The Debate: A multi-part discussion on disruptive innovation, marketing and branding

Alex Weber
Senior creative director, Kaleidoscope

How do you define disruptive innovation?

Disruptive innovation challenges norms, changes conversations, redefines experiences, creates new experiences and/or simply breaks down barriers. Disruptive innovation can be anything from an idea that changes the way a company/brand thinks, behaves or influences a person, to a ground-breaking technological advancement.

We have all seen disruptive innovation from startups such as Uber and Netflix, but why should larger corporations care about disruptive innovation?

Our world is changing. Geographical and cultural boundaries are becoming more blurred in this digital era, and companies need to think beyond traditional methods and practices in order to stay ahead of the curve and relevant. Consumer needs are shifting to accommodate new habits, budgets and fast-paced lifestyles, and new generations have greater expectations as technology changes their mindsets and lifestyles.

What products, services or products are ripe for disruptive innovation?

and beverage are ripe for disruptive innovation. From sustainable packaging opportunities to innovative, more health-conscious and transparent formulas to brand refreshes, there are so many brands and products that could benefit from new ways of thinking. Whether brands are in need of a stronger brand strategy, portfolio simplification and optimization or even new formulas, changes in consumer behavior and technology are challenging every CPG category.

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How can disruptive innovation be used as a marketing and branding tool?

Disruptive innovation can be as simple as better on-pack communication or as complex as a game-changing packaging structure. At Kaleidoscope, we collaborate with marketing teams to first understand the tools and technology they have available, and then use them to their fullest potential to create more distinctive brand experiences, and more ownable, disruptive packaging.

How can marketing and design leaders start honest and fruitful conversation about the risks and rewards of disruptive design and marketing within an organization?

Disruptive and design are polarizing concepts that are often met with resistance in organizations. If you have a big idea,

• Start by bringing critical functions together in one room.

• Listen and understand. Dive deep into the tools, processes, equipment, resources and talent that you have to work with.

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• Workshop, prototype, test and learn. Leave the risks and rewards conversation to the end and put your ideas through a rigorous gut check.

How can design thinking be used to create disruptive innovation?

We recommend gaining an understanding of the business challenges and consumers, and then prototyping to prove out your ideas along the way. Design thinking is not for every organization. We recommend starting with the right talent/key stakeholders and developing a methodology that is tailored to the business and brand challenge that brands are facing.

Have you or your teams delivered disruptive innovation in your marketspace?

We’re very proud of the work we did with Fairlife milk to create a very disruptive new brand in a category that was starved for change. The declining dairy category had become increasingly commoditized. Refrigerated cases lined with rows of nearly identical jugs and gable-topped cartons were seas of sameness. The packaging solution that we introduced for Fairlife stood out structurally and visually in a way that not only set it apart from the pack, but also lived up to the promise of the innovative product within. The brand posted 80% volume growth the first year, significantly outpacing the $6 billion value-added dairy category, which grew 5% in 2016.

For WOW Vapor, Kaleidoscope created disruptive innovation by focusing on the consumer experience and unmet needs identified through ethnographic research and definition of the user journey. At the time, competitive brands had not addressed the need to keep the products clean while in your pocket or purse as well as the organization of many product components and liquid juices. We developed and patented the V Case to provide storage and organization with an elevated user experience and magnetic closure. The iconic design and mirror finish of the V Case became an icon for the brand, providing WOW with a significant point of difference from competitors. The brand earned immediate placement in Hess and Walgreens stores nationwide.

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Can you share one example of successful disruptive innovation outside of your work?

The Coke “Plant Bottle” was a great example of a brand that created innovation to address increasing demand for a more environmentally-friendly packaging structure. However, rather than abandoning its iconic bottle silhouette, Coke created an innovative new substrate that combines fully recyclable PET and plant-based compounds. It is disruptive, relevant and still lives up to Coke’s long-established brand equities.

Is there any reason why companies should proactively avoid disruptive innovation?

I would never advise any of my clients to avoid disruptive innovation. Complacency, lack of vision and failure to explore new concepts are often the undoing of great brands. That said, change for the sake of change can be equally detrimental. As with any other brand expression, innovation should be guided by the core values and defining principles of a brand.

Is there anything else you would like to share on the topic of disruptive innovation?

Brand innovation is no longer about building equity through recognition and consistency. Rather, successful brands are now growing by delivering new and relevant experiences to their consumers.

 

Roger Zellner
Former global director of research and development for packaging productivity and simplification at Mondel¯ez International

How do you define disruptive innovation?

Disruptive innovation brings a unique solution to people with something they did not have before and that they seriously want now. If it’s disruptive, it didn’t exist previously.

Disruptive innovation can be physical. It can touch any of the five senses. But it could also be emotional. It could be something that helps people make the right choice. For example, I don’t go to a movie now or to a restaurant unless I look at some of these different review sites that tell me what the critics and the users think. I just don’t want to waste my time. When people invest their time and money, they want to be sure about their choices and what they’re getting for their value.

Another area that seems right to me for disruptive innovation, includes health. Yes, this is a big society idea, but think about how you pick your doctor, how you pick your treatments, how you decide what you eat and the impact that has on your health.

