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Monday, December 3, 2012



Oxymoron (noun) ox-y-mo-ron
– expression with contradictory words


“More Innovation, Less Risk” sounds like an oxymoron. (But it is not, if managed appropriately.) We’ve been taught to think “More Innovation, More Risk.” However, in today’s rapidly changing, highly dynamic marketplace, where competition can come from anywhere, and the power of the customer is growing, a more apropos assertion is “Less Innovation, More Risk.”

The Nature of Risk

Risk envelopes us. If we were to think about it we would recognize it is present in nearly every facet of our lives. We face risk around the clock, each and every day. We risk an accident when we buckle-up our seatbelts and brave crowded highways and byways to drive to work in inclement and, for that matter, even perfect weather conditions. We risk when we receive a medical diagnosis that it may not be the correct one and will not be properly treated by those we entrust to care for us. We risk when we purchase a stock that it might be a poor investment and depreciate in value, buy a home that we will may not be able to repay the loan and default on the mortgage and have the home taken from under us, send our children off to school that they may not be safe enroute or in the classroom, eat in a restaurant that we not get food poisoning, awaken in the middle of the night and navigate our way to the bathroom in the dark without stumbling into something hard (or fragile), step into the shower without slipping and injuring ourselves, ad nauseum. But while we may acknowledge that these are risks, however unlikely, we don’t obsess over these things as such. They are in the far recess of our collective minds. If we did think about each and every potential risk that we face it could lead to paralysis or, worse yet, we might go stark raving mad.


But “risk” is made overt in the business world. The word “risk” is defined as endangering somebody or something; invite a bad consequence. The consequences of taking risks in the business world are numerous and rather grave. And we are reminded of them. Our choices may be perceived as endangering our career, or someone else’s career (such as our bosses or teammates). A risky action could lead to loss of reputation, promotion or even our jobs. It could result in failure to achieve profit goals. If it is substantive it could trigger a drop in the stock price or bankrupt the company. Or, a less visible but real consequence of a risky choice could be opportunity losses brought about by an inability to provide capital for promising opportunities. Yes, risk in the corporate world is linked with rather dire consequences. We “risk our necks” or “getting your neck chopped off” as if we were turkeys. Perhaps, that is why there are many managers in business who have become turtles, keeping their necks tucked into their shells and out of harms way. Neither turkeys nor turtles have a place in our competitive environment. Unfortunately, innovation is linked with risk, often irrationally so.

The Nature of Innovation

But we desperately need innovation. Innovation fuels competitiveness. Innovation fuels growth. Innovation fuels business health. It’s hard to get ahead without innovation. We need to distinguish innovation from invention. Invention is a new discovery. It probably originates with engineering or R&D. It is a nascent idea that may require huge investments in time, talent and funding. For example, the invention of manned flight took many years, and attempts. Innovation takes invention and commercializes it. (In fact, it took more than 30-years to commercialize air transportation following the Wright Brothers invention.) Steve Wozniak created the Apple computer. Steve Jobs commercialized it. Innovation is the essential link to “cross the chasm” (a term established by Geoffrey Moore in his book “Crossing the Chasm,” which is must reading for marketers) and gain a wider customer base. Innovation is essential to commercial success. Innovation is a major part of our job as marketers if we are going to drive customer preference and make our marketing matter more.


Innovation is offering or doing something different (Pixar Animation). It could be a product (iPhone). It could be a business model (Starbucks, It could be a brand idea (Axe). It could be a new way of reaching potential customers and winning them over to our brands (introduction of Direct-To-Consumer advertising by pharmaceutical companies, or the Obama campaign’s use of social media). It could take many forms. We cannot point the blame for poor business performance at R&D for not developing new products (although this is undoubtedly important!). We must to innovate (even when we have new products if we are to leverage their full potential) to keep ahead of the competition and achieve our business goals. (MasterCard is a wonderful example of innovation with advertising by developing a BIG Campaign Idea –the “Priceless” campaign. Its product was not changed, nor is it different than competition. Yet the development of the Priceless campaign in 1997 has fueled significant growth over the past 15-years, and continues to do so.)

Less Innovation, More Risk

By now most of us may be familiar with Einstein’s definition of insanity: “It’s doing the same things, in the same ways, and expecting different results.” This is the antithesis of innovation. Why then would we choose insanity? It’s because of this irrational link between innovation and risk. The underlying unstated assumption, but visible practice is “Less Innovation, Less Risk.” Our senior managers call boldly for innovation but we (and these same senior managers) fear and loathe it. It is the right message to sound but the wrong action to take - if we want to keep our jobs, and necks. The actual suggestion of doing something that is innovative is often undermined by: assertions that it isn’t the way we or the industry do business (and the inference that those suggesting the specific innovation, therefore, do not understand the business); observation that no one else in the category is doing it (therefore it can’t be right or it is unproven, which poses significant risk and makes us all appear foolish); and/or stalling tactics consisting of endless rounds of revised PowerPoint presentations without gaining approval for action, while the proverbial deck chairs of the Titanic are rearranged (i.e., personnel assignments are changed and the recommended innovation is forgotten).


In reality, however, it is “Less Innovation, More Risk.” Refer back to the late Albert Einstein. We are not going to get the results we seek, the results senior managers and stockholders demand. And, by the way, we cannot cut (as in people, budgets, etc.) our way to leadership. Moreover, we are vulnerable to those competitors who do innovate. They change how customers perceive the marketplace in ways that favor their brand (Marketect thinking!). RIM (makers of Blackberry), Nokia and Motorola, former leaders in mobile phones are shining examples of the consequences of “Less Innovation (or, perhaps, not relevant innovation), More Risk.”


