One of the biggest challenges companies have today is staying relevant to customers in the face of the accelerating pace of change. When technology is involved (But then, when isn’t it involved?) this challenge becomes even more difficult. Add the “golden handcuffs” of Wall Street’s short term expectations to the equation, and trying something new becomes even tougher. If there is an “if it ain’t broke, don’t fix it” culture involved, it becomes extremely hard for a company to innovate to shift ahead.
Despite all that, innovation in the face of accelerating change is the key to survival, let alone success. So it was the opportunity to hear the experts talk about technology and how businesses today are using it to shift ahead that brought me to the Techonomy NYC conference in mid-May. While, of course, there were folks there regaling the audience about things like the latest breakthroughs in artificial intelligence and Bitcoin, it was some of the “lower-tech” stories that caught my attention.
I was especially struck by the comments on a panel on corporate innovation made by Slava Rubin, co-founder and Chief Business Officer of Indiegogo. Indiegogo is an international crowdsourcing website founded in 2008 that allows users to solicit funds for what they believe and hope are breakthrough ideas. Indiegogo has also now started working with larger, established companies, like GE and Whirlpool, giving them the opportunity to quickly test and evaluate ideas with consumers. Many of these ideas relate to the room where people spend a good deal of their time and, where, surprisingly, there has been little innovation: the kitchen.
Rubin’s best stories relate to refrigerators and the way we dispose of our trash. “For refrigerators,” Rubin joked during his remarks, “innovation has meant going from a cherry wood handle to a walnut wood handle.” As for garbage, he explained, other than having separate recycling bins, nothing much has changed in the typical home. The other thing that hadn’t changed, he said, was the need for consumer product companies to meet profitability benchmarks. For too mamy companies, variations on “innovations“ that might appeal to a small segment of the market but could also diminish short-term profitability typically never make it out of the conference room.
By way of example, Rubin told us GE had been sitting on market research for years that showed there was a segment of the market that really likes chewable ice. Due to the pressures to achieve consistent profitability, however, GE was intent on making reliable refrigerators at the lowest cost possible that would appeal to the largest segment of the market. Why risk adding a feature that might leave refrigerators sitting in dealers’ inventory?
But once it started working with Indiegogo, GE’s development teams thought there might be a, well, nugget of opportunity in the chewable ice segment. So the company prototyped a small counter-top refrigerator called the Opal Nugget Ice Maker too see if it would fly. It did. Consumers were so enthusiastic that they started asking dealers when it would be available. This news eventually made its way up the corporate food chain…and the company shifted ahead.
Another kitchen story Rubin shared was about garbage. Through Indiegogo, Whirlpool’s WLabs was able to raise the funds to develop and launch the Zera Food Recycler, which turns organic compost, including bananas, into dirt in just a day or so. Rubin explained that WLabs was created specifically to speed innovation without the complexity of navigating through the parent’s company’s bureaucratic process.To succeed in business means being able to stay relevant to your customers. Staying relevant means being able to offer things that matter to them and that make life better in some appreciable way. Innovation is essential. Profitability, equally so. As Rubin made clear, for smart companies these concepts are not mutually exclusive.
It’s completely possible to evaluate and fund new ideas based on what consumers want, be it chewable ice or composting solutions, while keeping the primary business units humming along. It’s the way a growing number of companies are successfully shifting ahead. (And since I’m someone who likes chewable ice, it happens to be a way to make consumers like me happy.)