Puma Exec on Keeping Score of Innovation

By Julie Donnelly |  May 27, 2014

When the World Cup begins next month, or the Summer Olympics roll around again in 2016, the products that Louis Joseph and his team at Puma have been working on will take the field. High-profile sporting events like those give Puma major media attention — so much so that Joseph, Puma’s Global Director of Innovation and Strategy, organizes his innovation pipeline based on what will be ready to launch at each major event. Anything after the 2018 World Cup in Russia? That, he says, is a longer-term “dream project.”

Puma is a publicly-held $4 billion sports and apparel brand, headquartered in Germany and founded in 1924. Among the athletes who wear Puma gear: Usain Bolt, the world’s fastest man. Joseph joined the company in a marketing role in 2004, and has also worked for New Balance and K-Swiss.

We talked to Joseph about why he doesn’t believe in running an innovation skunkworks; the company’s new line of ACTV performance apparel; and how he measures success.

Spread Out

“Our team is decentralized, and we find great advantage in that from the perspective of gathering from different influences from certain locales around the world,” he says. Joseph’s team includes a designer in Tokyo, engineers in Germany, and strategists in Boston.

The Monthly Call

In addition to more formal meetings, once a month the whole team gets on the phone and spitballs ideas. In general, the ideas have to connect to one of the company’s top innovation priorities. (Joseph declined to share these, except to say that one relates to sustainability.) The priorities are evaluated every year, and one or two might change, he says.

“A lot of mock ups are brought to the informal idea calls, cobbled together in the small workshop where the engineers sit. Some do story boards or use case adoption models. The mediums that we use are varied, and pertain to who is pitching the idea.”

Setting Priorities

“Trying to determine what not to do is a real difficulty. We start really wide. We look at areas of interest – categorical, footwear or apparel, or consumer segment. We go through a number of steps to cull the list down. Some ideas are similar to one another, and some are incredibly resource-intensive, so I am going to have to talk to the board.”

Joseph said all things being equal, a platform idea that can be deployed to multiple different business units will take priority over a one-off product that may only work for, say, the soccer business or the running business.

Case in point: A new performance apparel line called ACTV (above right), which Joseph said is the first garment in the marketplace to marry the supportive properties of athletic taping with compression materials to help stimulate muscle activity and recovery.

All of Puma’s national teams represented at the World Cup will be wearing ACTV products. Later, the technology will be used in a variety of categories, including running and fitness.

Getting Overruled

Joseph says if the majority of his team is in favor of an idea and he isn’t sold, “I’ll go with the team’s idea every time.” He said the team is devoid of hierarchies and all ideas are equally respected. Debate is encouraged, but no one is allowed to say, “I don’t really like that idea.” Instead, they employ more positive language.

“We generally have consensus about which projects we activate, but it’s never 100 percent, and I think that’s something we appreciate because we are dealing with the unknown. If someone on the team is not a little uncomfortable, then it’s probably a little too safe.”

The Three Work Streams

Joseph said his team’s more than fifty projects are organized into three work streams that correspond to short, medium, and long-term time horizons. Balancing long-term investments and those with a quicker exit is always the biggest challenge, Joseph said.

  • 2016: Olympics in Brazil (some projects began as early as 2011)
  • 2018: World Cup in Russia
  • 2020 and beyond: This includes long-term “dream projects”

Challenge your Assumptions

Joseph said he often does this exercise with his team: When he is traveling, he takes photos of young people. Then when he gets back, he asks his team to look at the photo and try to guess where each kid was photographed.

“He’s never from where you think,” Joseph says. “‘Well, here’s a person with an Asian complexion, so people might guess someplace like Shanghai.’ But no, I saw this young person skateboarding in Berlin.”

Puma has to look beyond traditional demographics to successfully innovate, Joseph said. The company instead seeks common denominators that cut across race, geography, gender and age. “Puma is known as a brand that has surprised and delighted in many ways,” he says. “This gives us a sense of purpose.”

“Don’t be a Secretive Skunk Works”

Joseph’s team lays out strict timelines for milestones for each project and estimates when the product might reach the market. The team transmits this information to the rest of the company via an internal dashboard.

“We rarely meet the milestones on time, but because we are broadcasting some of these messages, we give them a sense of when these innovations may be able to come to market. It’s never exact, but we do build strict, specific timelines for each project.”

Joseph said the team gets a lot of input from the CEO, the board and business unit leaders about what is needed and when. Joseph said far from being a “secretive skunk works,” if he could change one thing, it would be to have more face time with the CEO’s cabinet to get their feedback. Joseph says that with the open culture of the company, “It’s impossible for us to hide in a corner and cover up our homework.” And that’s a good thing, he says.

How Puma Measures Success

  1. ROI: “It needs to exceed our weighted cost of capital. We frame every initiative as if it was a small startup. We say to the CFO, please give us funding, and then we try to illustrate what is a significant return.”
  2. Game-changing concepts: “We also look at image-building, groundbreaking, first generation concepts. Can we challenge the marketplace, can we change the way people perceive sport or their equipment and deliver new benefits and new insights? That is not tied to revenue. We want to put Puma into the conversation and challenge the way people think about sport and life.”
  3. Driving value throughout the organization: “Some concepts originate in our team, but might not be appropriate for our group. In that case, they might be distributed to other teams that can execute faster. We’re always trying to add, document, and capture as many ideas as we can because that is a real competitive advantage. We’ll never have as many resources as Nike, for instance. But we like to look at aptitude, our imagination, and the position of our brand to create value.”

Take Cues from Other Industries

One example of an industry Puma is keeping a close watch on is wearable devices. “There’s a great convergence between health care, wellness, and specialized sport behavior. Consumers are becoming more metrics-driven.”

Joseph said right now, Puma is just observing. But he can foresee a time when the brand may be selling apparel that includes or connects to wearable devices. “Just because you can measure something, doesn’t mean it will be sticky enough, repetitive enough, or interesting enough to the consumer in a sustainable way, but it’s a very exciting market,” he says.