Transcript

Collin Robisheaux: Hey! Welcome to The Persistent Innovators, a special miniseries from Innovation Answered, InnoLead’s podcast for corporate changemakers.

I’m Collin Robisheaux, your guest host for today’s bonus episode.

If you’ve been listening to the series thus far, you may be saying, “OK, Apple, Disney, Lego — those are obvious picks. Everyone considers those companies to be poster children for the cutting edge.” Novartis, which we featured in our most recent episode, has 6,000 people working at its main R&D center in Cambridge. 

What about some less obvious choices — companies that may not have the same level of resources devoted to innovation?

Four today’s bonus episode, we’re looking at persistent innovation from a new perspective. We asked members of the InnoLead community — contributors, past speakers at our events, people we’ve written about — to highlight companies they regard as role models. 

Bill Taylor: One of my favorite persistent innovators is a company that provides lots of food for thought, quite literally, Domino’s Pizza based in Ann Arbor, Michigan, and I love to talk about it and think about it. Because it offers so many creative ideas in such an unexpected setting. It’s a classic example of an organization, which, whose business seems so ordinary, doing genuinely extraordinary things.

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Domino’s Innovation Garage

Collin Robisheaux: That’s Bill Taylor, Fast Company Co-founder, author of the book Simply Brilliant, and a regular contributor to Harvard Business Review.

As we discussed in our episode on Lego, sometimes a company’s greatest strength can be thinking creatively inside of the box, and staying focused on the job customers hire it to do. Domino’s does just that. 

Bill Taylor: To me, one of the secrets is that the company has such a clear strategic sense of the business that it’s in. And I do believe that innovative systems practices habits have to begin fundamentally with a clear point of view, a clear definition of success, what you’re trying to achieve in the big picture, in a sense, that doesn’t change no matter how many of the new practices of innovation you develop. And Domino’s understands quite clearly that it’s not really in the pizza business. It’s in the pizza delivery business. And so even though the food has to be reasonably good, and so on, the game it’s playing, is to figure out in so many different ways, how to get food to people, quickly, friction-free, seamlessly, creatively. And year after year, decade after decade, the company has done just an amazing job of innovation, experimentation, and creativity on all of that. 

Collin Robisheaux: Domino’s focuses on removing that friction — and many of the innovations that the company has developed are designed to maximize customer satisfaction.

In 2018, the company rolled out a “dinner bell” feature on the Domino’s app, a feature that was often advertised in their commercials.

Domino’s Commercial: “When Domino’s is out for delivery, use Domino’s new dinner bell to get the family home.” *jingle sound* 

Collin Robisheaux: The bell notified customers that their pizza was on the way and combined functionality with brand reinforcement. Bill Taylor highlights that as an important combination for Domino’s.

Bill Taylor: The other piece of it, if I may, is that Domino’s understands that even though innovation is about strategy, innovation is about branding, [and] they’re a great marketing company, integration is fundamentally about technology. They think of themselves very much as a technology company, not just a food company. Ultimately, when you’re a big established organization like they are that’s been around for more than 60 years. Innovation in some very profound ways comes down to the individual mindset and overall culture of the organization. Is the organization capable of questioning its past success, looking for new ways to do things? And to me, particularly the last 15 years, that’s really been the secret sauce, pun intended, of what Domino’s has been up to.

Is the organization capable of questioning its past success, and looking for new ways to do things? And to me, particularly in the last 15 years, that’s really been the secret sauce, pun intended, of what Domino’s has been up to.

Collin Robisheaux: Let’s talk sauce for a second. Once upon a time, the public’s opinion of Domino’s food was largely negative. Complaints about processed cheese, tasteless toppings, and cardboard crust were widespread among Domino’s customers. And the company decided to make a change. 

Domino’s Commercial: ”You can either use negative comments to get you down, or you can use them to excite you and energize your process of making a better pizza. We did the latter.”

”Most companies hide the criticism that they’re getting, and we actually faced it head-on. Some people didn’t give us credit for the taste of our product. That’s what we’re fixing.”

”We listen to our consumers and they want us to be better, and we want them to be happier. We want people to love our pizza.”

Collin Robisheaux: Domino’s altered its ingredients and pizza recipe, and launched a marketing campaign to nudge customers to give it another look. And it worked. Since the commercial you just heard was aired in 2009, Domino’s global store count has nearly doubled, to 17,000. Domino’s pies and the tech-forward delivery methods that the company uses are again beloved by millions. 

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Domino’s Pizza products in 2022

Collin Robisheaux: Do you have a go-to Domino’s order?

Bill Taylor: Well, so this is an example of trusting the art not the artist, I fear I’ve aged out of the Domino’s demo and so maybe sometimes with for research purposes, I might place an order but by and large I’m a kale salad guy at this point.

