What Kind Of Culture Leads To Innovation Success?

Guest: Dr Natalie Baumgartner / RoundPegg

Culture is critical for teams and organizations looking to be have significant innovation impact. Based on working across large, small, non-profit and government agencies, I've discovered what are a common set of four culture attributes in organizations that were highly innovative. We validate these and other attributes that make-up culture for an organization with this weeks guest.

innovation culture

Guest: Dr. Natalie Baumgartner

Dr. Natalie Baumgartner is a Co-Founder and the Chief Psychologist at RoundPegg. RoundPegg is The Culture and Engagement Platform for all companies. We strive to make it possible for people to fit and thrive where they work. With Culture Science at it’s core, the RoundPegg culture and engagement platform helps companies increase engagement, reduce churn, retain top talent, and break down silos using web-based social apps. Natalie has been the human form of RoundPegg for over a decade, consulting on corporate culture with investors, senior executives and boards of directors. She holds a Ph.D. in Clinical Psychology and serves on the board of the Consulting Psychology Division of the American Psychological Association. She is a popular speaker on culture, engagement, mergers/acquisitions and change management – and a TEDx speaker on Culture Fit. Natalie is a culture evangelist and is passionate about the power that company culture has to revolutionize how we work.

You can connect at Roundpegg

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Killer Question

Can I create an on-demand version of the product?

Do you need to have a finished product in order to make a sale? Is there any way that not offering a finished product would actually give you an advantage, or even become a selling point? Suppose that your manufacturing costs appear to have gotten as low as they can without sacrificing quality. Even if your costs are acceptable to you, you still have to deal with the lag time between ordering a product and having it manufactured and shipped to you—typically six weeks from China. Perhaps this lag time causes you to lose sales, or to miss the window of opportunity for your product if you’re aiming to respond quickly to a short-lived fad. Is there any other option besides relying on this manufacturing and supply chain?

My children have long since outgrown toys, but if they were still young today, I’d probably be roped into visits to Build-A-Bear. Build-A-Bear, like the paint-your-own pottery craze that preceded it, doesn’t offer a finished product. In fact, the whole selling point is that you create your own customized product in-store. These types of businesses are offering a dual product: both the end result—be it a stuffed animal in a personalized costume or an “I Love Dad” coffee mug—and the chance to create something without taking responsibility for gathering materials or cleaning up the mess it generates. A stuffed toy may feel like a low-risk product, but children’s tastes, interests, and fads can be as fickle as an adult’s. Just ask any parent. Once you start adding the layers of design and complexity to a toy—clothes, accessories, prerecorded sounds—you risk creating something that misses the mark with your target audience. Build-A-Bear’s strategy is very clever in that it allows them to keep components, rather than finished products, as inventory. They never have to run the risk of being stuck with 10,000 astronaut bears the week after the latest Pirates of the Caribbean opens. Or conversely, having 10,000 pirate bears in anticipation of a hit only to find the franchise has run out of gas and the kids don’t care.

There are two points to take from this. The first is that these companies are reducing their risk of having a stockroom full of faddish, briefly popular products that they now can’t sell. The second is that they are able to charge their customers a premium for the pleasure of assembling the final bear. They’ve been able to persuade their customers that down is up. They don’t offer a fully finished product for sale, and if you do want their product, you’ll have to assemble it yourself.
Genius.

Home bakers have experienced a similar shift in how they “make” a product—for example, a cake. When I was a kid, my grandma would make me a cake from scratch every year. The cake cost maybe a dollar in commodity goods. When she passed away, my mom took over the job. She’d buy a cake mix, add an egg, some oil, and some water, and that was it. Of course, the cake was more expensive because of the convenience factor of having pre-made cake mix. When I was eight, my mom got a job as a Realtor and had no time to bake, so she’d order a cake, which was probably twenty-five dollars, for the even greater convenience factor.

These days if you have young kids, a cake—either homemade or store-bought—no longer cuts it. Instead you are paying hundreds of dollars for a party in an ice-cream store. There’s a relationship here between the amount you’re paying and the experience you’re receiving. Selling these products is about more than simple convenience. Manufacturers have to walk a thin line between making a product so easy that it feels like cheating, and so complex that the user sees no value in the supposed “convenience.” When cake mixes first came out, they were really simple; all you had to do was add water. But women didn’t like it, because it felt too easy—like they hadn’t contributed anything to it, and couldn’t claim any pride in making it. So cake mixes were altered to require a fresh egg as well, and the product took off.

The Pillsbury Doughboy ads played on this same idea. Their sales pitch is less about the superior taste or ingredients than it is about allowing Mom the satisfaction of putting hand-baked rolls in front of her family. Same with Sandra Lee’s Semi-Homemade TV show. Both of these brands allow their users to bypass any guilt they might feel at not being able to offer their family the full experience of a homemade meal. The users get the pleasure of the last step: pulling something hot and fresh out of the oven and serving it to their family.

If you want to build this kind of emotional connection with your customer, you need to look at how you can offer them a creative “I did this” kind of experience. You want to give your customer a chance to feel like they’ve done something special for their family or loved ones by making something for them. There’s also a positive customer experience in being able to feel a sense of personal pride in something they’ve done for themselves. Can you give them an opportunity to take ownership over the construction process?
Look at ways in which you can add real value for your customer while simultaneously giving them a less-finished product that improves your bottom line or supply and manufacturing protocol.

Can you give them the chance to say “I did this”?

Sparking Point

  • What benefits would you get if you were able to sell your product such that the customer assembles it?
  • Could assembling it be pitched as a learning, bonding, or more authentic process?
  • Could you increase the perceived value, and hence the cost, of your product by emphasizing its real-time availability?
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