by Kim J. Gifford

Doug Hall, serial entrepreneur, author, and Founder/CEO of Eureka! Ranch International – a 25+ year-old research consultancy for such premier companies as Proctor and Gamble, Disney, Nike, Hewlett Packard, and American Express – returned to Vermont this past February 2011 to motivate, equip with tools, and teach business leaders a systematic approach to leading profitable growth through innovation. Hall first brought his message to Vermont last May 2010 at an Innovation Engineering Leadership Institute (IEL) event sponsored by the Vermont Manufacturing Extension Center (VMEC) and other supporting partners, including: the Vermont Training Program, the Vermont Business Roundtable, Norwich University, the Vermont Technology Council, Vermont Small Business Development Center (VtSBDC), the University of Maine, and the NIST Hollings Manufacturing Extension Partnership (NIST MEP). 

Hall teaches a disciplined system for companies to create a continuous pipeline of innovative products, services and “meaningfully unique” ideas for which customers are willing to pay more money.

“What is really resonating with companies today is not so much the need to innovate for the sake of innovation, but a desire for a system to get current ideas to market faster and a continuous stream of new ideas,” says Hall.

In February, Hall spoke to 109 participants from 33 companies at the Woodstock Inn in Woodstock, Vt.  This event saw a higher percentage of companies from within the state attending as well as more teams of three or more members and more manufacturers overall, indicating the investment Vermont is making in innovation. “It shows we’re gaining momentum,” says Patricia Giavara, Assistant Director and Growth Services manager for VMEC.

“Some company leaders have asked me why VMEC is so focused on innovation,” says Bob Zider, VMEC’s Director/CEO. “My answer is simple. Over time, it’s a fact that product prices and profitability decline, and unless you have a pipeline of profitable products and/or services, you are at risk of falling into the decline phase of the business life cycle.”

A proven solution to survive in today’s “flat world,” says Zider, is for companies to “proactively reinvent their company offerings with ‘meaningfully unique’ products and services on a continuous basis.”

Studies show that 85% of business leaders tend to be reactive, with only 15% being proactive. Interestingly, based on the surveys Hall and VMEC conducted before the IEL event, a larger percentage of proactive companies were present at this February session. This supports what Hall has seen nationwide. He reports a change in the attitude on the part of business owners as the economy has started to open up a bit. “We see a lot more leaders here,” he says. “And, they are saying, ‘We are not going to make it the way we are. It’s time to do something else.’”

Companies can start by addressing their present pipeline. “We are trying to get people to accelerate the things they are already doing,” says Giavara, who is also a certified Innovation Black Belt. “Process improvements are important, but people tend to be too comfortable there. We are trying to push people out of their comfort zones and work in cross-functional teams to come up with new products and services they can sell to existing and new clients.”

The Innovation Engineering Management System that Hall and VMEC espouse is designed to accelerate a continuous flow of innovations. “We are boldly encouraging companies to confront their own business reality, and then give us just one day to help them “Jump Start” ideas and provide an initial action plan to begin growing their profitability,” says Zider. “We can then work with the company to help them implement an Innovation Management System that will accelerate a continuous flow of innovations – big and small – to address their company’s Very Important Problems and Opportunities for Profitable Growth.”

Companies Respond

Companies attending the IEL events are embracing the message. Timothy Holmes, Vice President of Engineering at GW Plastics in Bethel, Vt. refers to the lifecycle curve that Zider mentioned. “Although GW Plastics is a successful company, at some point we’re going to reach that peak and unless we innovate we’re going to start down that slope [toward decline]. That’s why I’m energized about this. I’m trying to think about all the ways that I can make sure the curve goes up in the other direction,” he says.

Holmes hopes to implement the “cross-functional approach” mentioned by Giavara in getting more people within the company involved in innovation. “Rather than just engineering and manufacturing, let’s bring our marketing and sales team into it as well, because when we say we can get things from point A to point B faster, they are going to have to go out and sell that to the market,” he says.

Mark Tecca, Director of New Business Development at King Arthur Flour in Norwich, Vt. found Hall’s talk about the rapid cycles of learning helpful. This method that encourages companies to Plan, Do, Study and Act, helps companies identify “death threats” – major hurdles to a project’s success – early on and take action addressing them.

“We’re thinking that rapid cycles of learning will help us reach a go/no-go decision on new products sooner in our process. One of the very new and different aspects of this program is to stop spending months and months working on five or six ideas at a time, but rather focus on one and have a weekly goal that you can try to reach so the idea doesn’t go stale,” he said.