*Music transition*

Collin Robisheaux: For our next example of persistent innovation, we’re sticking with the food and beverage industry. But first, a quick word from my friends here at InnoLead.

Scott Kirsner: I’m Scott Kirsner, CEO and Co-Founder at InnoLead, and we are getting ready to host our first big in-person event since the before times. It’s happening in Brooklyn New York on May 18th and 19th, 2022 and it’s designed especially for corporate innovators looking to upgrade their skills and deliver bigger results. It’s called Impact, and if you join us, you’ll meet peers from companies like Delta Airlines, Williams-Sonoma, Tiffany & Company, Hain Celestial, Carhartt, Pfizer - and a whole lot more. Every session is designed to help you dive into what works — and what doesn’t — when it comes to making change happen in large organizations. We’d love to see you there. You don’t have to be an InnoLead member to come, but we’re offering a great discount on membership and a ticket that’s worth checking out. You can find out more at innovationleader.com slash impact. Back to the show!

*Music transition*

Rachel Antalek: So I’m just going to go right ahead and suggest that Starbucks I think is a great example of persistent innovation was a big reason why I joined the company. 

Collin Robisheaux: That’s Rachel Antalek, an innovation consultant based in Seattle who spent twelve years at Starbucks in a range of innovation roles, including vice president of concept innovation. She helped test things like serving wine and small plates in the evenings, and also created the Starbucks Reserve format — high-end locations that roast their own beans on-site.  

Rachel Antalek: If you look historically at times when other companies would have retrenched and pulled back on innovation, Starbucks doubles down on innovation. And I think the other you know, the other reason why I would select them as a persistent innovator is that, you know, it’s not just the pace of what comes out of Starbucks, it’s the cross, cross-functional, really breadth of what comes out. I mean, at any given point in time, you definitely are obviously seeing product innovation but you’re seeing digital innovation, you’re seeing marketing innovation, you’re seeing store development innovation, supply chain innovation, it’s really across the entire organization that they’re able to constantly look for ways to grow and be better.

…At any given point in time, you definitely are seeing product innovation– but you’re seeing digital innovation, you’re seeing marketing innovation, you’re seeing store development innovation, supply chain innovation — it’s really across the entire organization that they’re able to constantly look for ways to grow and be better.

Collin Robisheaux: Innovating across disciplines and departments — and creating a true culture of innovation — is something many companies struggle with. But Antalek says that some of the credit for that goes to founder Howard Schulz, who helped grow the company from just one small storefront across from Seattle’s Pike Place market to locations in 80 countries. After handing the reins to other chief executives, Schulz returned as CEO for another nine-year stint, between 2008 and 2016. 

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Rachel Antalek: I was fortunate to join Starbucks at a time when Howard Schultz had decided to return to the company as CEO and I think, one not so not really so much of a secret, but I think everybody really understood as an employee or partner of Starbucks that Howard Schultz was not just the CEO, he was also the chief innovation officer. And he had a drive for innovation, like none I have ever seen…

Collin Robisheaux: The responsibility for innovation is often handed to one team — whether they’re called innovation, new product development, or R&D – and that can work. But according to Antalek, the responsibility was much more distributed at Starbucks. 

Rachel Antalek: Secondarily, I would say there is no one innovation team at Starbucks, and that, you know, can cause challenges and competition, and frustration. But I think it’s really a true testament to the innovation culture at Starbucks, that, you know, you have innovation happening in all the obvious places like the product and digital, and, you know, some marketing, but you have innovation taking place in the supply chain, and operations. You know, in 2009, we launched the first operations innovation team that was really all about innovation for operations and execution’s sake. And that was unheard of, at the time in the industry. 

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The Starbucks mobile order feature on the company’s mobile app

Third, there’s also a really good understanding of the difference between design and commercialization of innovation. And, you know, by that, I mean really understanding the front-end design process, focusing on consumer problems to solve and pain points, and understanding what rapid iteration looks like. 

Collin Robisheaux: Starbucks didn’t just conjure up great ideas internally — it also asked customers, with a crowdsourcing site called My Starbucks Idea. But collecting ideas is just one step — you also need to have the mechanisms to refine and test those ideas and turn them into tangible offerings that people can see. 

Rachel Antalek: They understand how to get it out of the lab and into the market. So a good process for that handoff between design, and a great testing organization that can really test anything within the Starbucks organization very, very quickly. And then an ability to just get it out to the market as fast as possible and oftentimes around the globe which is not so easy to do. So those were those are you know, to recap the four things, in my opinion, is just you know, from the top leadership promotion, you know, the active promotion of innovation, innovation being proliferated across all functions of the organization, a really solid understanding of design and iterative design grounded obviously in the consumer and then you know, the ability to commercialize and get it out the door and get it into the market rapidly.

