Five Ways to Seed Innovation

Discussion
Oct 10, 2013

Through a special arrangement, presented here for discussion is an excerpt of a current article from Insight-Driven Retailing Blog.

So you’re a retailer and you want to plant the seeds of innovation at your company. Where do you get started? Here are five suggestions:

1. Find sources of inspiration

You and your team need to be exposed to many ideas from lots of different industries. It’s unlikely a perfect solution to a problem will drop in your lap. More likely you’ll see how someone in a similar industry solved a similar problem, and you’ll be inspired to do the rest. I follow general technology sites such as Ars Technica, Mashable, MIT Tech Review, ReadWrite, TechCrunch and The Verge to look for applicability to retail.

A good understanding on where technology is going can also be found by reviewing ARTS blueprints, analyst briefings and industry publications/sites such as Chain Store Age, Internet Retailer, Retail TouchPoints, RetailWire and RIS News to name a few. It’s also important to cultivate ideas within your own organization. At Oracle Retail, we have a yearly science fair in which employees form teams and are given time to build out ideas and experiment. I’ve also been invited to retailers’ "vendor innovation weeks" where various vendors are invited to pitch ideas.

2. Set aside resources to experiment

Many retailers have decided to acquire a start-up to form an internal lab where engineers are free to experiment with new ideas. Others create a rotation of engineers through lab assignments to spread the wealth. Whether there are dedicated or ad-hoc resources, the important thing is always to be testing new ideas.

3. Establish partnerships

Vendors, especially start-ups, want to partner with retailers to test ideas. It’s important to cultivate partnerships with regular meetings and occasional proof-of-concepts. You can get access to multiple start-ups by staying in touch with venture companies or attending conferences.

4. Streamline processes

It’s easy enough to plant the seed, but existing processes are sure to strangle any seedling. Some amount of capacity needs to be set aside to cultivate ideas when they spring up. Forcing someone to create a huge marketing pitch and wait six months for hardware will not advance the cause. Make it easy to start, pivot and, if necessary, fail fast.

5. "Non-stupid vs. brilliant"

I was once discussing innovation with former co-worker and retail IT veteran Jerry Rightmer in a bar in San Francisco when he said something that has stuck with me. Paraphrasing, he said it wasn’t necessary to have a brilliant idea, only a non-stupid one. If the idea has any merit, then follow the thread and see where it leads. From one idea, many others may sprout with a little investment. Failed projects are full of valuable learnings and will likely lead to better ideas in the future.

What should retailers do to encourage innovation within their organization and supplier companies? What do you see as the biggest sources of inspiration as well as barriers for retailers?

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25 Comments on "Five Ways to Seed Innovation"

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Matt Schmitt
BrainTrust

When discussing innovation, I’m often surprised at how seldom questions are asked like “What problems do we need to solve?” and “What are pain points of shoppers and what is most important to them?”

Indeed there are plenty of other ways to start the process of exploring and discovering innovative ideas. Looking at other industries, tracking technology trends, and recognizing good things being done by competitors are great. But starting from a fundamental problem or objective, although seemingly obvious, is a great way to start the conversation.

Debbie Hauss
BrainTrust

Fear is probably the biggest deterrent to innovation. Test and learn is probably one of the best methods to weed out great ideas from bad ones, but retailers have to be willing to stick their necks out a bit in order to uncover the strategies with the greatest potential.

Especially today, as the fight for customer loyalty and purchases is heating up to a degree the industry has never experienced before, being innovative will help cement the final sale.

Nikki Baird
BrainTrust
I just came from a conference where a guy from Stanford’s d-school presented on innovation and design. He made a case for starting with “empathy” – whatever problem you’re trying to solve, or process you’re trying to improve, you should first seek inspiration by walking a mile in the intended “client” or customer’s shoes. I think this is fantastic advice. I’ve been recommending to retailers for a long time the first step they should take in trying to innovate around omni-channel is to look at their channels through their customers’ eyes – line up all of their digital properties and see how they look right next to each other. Set themselves specific objectives: buy a black leather jacket, and see how it works. Observe customers as they navigate digital channels and then go in the store. Do the analysis to figure out the top paths to purchase that your customers take. Is it research online and buy in store? Is it browse in-store and transact online? It’s very difficult to truly understand the problem – and to seek inspiration – if you have not walked a mile in the shoes of the person you’re trying to help/influence/change. And the biggest… Read more »
Ken Lonyai
BrainTrust

All solid suggestions from David, but I’d like to add one more: talk with customers.

Alleviating customer issues and uncovering needs as perceived from the user point of view can also lead to innovations. In fact, there’s a chance that customers will simply state “Why don’t you….” and hand over something very useful.

Max Goldberg
BrainTrust

All good suggestions. I would add “listen.” Listen to customers and to employees. Frequently, some of the best ideas come from people who are right in front of you.