Here’s an analogy to further illustrate our assertion. As former military pilots we know that the safest way to fly is “straight and level.” That’s the way all of us want commercial pilots ferrying us around the world to fly, straight and level. But, in a military situation if any enemy plane is on our tails and has us in his sights then flying safe and level is not the safest way to fly. In this instance flying straight and level puts us at great risk of being shot out of the sky. We all have competitors on our tails who have us in their sights and are eager to shoot our brands out of the marketplace. Flying straight and level (no innovation) will not keep us safe. The only way we will be truly safe is to “juke and jag” (innovation).

Risk Management

“If you don’t have any guts, if you don’t have any try,

you’d be damn luck to be ordinary.”
Dan M. “Buck” Brannaman, Horse Trainer


Yes, innovation does bring some risk. We’ve been taught that we have to stomach higher risks if we want higher returns. But we can mitigate risk by employing risk management strategies. We manage financial risk by diversifying our investments. We manage risk of personal assets and ensuring we provide for our families by purchasing insurance, health and life. Similarly, we can employ risk management strategies for marketing that will promote innovation, and reduce risk of poor choices or competitive inroads. For these we go to Boats & Helicopters.


Here are marketing innovation risk management strategies for your consideration:

1. Conduct “Due Diligence” – This is about challenging assumptions that we hold dear. This is about investigating the “conventional wisdom” of our company and category. Instead of grasping what and how we conduct business and dismissing what is novel conduct due diligence to determine their productivity. Hold up the conventional wisdom and generate potential ways to beat it. Assure all that the conventional wisdom will not be overturned unless we prove conclusively to have a more productive course of action. While an error in commission (poor execution) can hurt the brand, an error of omission (innovation) is more likely to cripple it.

2. Collaboration of the Matrix (Multi-Discipline) Team – Each member of our team (i.e., Product R&D, marketing research, agency, promotion, finance, etc.) has a specific expertise and with it a unique point of view and set of experiences that they can bring to bear on exploiting opportunities for growth, resolving critical issues and solving knotty problems that stall progress. Each member has a piece of the puzzle that constitutes the larger mosaic of success. Utilize the diverse team of expertise to contribute to the development of innovation and to pressure test it. By the way, this is not a ploy for sharing the risk so as to avert blame against ourselves but to ensure we have the necessary input to deal with contingencies.

3. Generate many ideas, frequently – As Seth Godin would express it, “Slay the Sacred Cow.” Then seek to generate ideas, lots of them, across all aspects of the business. The more shots we take on goal the better the opportunity to score. It is not about percentage of ideas that come out of testing that are successful but the percentage of ideas that we put into the marketplace (after testing!) that prove successful in achieving our business goals. This is akin to diversifying our investment portfolio (e.g., stocks, bonds, real estate, cash, etc.). We want to entertain innovation across a wide swath of business areas (e.g., packaging, clinical studies, promotion, product, etc.) with a variety of ideas in each. Idea generation should not be a sometimes thing but an every time activity. The worse time to go developing ideas is when we desperately need one. The forces in the universe will be working against us and we will desperately grasp at what seem to be promising ideas at the time that really prove unproductive and, consequently, fulfill our worse fears regarding the risk of innovation, failure.

4. Inspect what you Expect – Simply stated set action standards and test against them (using marketing research). Each and every innovation should have clear business goals and an estimated ROI (return on investment). If we cannot identify these measures then we are not deserving of receiving funding to support the recommended innovation. However, we need to go beyond our expectations to actually determine that we have achieved them. This requires thoughtful analysis following execution, which, in turn, enables us to gain precious feedback leading to adaptation that improve marketplace performance or to abandon what we had hoped to be productive innovation in favor of another activity. (One note, the level of risk has increased dramatically over the past years as a result of deep cuts in marketing research funding and the organizations moving forward with initiatives for which they do NOT know the outcomes. The single biggest risk for any organization is doing things for which they do NOT know the outcome. It’s time to get real! Stop referring to marketing research as “non-working.” What’s not working is “flying blind” and hoping for the best. “Hope is not a strategy,” or at least one with a high probability of success.)

5. Rollout to FieldTest and Adapt – We’re getting at two filters. The first is marketing research (see above) and the second is actual marketplace performance. Things don’t always go as planned or revealed by marketing research. So to mitigate the level of risk it is wise to proceed in a step-wise fashion to confirm the marketing research and adapt to optimize the innovation as it is rolled out to generate more favorable results.

6. Share learning – Now we get to another important facet of a “learning enterprise.” We share the results of our testing with everyone in the organization. This saves us from marketers reinventing the wheel and making the same mistakes that the organization has paid for with past failures. However, because something produced sterling outcomes with one brand does not guarantee it will do so with another, particularly if it is in another category. So we must go back to steps 4 & 5. Above all we should not launch any perceived innovation until we know what it will bring the organization in terms of business success!


The choice is ours: will we be turkeys with “More Innovation, More Risk,” turtles with “Less Innovation, More Risk,” or fly like eagles with “More Innovation, Less Risk?”


For assistance in developing a plan for “More Innovation, Less Risk,” and/or creating a learning enterprise please reply to this email.


Richard Czerniawski and Mike Maloney


Richard Czerniawski

430 Abbotsford Road

Kenilworth, Illinois 60043

tel 847.256.8820 fax 847.256.8847

reply to Richard: or



Mike Maloney

1506 West 13th

Austin, Texas 78703

tel 512.236.0971 fax 512.236.0972

reply to Mike: or

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