There’s also a really good understanding of the difference between design and commercialization of innovation. And by that, I mean really understanding the front-end design process, focusing on consumer problems to solve and pain points, and understanding what rapid iteration looks like.

Collin Robisheaux: When it comes to Starbucks drinks, I’m a big white chocolate mocha fan. Can’t go wrong with that on a cold day. 

Rachel Antalek: I have to admit, I am a straight-up black coffee drinker and I love the reserve line of coffees that are, you know, really small batch from around the world. I tend to like the ones from Indonesia, the Java or Sumatra-based coffees, I drink a lot of those.

*Music transition*

Collin Robisheaux: The biggest market for both Starbucks and Domino’s is the United States. But let’s travel from Seattle across the Pacific to hear about two Japanese companies that have become household names.

Rita McGrath: I’m a professor at Columbia Business School and have been involved in innovation – oh boy, since my dissertation days when I wrote a dissertation on how established organizations create new capabilities. 

Collin Robisheaux: That’s Rita McGrath. In addition to teaching at Columbia, she also runs a software and learning company called Valize, and is the author of the book “Seeing Around Corners.” Her pick for a persistent innovator is based in the world’s biggest city — in a business culture better known for hierarchy and toeing the company line than disruptive innovation: Tokyo.

Rita McGrath: One of my favorite examples, because it’s so counterintuitive, is Fujifilm of Japan. And we have this stereotype of Japanese firms as being second movers and very bureaucratic and very good at quality, for example, but not very innovative. And yet Fuji going all the way back to the early days of digital film has just rolled out one innovation after another. Seeing the advent of digital coming, they really said ’where can we make our capabilities useful,’ and explored a whole vector of new growth opportunities in things like medical imaging, and other kinds of health care applications and today they’re a thriving company when Kodak, who theoretically could have done the same thing, is on its knees.

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The Fujifilm X-T10. Photo by builtbymath on Unsplash.

Collin Robisheaux: Speaking of Kodak, let’s take a trip back to the 1980s when the camera company was Fujifilm’s fiercest global rival. In the end, Fujifilm’s ability to diversify beyond its core business  - leveraging its knowledge of chemistry to enter businesses like cosmetics and pharmaceuticals — helped ensure it would survive long enough to be considered a ‘persistent innovator.’ From 2000 to 2010, its sales were growing while Kodak’s dropped by half. 

Rita McGrath: They also really encourage two kinds of innovation. The first is what you might think of as the kind of early idea stage where you got a fair amount of wandering around in the wilderness. And you know, a lot of those ideas are never going to work out. It’ll never be commercial, but they give a lot of latitude to their researchers and scientists. The second kind of innovation is scaling up, which is once you’ve hit on something that really works, really putting the full force of the company behind it to make it successful.

The second kind of innovation is scaling up… Once you’ve hit on something that really works, really putting the full force of the company behind it to make it successful.

*Sound of car changing gears*

Collin Robisheaux: Let’s shift gears here. The automotive industry is booming in 2022. Tesla is rolling out what it touts as full self-driving capabilities. Ford is electrifying its F150 pickup truck, and new entrants like Rivian are starting to deliver product to customers. The word “innovation” is being tossed around by almost every carmaker.

But if we’re trying to hone in on persistent innovation in the automotive industry, certain companies pull ahead of the pack. We got one example from Braden Kelley, an innovation blogger, keynote speaker, and author of the books Charting Change and Stoking Your Innovation Bonfire

Braden Kelley: I think one example that people don’t talk about very often that’s very interesting is Honda. And I think that one of the key reasons for that is because they have like you said, evolved over decades and continuously innovated over decades. And they’ve done a number of different things that, you know, we as innovation practitioners suggest, including, you know, focusing on things like consistent behaviors and artifacts and symbols and some of these other things that oftentimes go unused and unleveraged.

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An airplane built by Honda sits outside of Honda’s United States Headquarters. 

Collin Robisheaux: Braden, Honda was founded in Tokyo way back in 1948, initially making add-on engines for bicycles. Today, they make not only cars but a $5 million twin-engine jet airplane. What do you see as its secrets to persistent innovation?

Braden Kelley: I think what I would say number one is to pick a powerful Northstar. And so for Honda, it’s the power of dreams. And I think when it comes to innovation, dreaming is a very key aspect. And so I think that picking that Northstar, the power of dreams is very, very powerful. Also, you know, some of the other things that they do is to try to remove some of the hierarchy from the organization through the use of symbols. And in this case, you know, if you go to one of their manufacturing plants, everybody’s wearing white coveralls and no matter whether you’re the president of the factory or a line worker, and they also do other things to try to flatten the hierarchy, because to have true innovation, it does, it does get messy, and it does require people to disagree it does require people to push each other to challenge orthodoxies. And so, anything you can do to remove some of that command and control and to allow good ideas to bubble up from anywhere in the organization and get better by being challenged and growing and people feeling safe to accept that that challenge as you know as help and not you know, ridicule or as rejection you know, which is very hard I think it is very important.

