Whoosh. Paper airplanes fly overhead in all directions, landing on tables, laps and on the floor of the Sheraton Hotel’s Conference Center. A man, short in stature, but big in personality stands at the front of the room, clad today not in one of the typical Hawaiian shirts he favors, but rather a more sedate navy polo, jeans and his traditional bare feet. A scene from an unruly classroom? Almost. This is a classroom of sorts, but there is nothing unruly about it. Rather the man in front, Doug Hall, founder and CEO of Eureka! Ranch – an idea incubator and research consultancy for some of the nation’s leading companies including Nike, Proctor & Gamble and Disney – has everything under control. The planes represent one of many creativity exercises Hall teaches business leaders to get their juices flowing and provide the stimulus for the creation of new, innovative and in Hall lingo “meaningfully unique” ideas. When Hall says “meaningfully unique” he is talking about ideas innovative enough that customers are willing to pay more money for them.

“The only reason to innovate is to make more money because you’re either a commodity or a monopoly,” Hall tells participants at one of his Innovation Engineering Leadership Institute (IELI) events.  “Our goal is to make you more of a monopoly so you make more money. You know there are products you buy that you pay extra for because they’re worth it. [When it comes to innovation] that’s all we’re talking about. It’s that simple.” 

By we, Hall is referring not only to himself and his folks at Eureka! Ranch, but also to the nationwide National Institute of Standards and Technology (NIST) Hollings Manufacturing Extension Partnership (MEP)-affiliated centers that have contracted Hall to help them develop a process to effectively stimulate growth and innovation primarily among small and medium-size U.S. manufacturers. The result of this pilot effort has been two-pronged: first, the establishment in April 2009 of the U.S. National Innovation Marketplace (www.USAinnovation.org), an online network connecting buyers and sellers designed to accelerate connections between innovations and company needs; second, the launch of an innovation education effort designed to teach and build the confidence of company leaders in their ability as Hall puts it, to effectively “create, communicate and commercialize” (i.e. bring to market) meaningfully unique ideas for new products, services and/or business models. 

The IELI events that the NIST/MEP network and Hall are hosting around the country are the foundation stone in this innovation education thrust. These events are three-day, “deep dives” designed to teach leaders a data-driven system for accelerating innovations to market. The events first provide course content then allow participants to apply what they’ve learned through exercises, which in turn are reviewed and reapplied in what Hall notes is an effective learning cycle for most adult learners. It is one thing to hear about these events, and another to see them in person as I did when I attended all three days of Vermont’s May event. Hall, who has been called everything from an “innovation guru” to Robin Hood, taking the ideas of big companies and giving them to the small, developed the IELI course, refining it at his alma mater, the University of Maine, where he serves as adjunct faculty. Hall, an inventor, researcher and author, received his initial baptism in innovation, when, after earning his chemical engineering degree, he joined Procter & Gamble, soon taking a record nine innovations to market in 12 months. Although calling Hall a messiah to today’s business leaders may seem an overstatement, one thing is for sure, he has both a warning and some good news to share.  

The Message 

The message the NIST/MEP network and Hall want to get across in light of the recent economic climate is not hard to comprehend: it can no longer be business as usual for American companies. Today, American businesses face stiff foreign competition from countries like China and India that seem to have low cost manufacturing down cold. Hall explains that to compete, American companies need to heed the mantra, “if you aren’t unique you better be cheap” and for most companies cheap just doesn’t cut it. The solution – innovation. 

The idea behind the IELI events is for small and medium-size businesses to learn the techniques of big companies that are constantly evolving their offerings and maintaining a continuous pipeline of innovation. They say the climate to do so seems right with a shift today toward open innovation. Hall points out that at Proctor & Gamble 85% of new development used to come from ideas generated in-house. Today, less than 50% do so. Bigger companies are now going outside their R & D departments to look for opportunities, often turning to smaller companies, that can be more flexible and move more quickly to market, for ideas or products. 

Hall offers good news for companies unsure how to begin: there is a system for doing innovation and this system works. In 2008, Georgia Tech research with 738 manufacturers confirmed that companies competing with a primary business strategy of innovation have a three-year average profit margin that is over 50 percent higher (14.5% versus 9.2%) than companies that rely on other marketing strategies such as lower prices, higher quality, fast delivery or voice-of-the customer. 

Unfortunately, statistics also show that only 15% of companies are likely to be proactive, meaning they move quickly to embrace new concepts and go forward, while 85% are reactive, waiting to see if the market will change and never taking action. Fortunately, Hall says, his methods work for both. 

“If you are proactive we are going to give you some tools to accelerate and if you are reactive, but now have to change, which is scary, we are going to give you structure, tools and a systematic process to do so,” says Hall. 

A Vermont Event 

Sounds good, but does it work? Hall and his team of interns from Eureka! Ranch poll participants at the IELI events. Early data showed that their confidence in their abilities to create, communicate and commercialize went up after attending. In fact, in the crucial area of commercialization or bringing a product to market, their confidence went up 80%. 

Hall’s principles are as follows: “Feed the brain with stimuli, diversify your thinking, and drive out fear using the what he refers to as “the scientific method” of ‘fail fast, fail cheap, get smart’” (i.e. using quick, low-cost experiments to weed out bad ideas before spending too much time and money on them.) 