Adrian Weidmann
BrainTrust

Like many large corporations, retailers do not empower their employees to be innovative. Corporate culture often drives innovation out the door and is replaced by people hiding in their cubicles, hoping to stay off the radar and remain an anonymous member of the “noise floor”.

Innovative thinking requires failure. Corporate culture needs to nurture, yet manage the innovative process. I really like the idea of an annual “science fair”. It allows new ideas to be presented to a broad audience rather than isolated within a single department where internal politics can (an often do!) kill innovation that would be good for the shoppers. I’ve been in many situations where great ideas that have proven successful in a pilot have been killed because they conflicted with the “status quo”. Instead of changing the status quo for the proven benefit of the shopper, it was easier to kill the idea. It was determined that it was simply “too difficult to change the system.”

Robert DiPietro
BrainTrust

The largest obstacle for innovation is existing process, and not invented here syndrome.

Innovation can come in many forms. Here are two examples of how to harvest:

1) Get ideas from the front lines. Many times in retail, the front line associates optimize and innovate without necessarily releasing the impact of their actions. It can be a process that they change or system enhancement that is needed.

2) Create and allow teams to try new things outside of the normal processes; whether it is IT shops such as Walmart Labs or Staples’ new center on the West Coast, but being physically separate from the home office allows for new thinking.

Joel Rubinson
BrainTrust

To the “sources of inspiration” list, I would add social media listening. This is the most important source for finding the unexpected idea.

Cathy Hotka
BrainTrust

I had dinner with a bunch of IT leaders last evening, and one of them said that his (very large international) retail company had an R&D budget of ZERO. While all of the points David lays out are valid, retail companies should encourage their technologists to try new things, potentially fail, and come up with genuine innovation to enable new revenue sources.

Peter Charness
BrainTrust

All the suggestions are sensible. To add one more, the retailer needs to give time. I’ve worked with hundreds or retailers worldwide and with very few exceptions, the capabilities to innovate (even if it’s only on small things) exists everywhere. The concept of “squeeze it in next to your already very full-time job” which is the usual approach, fails every time. Retailers need to understand that innovation requires a good slice of time and to provide that to its team. And yes, a slice of time and resources given where there is no ROI statement to that project.

Bill Bittner
Guest
Bill Bittner
3 years 8 months ago
No one (I don’t think) will disagree that innovation is good. The problem in a retail environment where people are really the drivers of the organization is that “everyone has a great idea.” Unfettered innovation can soon lead to chaos. The challenge is how to encourage innovation and at the same time avoid chaos. The first goal must be that innovation be recognized. Whether it is simply an acknowledgement from local supervision or a note from higher up, the night crew clerk who submits an idea deserves a response. Often times these ideas will involve vendors, where changes to packaging or infrastructure can make an employee more productive or their job safer. A vehicle must exist for getting these ideas to the appropriate member of the vendor organization and vendor participation should be rewarded when it comes time to purchase new products or equipment. Feedback needs to quick and positive, even thought the concept may have been already considered and rejected and the goal is to encourage additional ideas. The second goal is to screen out the ideas that merit further consideration. This may require the use of test stores or require some time for equipment changes. The goal is… Read more »
David Biernbaum
BrainTrust

The point in this article that I can speak to the best is point #3. Start-up vendors are begging for the opportunity to partner with retailers to test ideas. I recently met with a special team at CVS that is leading the way for this type of process. I am suggesting to other retailers that they do the same. Retailers need to understand that in as much as it can be very maddening to work with small companies, entrepreneurs, and start ups, these are where new innovations and ideas come from. They do not come from the big major companies.

In my own business, I have helped to put over 200 CPG items into retail since 1977, and 25% of them or so were start up innovations where we first brought them to market for our client companies.

Ian Percy
BrainTrust
Perfectly good advice here…with the possible exception of #2 and the idea of ‘buying’ your way to innovation. By far the majority of acquisitions of innovative free-thinking companies by old style command and control bureaucracies result in the rapid demise of the innovative party. The innovative ones know selling out was a mistake in about 12 days. There is nothing wrong with reaching outside your organization for mind-expanding ideas. But when that’s done because you’re getting nothing from within the organization you’re on the way to extinction and you’ll take all ‘partners’ with you. Where is innovative thinking held – in the brain, the mind, the spirit? Do we really understand the physics of innovation? I think not. “Innovation” is just another word for seeing what is possible. ALL that is possible is already available to us, all possibilities exist. The problem in the retail, corporate, religious, educational and government worlds is that we have been conditioned away from innovation lest we get the stupid idea that we can change things and make the world better. You see the same thinking in countries that keep girls out of school. Here’s the thing…we were all born to innovate. Look at any… Read more »
Tony Orlando
BrainTrust

Never be afraid to fail, as this is the only way to move forward. As an eclectic cook, I sometimes “burn until I learn,” and once it is perfect, than we have a new item to sell in the deli. Technology is constantly changing, but the four walls inside the store need to be a place where the execution of a new idea will either succeed or fail.

