who have been trained in the patterns of new markets and can jump-start initiatives throughout the firm as they are called upon by their peers.
- Events that get individuals to form their own teams and create ideas in a very short-period of time. Often called Hackathons, these efforts yield rough sketches and half-formed ideas, which lead to energizing give-and-take discussions with management rather than the usual buttoned-up business plan reviews. Hackathons are different from brainstorming sessions, as they focus teams on creating a single concept with enough detail to understand how it would really work in practice.
- Competitions for teams throughout the company to submit business plans. Note that competitions can be better suited for industries like software that have discrete product lines than for fields like health insurance where offerings have more inter-dependencies among corporate functions. Competitions also create losers, which may undermine efforts to build enthusiasm and momentum.
- Efforts at “crowdsourcing” to generate ideas from customers. Because people tend to suggest modest enhancements on what they already purchase, and because new markets can hinge on the details of ideas, many firms find it most fruitful to have in-depth discussions with a small number of customers about unmet needs and then to look carefully together at potential opportunity areas.
Inevitably, efforts to engage the rest of the organization or the outside world take a lot of time. Program leaders are often wise to generate some quick wins through first pursuing a small handful of tightly-focused opportunities. This generates momentum and interest from the rest of the company which helps considerably in making outreach more impactful.
The most important imperative is to get moving fast. The process of developing a new markets program could be endless. Do what you can over a period not longer than four months, then make it real by pursuing a few projects quickly. The actual path taken by the program will set key precedents that matter much more than abstract design.
Avoid hype. One company I worked with launched their program at an event where a mid-level executive dressed as a super-hero. I asked him who he was. “Innovation Man.” It was a lot of fun but immediately created cynicism. It also proved that some men just should not wear tights.
How One Brand Evolves And Thrives
Clearly, it is difficult to create the new while executing on the old, but one company stands as a compelling example of what a highly deliberate approach to the mission can do.
Once a leader in making glass lightbulbs – by hand – Corning has come a long way from its 19th century origins. This nearly $6 billion firm invented heat-resistant glass for baking (Pyrex), shatter-resistant containers (Corningware), and the first process for mass producing cathode ray tubes for the nascent television market. It made the window glass on America’s first space capsules, dominated the market for automobile catalytic converters, and pioneered optical fiber. The company is constantly inventing new markets. In 1984 it commercialized LCD glass and today supplies more than half the glass screens for the world’s electronics. Today, around 70% of the company’s revenue comes from products that did not exist 10 years ago.
The firm’s evolution is due in part to its willingness to shed businesses that have lost their growth potential. Corning is no longer the firm that makes Pyrex, Corningware or many other products that it created. The money generated from these asset sales has funded a continuous quest for new markets.
Yet this inspiring tale of reinvention almost ended in tragedy. Corning was a huge winner in the Internet boom of the 1990s, dominating a highly profitable fiber-optic industry that was growing at lightning speed. It made major investments in research and production capacity to stay at the crest of the wave. Then the dot-com bubble imploded and nearly took the company down with it. Nearly 50% of employees were let go. The stock lost 98% of its value.
In 2002, at the depth of the company’s troubles, Corning invested to create still more new markets. The firm built an Exploratory Markets and Technologies group reporting to the Chief Technology Officer (CTO). Early on, it organized a workshop bringing together more than 150 of its scientists and commercial people. For one and a half days, the group listened to 14 external speakers ranging from academics to industry and government experts in fields such as communications technology, health, automotive and energy. The speakers did not try to predict the future or ask for specific products, but rather described the major challenges they were facing in their work. Corning’s staff then split into 11 groups that over a half day shared what surprised them, what big shifts were creating new markets, and how Corning’s competencies in materials science could play a role. They sought problems, not solutions.
Through this event, Corning identified several growth fields. One was the hybrid electric powertrain, the first really new powertrain technology in decades. The company studied the needs of hybrid vehicles in detail and it identified an opportunity area in the power surges caused by both acceleration and braking. The capacitors then in use were not ideal for the job, so Corning started to define what an “ultra-capacitor” might do. It identified applications beyond hybrid vehicles to a range of equipment including garbage trucks and earthmovers. The firm looked not just at the size of the market and its needs, but also at its receptivity to new technology, the process by which new technologies had been adopted, the value that would be created for the customer, the full system into which the products would be inserted, and the range of traditional and new competitors it might encounter.
Exploratory Markets, a part of Corning’s Strategic Growth unit, took on the challenge. The group is co-managed by a PhD in materials science as well as a marketing expert, and its 14 staff members have a wide range of backgrounds. It seeks people who have worked in at least a couple different industries with several technologies, so that they can recognize patterns of new market development. It manages a diverse portfolio based on metrics such as timeframe, impact on existing vs. new businesses, return on investment, and risk. It also measures the quality of its processes such as project churn, making decisions quickly, and the number and depth of assessments. There are no financial metrics at projects’ early stages and no expected value calculated for the portfolio.
Corning has found it best to continue building new businesses within the Strategic Growth group, rather than transition them to existing lines of business that might not fully exploit the opportunity. As Exploratory Markets’ co-head Daniel Ricoult explains, “The downside is that late stage projects take a lot of resources, but we have to be disciplined about keeping focus upstream as well.” Projects in their later stages often leverage external resources, so the group is able to keep its balance of incubation vs. business-building.
Governance of Strategic Growth’s projects is split. For early-stage explorations, the CTO chairs a Corporate Technology Council that draws on technical resources throughout the company. Later stage efforts are governed by a Growth and Strategy Council which is chaired by Corning’s CEO.
While the company has high hopes for ultra-capacitors, it has many other initiatives under way. A full 50% of Corning’s R&D budget is devoted to projects outside of existing businesses. The company’s 165 year evolution is set to continue in exciting new directions.
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