Innovating Innovation

TRANSFORMATIVE INNOVATION

Focusing solely on AI or patents, we lose sight of the larger context of what innovation really means. Future literacy is a rarity nowadays, customer focus is in many cases still minimal, and systemic collaboration is lacking. What we need to do to overcome these obstacles to our progress is to innovate in the area of innovation itself.

We need a culture of innovation capable of uniting progress with circularity, social justice with growth and artificial intelligence with the intelligence of our bio-brains. People, brands and businesses must embody this culture of innovation to make the world a better place. We are thus talking about transformative innovation.

Our threefold approach can be instrumental in achieving progress, the elements of which are:

1. Imagining future cultures

2. Practicing co-evolution

3. Mission-oriented innovation

IMAGINING FUTURE CULTURES

THE TEMPLATE FOR TRANSFORMATIVE INNOVATION

Human behavior is contextually oriented. We think and act differently depending on what room or situation we are in, or who we are with. Thus in pursuing innovation with a 5-10 year time horizon, we need an understanding of how people will make decisions in future contexts and what beliefs, goals and motivations will inform their cultural actions.

FROM TARGET GROUP NEEDS TO FUTURE MINDSETS

In innovation processes, the fundamental task is to gain an understanding of the factors that will influence categorical change and the impact of this change on people. The practice of pursuing trends in innovation processes was generally abandoned some fifteen years ago. The last ten years have seen the integration of an ethnographic approach in ‘design thinking’. To drive forward innovation today, behavioral insights are needed to serve as springboards for the design of future living environments. These “future mindsets”, as we call them, are a way of segmenting consumers according to their emerging and behavioral longings and consumer motivations, rather than by demographics.

People have ideas about what a ‘better life’ or better version of themselves could look like. These projections or visions of a desirable future give direction and energize one’s actions. One may for example wish to become someone who ‘lives only in the here and now’ or ‘takes on the system’. Certain ideas of a ‘better life’ that are highly popular now and rapidly gaining followers we refer to as mindsets. There are sector-specific mindsets, i.e. mindsets regarding luxury, energy or health. Each particular mindset involves a desired image of who you wish to be by virtue of consuming luxury, energy or health-related goods or services.

Ongoing cultural change means that consumer images of who they want to be constantly change as well, thus brands need to be concerned with people’s future mindsets. Digitalization, for example, is not just altering our cars, cities and ways of self-medication, it is altering our mindsets as passengers, as smart citizens and as layman doctors. To preserve their market relevance over the long term, brands must adapt their value proposition in light of disruptive changes, and to align with future mindsets.

Thus for an insurance company, for example, the question is no longer ‘what revenue will be required to cover claims’ but rather ‘what attitudes and beliefs around the idea of risk will be relevant in the future. Innovation in the OTC segment of the pharmaceutical industry is having tremendous impact, as people become less focused on doctors’ opinions and what medical chemistry can do for them and more on their longing to help support the body better regenerate itself. In responding to these cultural currents, opportunities for innovation open up as we investigate what offers could be relevant to meet existing desires and needs.

HOW DO INNOVATION OPPORTUNITIES FOR A FUTURE CONSUMER CULTURE ARISE?

We leverage a global network of futurologists and cultural researchers to help us understand emerging beliefs, longings and narratives, who elaborate visions we then analyze to gauge the corresponding ramifications for consumer culture. We also form qualitative online lead user communities to conduct multi-day in vivo studies of shifting cultural practices. We then read and evaluate social media discourse, primarily in the adjacent categories. Our investigations consistently reveal how consumer culture is not concerned with categories. For example, we often encounter entirely new competitors entering the market from adjacent categories, who are embodying the new narratives more credibly, sometimes, than traditional product brands.

These cultural innovation research methods help identify areas where opportunities lie and allow cultivating company-wide understanding around future consumer cultures, providing key training regarding these potential futures.

"This is how we evolved from
cave dwellers into space explorers."

CO-EVOLUTION

THE ENERGY FOR TRANSFORMATIVE INNOVATION

In addition to future competency, it is also important to establish agile, iterative collaboration between brand and people. Those who take the idea "people-centered innovation" seriously are aware that it’s not just the consumer but rather the larger human business ecosystem that is of importance. Innovation of a truly transformative nature requires more openness and more permeability, in all directions. We aim to inspire our clients in this regard so they can get out of their silos and rethink innovation, making them aware early on of the needs of different stakeholders and presenting relevant ideas . In this fashion we challenge established beliefs within the organization.

FROM MARKETS TO COLLABORATORS

The more complex an innovation process is, the more important it is get customers and stakeholders involved in product development and marketing. Doing so makes the resulting offerings more relevant while strengthening relationships and heightening customer loyalty. Innovation in circular, regenerative systemic requires constant exchange throughout the entire ecosystem. Feedback and the ideas from different stakeholders are crucial to develop brands, products, services and marketing campaigns that will meet the needs of all parties in the production chain.

Co-creative platforms together with consumers, whether temporary or permanent in nature, can be a solution for certain objectives. One such platform is LEGO Ideas, on which customers can submit their ideas for new LEGO sets they would like the company to offer. The customer community then votes on the ideas presented, and LEGO subsequently makes the sets receiving the most votes. Through this co-creative approach LEGO engages with customer opinion early on in product development to ensure a high level of product satisfaction.

