INNOVATE

The Incidental Path to Innovation

Sometimes a breakthrough product is the one you create as an enticement or an add-on.
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You're probably familiar with accidental innovations like plastics and penicillin--products that only came about because of the inventor's inadvertent mishap.

The history of vinyl records, recounted in a recent New York Times article about the quest to research two legendary female blues singers, should remind you that there are incidential innovations too--products invented for one purpose, but that end up serving customers in an entirely different way.

The Customer Base You Haven't Considered

The earliest vinyl records were not initially made by record companies, but by companies in other businesses: toys and furniture. They were intended to be accessories, rather than products in their own right. Here's the explanation, from John Jeremiah Sullivan's superb New York Times story:

A furniture company, that's how it started. The Wisconsin Chair Company. They got into making phonograph cabinets. If people had records they liked, they would want phonographs to play them on, and if they had phonographs, they would want cabinets to keep them in. The discs were even sold, especially at first, in furniture shops. They were literally accessories. Toys, you could say. In fact, the first disc "records" were manufactured to go with a long-horned gramophone distributed by a German toy company. So we must imagine, it's as if a subgenre of major American art had been preserved only on vintage View-Master slides.

When I read this, the first contemporary company I thought of was Marlin Steel, a $5-million Baltimore-based builder of steel wire baskets and sheet metal material handling containers. In 2003, CEO Drew Greenblatt radically revamped the company's business model. Previously, the company had specialized in selling wire bagel baskets. It was sinking fast because of competition from Chinese factories, which were selling bagel baskets for $6--half of what Marlin's baskets cost.

But through Greenblatt's leadership, the company transitioned from making wire bagel baskets for customers like Bruegger's and Einstein Bros. to making custom baskets, hooks, and precision sheet-metal products for customers like Boeing, Caterpillar, GE, Merck, and Toyota. The baskets used to hold bagels; now they hold "everything from microchips to turbine blades," according to Charles Fishman's recent story in Fast Company.

The Job You're Really Doing for Your Customers

In other words: a product that Marlin Steel initially intended for one purpose ended up serving quite another one. What stands out about Marlin Steel's story is that the company was nimble enough to adapt.

It did not fall prey to the textbook business-model mistake of the railroad industry, which is a failure to properly define its capabilities in customer-oriented terms. Here's Theodore Levitt in a legendary 1960  Harvard Business Review article, sounding like a brilliant forerunner to today's mainstream notions of customer-centric innovation. Boldface is mine:

The railroads did not stop growing because the need for passenger and freight transportation declined. That grew. The railroads are in trouble today not because that need was filled by others (cars, trucks, airplanes, and even telephones) but because it was not filled by the railroads themselves. They let others take customers away from them because they assumed themselves to be in the railroad business rather than in the transportation business. The reason they defined their industry incorrectly was that they were railroad oriented instead of transportation oriented; they were product oriented instead of customer oriented....

Had Greenblatt stubbornly believed Marlin Steel was in the bagel business--or even in the restaurant business--there's no way he could've successfully transitioned the company. Instead he was willing to consider broader views of the potential market for his company's capabilities. He didn't think strictly in terms of baskets. He thought in terms of the service the company could provide by quickly fuliflling high degree-of-difficulty manufacturing tasks. “The lesson for Greenblatt,” Fishman writes, “was that the wire basket was only part of his product. To Boeing, he was selling engineering, precision, and speed, too.”

The Vinyl Records of Today

Had the toy and furniture companies of yesteryear realized the profit potential of the vinyl record, well--the history of the music business would've been radically different.

Of course, the company that learned from all this was Apple, who famously entered the music business in 2001, even though they weren't a classic "record company." Apple was not going to make the mistake of the railroads, refusing to consider entry into a new market because of some locked-in definition about its corporate identity. 

Here's the question: Are there incidental innovations in your own organization--or in your industry--whose potential you're ignoring or overlooking, because making the leap seems too difficult? 

If so, just think of the railroads. And think of the records.

IMAGE: Shutterstock
Last updated: Apr 22, 2014




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