…Number one is to pick a powerful Northstar. And so for Honda, it’s the power of dreams. I think when it comes to innovation, dreaming is a very key aspect. 

Collin Robisheaux: So Honda is bridging the gap from leadership to worker, and promoting those new ideas. What do some of those tangible ideas look like? I know Honda already has a lot there that goes beyond just automobiles and cars and vehicles…

Braden Kelley: They really do. And I think that’s, that’s one, one place where they’re kind of shortchanged, in terms of how people think about them. They’re also one of the leading manufacturers of, you know, equipment for around your house, like snow blowers, lawn tractors, and all kinds of things like that. Also, ATVs. And, you know, they even make airplanes. I don’t think a lot of people realize that. And so as you and robots. And so as you think about Honda, how they view themselves as a motor company, and as you think even you know, that’s the golden thread that pulls through all those things, including robots, because robots are driven by motors. They’re just slightly different kinds of motors. And so, you know, I think that’s what allows them to be successful in all those areas. They don’t just play in all those areas, they’re successful in all those areas. 

*Music transition* 

Collin Robisheaux: We’ve heard about persistent innovators in Seattle, Ann Arbor, and Tokyo. But we’ve got two more stops to make - in Delaware, President Joe Biden’s home state, and Madrid, Spain. Our final voice in this episode is that of Dan Toma. Dan is a co-founder of Outcome, an innovation consulting firm, and a co-author of the books Innovation Accounting and The Corporate Startup.

Dan Toma: Right, I want to discuss this in the context of digital native and non-digital native organizations, digital native organizations are typically persistently innovative. Right, you have the likes of Tesla, the area of likes of Amazon, Microsoft is a good example. Right? But let’s not discuss those because those were probably you know, born in a different age if you want. If we’re looking at traditional organizations, I have actually two favorites there. One of them is DuPont, the chemical company, they’ve been consistently coming up with great new products, great new offerings. I don’t want to say over the past couple of decades, I would like to say actually longer than that. And the other one, which is very close to my heart. They really like what they’re doing and how they’re changing the organization is Telefonica, the telecom provider in Spain that has a lot of business outside of Spain, as well in the UK and Latin America. In other parts, I think these are two great companies that I’m always, let’s say, inspired by. 

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DuPont laboratory employees work on a solar panel

Collin Robisheaux: DuPont is based in Wilmington, Delaware, and is one of the world’s biggest producers of chemicals, fibers, construction materials, and more. Telefonica, the Spanish telecom and digital services provider, is based in Madrid. What the two companies sell couldn’t be more different, but they share a common characteristic.

Dan Toma: Obviously, in both cases, we can talk about really, really understanding the market that they’re in. Obviously, they have peculiarities, because one is a telco provider. The other one is a chemical company. We can draw some parallels there. But I would say that, obviously, probably 90 percent of their practice is totally different. But what unites them and I think where they share a commonality and actually, this is a thing for which I actually respect them. And I think what is part of their key success, to some extent, is very good portfolio management. They are able to manage the innovation portfolio in a very good way. They are very professional about managing their portfolio and they understand very well that the innovation funnel of today represents the portfolio of tomorrow. So they’re always trying to put in a lot of ideas through the funnel, manage it erfectly, I would say to some extent. And then obviously, this leads to future growth and future success for them. And I think this is a commonality between these two companies. And in general, to be honest, it’s a commonality between these companies and any other organization that’s really good at innovation – so we can talk here about Amazon. Microsoft is a great example of an organization that’s brilliant at managing portfolios.

They are able to manage innovation portfolios in a very good way. They are very professional about managing their portfolio, and they understand very well that the innovation funnel of today represents the portfolio of tomorrow. So they’re always trying to put in a lot of ideas through the funnel.

*music transition*

Collin Robisheaux: I’d love to hear from you about other companies that you would consider persistent innovators — and why. Just share a message on Twitter or LinkedIn, and be sure to tag InnoLead so we see it. We also appreciate any ratings or reviews of the podcast on whatever platform you use to listen.

If you’ve enjoyed this podcast mini-season, consider signing up for our free email newsletter or becoming a member of InnoLead - info about both can be found at innolead.com. 

I’d like to give a special thank you to Wade Roush, our guest host for this miniseries, Reagan Boyle, Scott Kirsner, and all of our wonderful guests – Bill Taylor, Rachel Antalek, Rita McGrath, Braden Kelley, and Dan Toma. 

Thank you for listening and for joining us on this journey of persistent innovation. I’m Collin Robisheaux – we’ll see you next time.