If we all had a nickel for every idea we read about, and thought, NO WAY, but later on the idea prospered?

Keep trying, and play well with others, as this can only lead to bigger and better things.

Bill Davis
Guest

I agree with everything David suggests, but the bigger challenge is usually a cultural one. Most retailers don’t really support having employees step outside the box to test new ideas quickly and cheaply. Companies are political and more often than not, failure, even on a limited scale, has repercussions. Therefore getting senior management to support this type of “experimentation” is critical.

That being said, as someone who has failed here more often than he has succeeded, I don’t really have a useful suggestion for how to get this support. Changing a culture that has existed for years/decades is a supremely challenging task.

Mel Kleiman
BrainTrust

Just remember, the smartest person in the room is not often the smartest person in the company. Retailers need to learn to harness the power of the front line if they truly want to build a better bottom line.

Some of the best ideas come from the people who have to deal with the problems every day. They would be glad to give you solutions and ideas if you would only ask.

Ralph Jacobson
BrainTrust

This discussion applies to most every industry, including CPG, an industry that relies upon innovation since 75+% of new product introductions fail each year. I think a key additional requirement to stimulate innovation is to create a formal team that continually drives a “pipeline” of new ideas to try and learn from. Without a proactive approach to developing an “idea pipeline,” the retailer, CPG firm or other business will most certainly disappear into an undifferentiated future.

Lee Kent
BrainTrust

This takes me back to the old Bernie and Arthur days at Home Depot. Through innovation, they succeeded. How did they do it?

Any employee could come up with an idea and every employee had access to top-level execs. All the idea holder had to do was get an executive sponsor and they could be off and running. Home Depot was ready to take a shot and pull it quickly if it wasn’t working.

I used to work with the guy who came up with the “Load and Go” concept and he was working in a store when he did it. He is now an executive there.

Bottom line is, it all begins with 2 little things. Employees need to be empowered and supported and the company needs to be ready to try and fail in order to win. And of course, it all starts with knowing what your customer wants and expects from you.

Bill Emerson
Guest
Bill Emerson
3 years 8 months ago

Innovation is utterly dependent on the company culture, which is the responsibility of the CEO and senior management. The CEO not only has to give lip service to innovation, he/she must be a relentless champion for it. If that is not the case, the company should not waste the time and money. Take it from someone who’s been there – it’s a fool’s errand.

Jonathan Marek
Guest

A great list. Another aspect, related to the importance of testing new ideas, is to allow a high rate of small-scale failure. Most ideas that sound great don’t actually work, and in retail it just isn’t possible to sort out the innovations that will work from those that won’t. Of course, that is why experimentation is key.

But testing cannot just be about “proving my idea works.” It also has to be about improving ideas that sort-of work and about cutting bait on those that don’t and moving one quickly. In many organizations, there is still a cultural where small-scale failure isn’t allowed…which surely leads to far fewer large-scale innovation successes.

Anne Bieler
Guest
Anne Bieler
3 years 8 months ago

All good suggestions here, the ideas are around us. Evaluating through a consumer-centric lens is always important, as technology advances offer potential.

The biggest barriers are not identifying the best resources to filter and refine the ideas, not having a solid process to get buy-in, and not having a corporate champion keep the innovations alive as time and other matters erode the sense of urgency.

Ed Dunn
Guest
3 years 8 months ago

For the source of inspiration, I subscribe to the RSS feed of PFSK and other trend watching web sites that show retailing innovation worldwide. In addition retaildesignblog.net is probably one of the best covering retailing design and innovation.

M. Jericho Banks PhD
Guest
M. Jericho Banks PhD
3 years 8 months ago

This tactic worked: Back in the 60s when I was a lifeguard, our Recreation Commission conducted a competition among all employees for ideas for improvements in the swimming pool system. Cash prizes, which got my attention. I won first, second, and third prizes for a total of $50. A lot of money for a highschooler at that time, and all of my suggestions were used.

Shep Hyken
BrainTrust

Innovation and improvement can move companies to higher levels in so many areas. We encourage every employee to share an idea that will improve our company in virtually any area. It can be a money saving idea, a money making idea, a customer service idea, a safety idea, a green idea, etc. Anything counts. We call these “Moments of Innovation.” We expect at least one idea every week. Sounds daunting, but it’s not. First, we teach how simple these ideas can be. Second, we give feedback to everyone submitting the idea. Third, we all realize that not all ideas will be implemented. But, they will all be appreciated.

Mike Osorio
Guest
Mike Osorio
3 years 8 months ago

Excellent ideas and guidance in the article and in the responses thus far. I urge US-based retailers to keep an eye on what is transpiring in retail in Asia and other emerging markets. The tilt of economic growth is moving ever eastward and innovation is happening more and more in emerging markets.

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