What’s Working:

Innovation Black Belt Training at Country Home Products

Perhaps few attendees at last May’s event embraced Hall’s principles as wholeheartedly as Country Home Products (CHP), parent company to DR Power Equipment, Neuton, and Sunward solar hot water systems located in Vergennes, Vt. The company sent its leadership team of 10 in May 2010, returning 8 months later in February with an additional 31 employees. Having a continuous pipeline of new products and being able to speedily get them to market is critical for CHP. “The time and space we have to ourselves with any product is ever shrinking, so the pipeline has to be that much more robust. In the past, we could have a product line to ourselves for four or five years, now we’re lucky if it’s four or five months,” says Joe Perrotto, President and CEO.

Returning home in May, CHP began using some of the creative brainstorming tools in its meetings, but the real transformation began when the company received an invitation from VMEC to participate in “Innovation Black Belt” training with Doug Hall at Eureka! Ranch in Ohio.

Both Perrotto and Julia Gilbert, CHP’s Vice President of Marketing, have been participating in this training. “I have more confidence in being a process coach, so when others are trying to adapt an existing project through innovation engineering techniques I have more of a background to be able to say, ‘Oh, here’s how I might approach this or maybe you want to do a create session here to get some ideas,’” says Perrotto.

Perrotto reports that his company’s focus on innovation has resulted in a product development pipeline that feels “qualitatively and definitely quantitatively better than it did even three months ago.” By employing innovation engineering techniques such as “fail fast, fail cheap,” relying on mock-ups, prototypes and test markets and identifying early death threats, the company is able to evaluate more ideas up front in the hopes of identifying those that are more “meaningfully unique.”

“We can actually succeed more by failing more. Because we can do it fast, we are going to try 24 things and maybe only three work, but if we were only going to try two things before and only one worked, there is still more success even thought there is a lot more failure,” said Perroto.

CHP has also reversed the way it comes up with new ideas, before its innovation engineering training, CHP used to create 80% of its ideas inside the company and find 20% from outside sources. Now by mining the Internet and YouTube, CHP is finding that 80% of its ideas now come from outside sources and 20% from within the company. CHP has also begun inviting suppliers and sources of these ideas to be part of the discovery process, taking some of the early evaluation work off their hands.

Using the innovation engineering tools they now employ, CHP projects 10 to 15% of revenue in 2012 will come from entirely new product lines and 20 to 30% the following year. It also expects revenue growth in existing product lines as it applies these tools to drive new features, models, and accessories.

Out-of-the-Box Thinking at Vermont Teddy Bear

Cathy Carlisle, Director of Manufacturing at Vermont Teddy Bear in Shelburne, Vt. calls the innovation exercises to create more out-of-the-box ideas, her company’s biggest takeaway from Hall. Although Vermont Teddy Bear has traditionally run surveys to test its product, after attending the IEL, the company has begun to look at surveys in a new way.

“We are thinking more of why we are doing these in light of the whole test market and the concept of fail fast, fail cheap. We are also thinking more about the problem our product is solving for customers and why they should care. This thinking really came out of the session with Hall and looking at the features and benefits of new products and how these can translate into commercial success,” says Carlisle.

Vermont Teddy Bear also learned from Hall the benefit of using interns to bring in a fresh perspective and recently hired a second intern since the May event. Engaging outside voices has also been another approach adopted by Vermont Teddy Bear, which ran an innovation session to generate ideas for its Valentine’s Day line with representatives from other companies present.

New Ad Campaign at Isovolta

Isovolta, an Austrian-based company with a Rutland, Vt. branch is a niche manufacturer of mica paper used in the electrical industry. Isovolta first sent four of its employees to an Innovation Engineering Leadership Institute held in Maine and then sent two additional people to the Vermont event last May. Isovolta was in the middle of a “technically based” advertising campaign when it attended the first IEL event. After hearing what Hall had to say about marketing, they decided to revamp their approach. “We totally changed it, asking why should the customer care about this product and developed an overt promise. It simplified our message,” says Jonathan Roberts.

Recently, one of Roberts’ sales employees approached him about a product from Austria that he felt would make a good replacement for a competitive product already in the marketplace.

“He asked should we do this testing or should we do that testing?” says Roberts. “I asked him, ‘What did you learn at that Doug Hall seminar about failing fast, failing cheap? The best thing is to put the product in front of the customer and say here's the product, here’s the data sheet, this is where we’re using it, and does it make sense? You’ll get some fast feedback and you won’t sit there for the next six months trying to outthink the customer.”

Roberts also recently introduced to the company Hall’s “idea card” that allows a company to assess, on one page, an idea and the factors that can kill it upfront. He has been using this concept in Rutland and says there are plans for the corporation to adapt it in the Romania plant as well. Roberts also embraced Hall’s recommended mind mapping tool and is exploring TRIZ for product development and problem solving. While these tools have always been of interest, Roberts says having software available through Hall’s innovation tools web site has simplified their use.