Another option is to hold a ‘hackathon’, sitting down with suppliers or start-up entrepreneurs facing similar challenges, to discuss innovations in production, for example. Dialogue and input on the issues from varying perspectives facilitate coming up with new approaches, viewing the learning process as a co-evolutionary exercise in which everyone benefits.

HOW DOES CO-EVOLUTION WORK?

The collaboration system employed is a key element in the innovation process. You have to get the right individuals – the thinkers and doers – together in the various phases, starting with the vision work and on down to prototyping.

There are four primary pools of human competency from which to recruit:

1. Lead users – individuals who can provide valuable insights in iteration loops conducted before, during and after innovation workshops, who can deliver the necessary final touch for concepts and ideas.

2. Experts – who may represent specific categories or be involved start-ups, including culture and future experts. These individuals can provide businesses perspective and insights that stimulate and enable innovation through new partnerships.

3. Business partners – to collaborate with on specific business challenges

4. Employees – who are essential to the innovation process. For innovation is a culture that must be lived internally throughout the organization.

The "Innovation Factory" we formed at the non-profit aid agency Welthungerhilfe is an instructive example of how to go about this. In this project we conducted an international call for proposals designed to get us engaged with innovative mindsets within the organization, i.e. with individuals whom we then entered into a co-ideation process. Hundreds of people applied to participate, affording us a tremendous opportunity in that all applicants who were not selected for the process were still usable as an external sounding board, ranking their colleagues' ideas online. This created real energy to fuel a vibrant culture of innovation within the organization, from which many meaningful innovations later proceeded—such as the highly very successful Child Growth Monitor.

MISSION-ORIENTED INNOVATION

HARNESSING TRANSFORMATIVE INNOVATION

Innovation work needs to be tied to the brand, yet many businesses still see innovation as separate from brand management. Their resulting innovations are not linked to the brand purpose, being instead predicated upon forecasted demand or technological advances.

Corporate ESG and sustainability managers have surprisingly little to do with innovation beyond packaging regulations, and this is worth rethinking. Similarly, new impact initiatives are often planned in separate processes, which is why there are a lot of brands out there planting trees and using 90% recyclable packaging who are wondering why it’s not working.

Transformative innovation is innovation in which the promise and the mission of the "one brand" (comprising the corporate, employer and consumer brands plus ESG goals) translate into a cohesive brand offering and coherent brand behavior. This kind of "walking the talk" is crucial for a credible brand experience; to elaborate on the phrase, "you gotta walk the walk first".

FROM WORDS TO DEEDS

Corporate brands with a mission are committed to observing their cultural and social responsibilities in a process that involves innovation. Both customers and employees prefer to be associated with such companies, as indicated by a German consumer goods brand survey in which 79% of respondents said they believe that companies bear responsibility for having real positive impact on the world’s problems. Three out of four said that social impact brands favorably influence their buying behavior, generally. What's more, 61% said they might in future boycott brands that add no value in the area of social responsibility.

And corporations have taken notice. Our client edding for example, has already realigned its entire corporate strategy to reflect a ‘profit-for’ mentality. Profit-for (as opposed to ‘for profit’) is an orientation in which social and environmental objectives are inseparably tied to the for-profit business model. And this is now the paradigm for all strategic consumer innovation connected with the edding corporate brand, including products, customer service, M&A and investment decision-making, and extending on into the employer brand through cultural programs for employees.

MISSION-ORIENTED INNOVATION ... BUT HOW?

Tying innovation to the brand mission requires the right mentality, to begin with. Innovation processes should be supported by the entire system, and many innovations are systemic in nature, having internal as well as external impact.

A brand culture that takes on a renewed vibrancy through innovation flows out from employees to take external effect. Innovation is first and foremost a matter of internal corporate culture, as a case study of the company Patagonia indicates.

Patagonia has implemented several culture innovations including the “let my people go surfing” flexible work hours scheme, a number of volunteering programs and structures created to provide financial and other support for employees who are arrested in a peaceful environmental protest. These culture innovations further the company’s efforts toward the ESG goals, strenthening the corporate brand, the consumer and the employer brand alike.

Smaller businesses like BLUME 2000, our client, are out there showing the way forward. Blume 2000 systematically made its brand mission of “renewing urban residents’ relationship with nature” the guiding slogan for all of the organization’s product innovation efforts. Examples include the company’s “make-your-own-bouquet bars” and DIY flower boxes, as well as workshops for the public on making bouquets and working with dried flowers. Interested employees can take seminars on beekeeping and get involved in the company's own honey production. Today the firm’s products and services are aligned with its brand mission, and successfully attracting customers and new employees.

We hope the transformative innovation approaches discussed here will inspire you to explore new possibilities for corporate innovation that can ultimately bring about a new era of social responsibility in consumer products. We look forward to receiving your suggestions and comments!

Author: Europa Bendig

Europa Bendig founded STURMundDRANG with the idea of creating more meaningful, consumer-relevant offers. For 20 years, she has been advising companies, particularly in the pharmaceutical, beauty and sustainability sectors, on innovation processes and international brand and portfolio strategies. She specialises in understanding future needs and manages to create relevant and memorable brands for people.