In the medical world, there’s also so much confusion about how to live a healthy life. From heart health and more, people are puzzled. There’s room for innovation on how to guide people to live healthier lives and how to use technology as guideposts and a map.

Think about education, a lot of time and money is invested in education. Education has a significant impact on people’s lives! How students choose their majors, their professors and their universities are ripe for disruptive innovation.

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Even government, think of how much you spend in taxes. What would be the impact if people had more useful information about how their tax dollars were being used and an easier way to immediately use that information when voting?

And these big ideas are achievable. Look at what Uber did to how we think about transportation and how Tesla is considered by the business world and general public relative to established carmakers.

Why should larger corporations care about disruptive innovation?

Well, it’s a matter of survival. To believe that your business is going to satisfy all needs as the external environment is changing all around us is foolish.

On the other hand, the external world around larger corporations continues to evolve how people buy things, how they’re eating and how they’re making purchasing decisions. If you go back to the 1950s and the “Leave it to Beaver” era, buying something for your family was a much different process.

Now there are more people involved, and they are on different schedules. No longer is there one person buying for the whole household. Each household member could be buying things on their own because there’s much more choice in where and when items can be purchased and a lot less time required to make those purchases.

Food companies certainly have had to adapt, as companies in other categories have. Think about personal care, you never heard about the “for men” category years ago and now it’s one of the fastest growing fields out there in terms of consumer products and innovation.

Axe was disruptive. Its marketing creates different reactions from different people. Unilever also knows Axe’s target market. As people look for and appreciate more personal experiences, brands like Axe have real appeal.

Disruptive marketing can keep the brand fresh. Brands need to keep anticipating what their customers want, which becomes a bigger and bigger challenge to address.

The opportunity to disrupt isn’t just in products and services for the younger generation. If you think about the older generations, you realize they have a lot of wealth that they’ve acquired over time and the desire to use that. Smart marketers are creating brand experiences personalized for them, including vacation experiences like Road Scholar where they have learning trips.

Yet, the challenge with the larger corporations is the very reason that they’re large: They have steady profit streams that they need to grow and protect. These profit streams are covering a lot of people’s salaries, a lot of shareholder value. You can’t ignore that and not take care of your core competencies.

Over my career, I’ve seen different situations where the focus on disruptive innovation led to a lack of focus on the core, and consequently the core became unhealthy. Senior leadership who lead this had to come back and say, ‘You know what, it’s the core. We have to take care of the core. Our core is eroding and it’s creating poor business results.’

If everyone is looking at how we can launch something new, innovative and disruptive, it can be harmful. Businesses make money by execution. Execution is critical and large parts of organizations are setup to execute with excellence. That’s where the money comes from that pays people’s salaries that delivers the dividends, the shareholders, etc.

It’s not like large corporations should avoid disruption. You should always understand the risk. But, again, there’s a risk in not innovating. Remember how phones have replaced cameras for a lot of shoppers. Hence, the reason to balance it like most things in life,

Larger corporations also have an advantage that shouldn’t be forgotten. You know the old saying, “How to make a small fortune? Start with a big one.”

Can you share some tips on how you start an honest conversation about disruptive innovation?

Get everyone’s attention by spotlighting the risk to your current steady profit stream. Nothing gets people’s attention like this. Then look at your products and brands. Ask yourself and your teams, “How can our product become obsolete? If you wanted to compete against us, how would you do it better or faster?” Then get everyone’ if you were the competition, how could you make it happen faster? This thing from the competition would likely be something disruptive.

Know your numbers: Losing 1 or 2% market share is obviously not good, but losing 10 or 20% or having your profits margin drop dramatically. If this is possible even if it’s not possible this year or the very near future, spotlight the risk and personalize how the risk could affect them and their departments.

Then be prepared to counter arguments that past attempts at being disruptive were not successful yet avoid disruptive ideas that do not provide meaningful value to the customer

Remember that design should be iterative. Listen to your social media, especially the critics. Anyone who has the time and energy to invest to go onto a website and express their displeasure for something is someone to listen to. Now, not every voice in social might be authoritative or offer good advice but there are gems there.

Engaging your social network also helps create market loyalists, who are thrilled to share their positive experiences with your brand.

How can design thinking be used to create disruptive innovation?

So design thinking has a lot of different definitions or perhaps ambiguity around it but to me it’s about making something better on several dimensions. This is different than just delivering a solution. Sometimes solutions solve a problem but no one really gets excited. It’s about making the experience so much better that people see it as something that they need and want.

They become a little more emotionally invested, and I would say it requires designers who are adept at the process, working with broader teams to help bring different perspectives and challenges and even their desires into something meaningful.

does not mean I advocate design by committee. But take advantage of the fact that designers are trained to work with different people with different perspectives. This can evolve a product or service to be more than a solution into something desired and wanted.

Have you or your teams ever created a disruptively innovative product or service?

Certainly, yes, I’ve been involved with disruptive innovation that had significant revenue growth and actually impacted categories in the industry. This disruptive would originate from the final consumers’ feedback or sometimes because we brought different departments together.

Often these innovations were driven by changes in the external environment that created challenges for our customers that we wanted to help solve. For example, the need for sustainable package designs became ever more apparent and CPGs and their partners had to innovate to deliver food in a convenient, safe and marketable format that still minimized their impacts on the world’s ecology.