Hall offers a variety of brainstorming techniques and out-of-the box methods that run the gamut from mind mapping to more linear approaches such as checklists and matrices. And, if some of the exercises feel uncomfortable at first, don’t worry. Hall backs up everything he teaches with hard data and offers reasons for it all right down to his bare feet – a way to better grip the stage and keep from tumbling off. The flying airplanes? A creative means for participants to feed off a chain of ideas as each plane flies to a new recipient, who jots down a response to a previous suggestion written on the wings. 

Vermont’s recent IELI event provides a microcosm to study what Hall and the NIST/ MEP network are trying to accomplish. Sponsored by the Vermont Manufacturing Extension Center (VMEC) – one of approximately 60 NIST/MEP centers nationwide – and other partnering entities, the event held at the Sheraton Hotel and Conference Center in Burlington, Vt., attracted 134 participants from 40 different companies and organizations; each attending for a variety of reasons. 

Joe Perrotto, president and CEO of Country Home Products, home of DR and Neuton Power Equipment and Sunward Solar in Vergennes, Vt., had worked with VMEC on several projects over the years, including  introducing Lean manufacturing to their factory. They came with the majority of their senior leadership team in the hope of learning new ways “to get better, faster, and smarter at filling the top of our funnel with ideas,” said Perrotto. His chief concern coming in was whether one could take what he viewed as essentially a creative, inspirational act – coming up with new ideas – and actually make it a process.

Vermont Teddy Bear Co., now targeting the children’s market in addition to their traditionally adult market, came “needing new tactics, approaches and different ways to lead innovation,” said Cathy Carlisle, director of manufacturing. 

Adam Tarr, CEO of NEHP, a company that designs and builds modular products for the life sciences, solar and electronics industry in Williston, Vt., brought along Brian Duerr, in charge of business development.  Duerr summed up their challenge coming into the event: “How do we get customers whether known or unknown to buy our products?” 

Joan Denizot, President of Super Sized Cycles, a Fairfax-based business producing bikes for the larger-size customers, not only wanted to figure out more effective ways to let customers know about her company, but to find some creative solutions to allow her to continue to build her bikes in Vermont as opposed to going overseas. 

Whatever their reasons for attending or their confidence level coming in, one thing is for certain, by the end of day one they are sure to be confused. This is okay, says Hall, and is not merely a product of the intense amount of information, exercises and repetitions with which they are pummeled. Rather, he explains, it is an indication that “what they thought they knew they didn’t,” and illustrates participants waking up to the true challenges their companies face, the necessity to change and how to do it. 

“They may be dumber at the end of day one than when they started, but at least they are grounded in reality. By day two they start to put things together and leave with greater confidence in the end. It is a rollercoaster ride of emotions, the pattern has become very reproducible,” says Hall. 

“Part of me is very confused. It goes so fast and what I’ve realized is I’m not quite as creative as I think I am,” said Denizot at the end of day one. 

A Look at What Happens 

If confusion is where the events begin, it is not where they end. Beginning at 7:00 a.m. each day and concluding at 10:00 p.m., with a two-hour break for dinner, the event becomes almost a bootcamp-like experience. Participants move frequently from table to table working on everything from creating new products and services to writing new marketing messages. A bonding and exchange of ideas takes place that who knows, in the spirit of open innovation and networking, might also be called upon when they return to their own companies. Collaborating on their homework, the team from Vermont Teddy Bear Co. – which recently introduced a scented bear to its product line – and the representative from Autumn Harp, a cosmetic producer in Essex Junction, Vt., realized that they shared certain commonalities regarding scent technology and were able to exchange concerns and tips about the manufacturing process, etc. 

If people were frustrated it didn’t reflect in their participation with many companies working on their homework (applying the techniques they learned that day to their own ventures) and participating in passionate discussions sometimes long after 10:00 p.m. William Murray of CITEC, a New York-based MEP Center leader, expressed the view of many when he said, “I couldn’t sleep. I stayed up thinking about everything I learned. It’s so exciting.” 

Some had the opportunity to enact one of the primary principles Hall teaches – “fail fast, fail cheap” – on the spot. Hall encourages companies to test ideas through quick, low-cost experiments. Andrew Pearce of Simon Pearce, a hand-blown glass and pottery designer, took advantage of the room of people to share the company’s brochure and poll them on what they thought his company did. Many did not know, providing Pearce with a quick but firm understanding that his company may need to change its print marketing. Others used the collaborative time to identify possible “death threats,” (i.e. things that could kill an idea) another Hall concept. These could run the gamut from manufacturing to legal issues or be as simple as marketing message. Hall emphasizes proper communication as key and tells of a Maine-based company focused on the sale of jewelry made from peapods that found success simply by changing its name from Natural Expressions, which indicated little about what they did, to the obvious Peapod Jewelry. 

Many participants cited the opportunity to work on the “real-life” challenges of their neighbors as one of the highlights of the experience. Participants were not only able to brainstorm new product ideas for Olivia’s Croutons, based in New Haven, Vt, but also had the chance to critique and offer creative marketing solutions for Danforth Pewter’s brochure – solutions that Danforth has already heeded, amping up mention of the overt benefits of their products to consumers.

“Getting to work on a product you know with the folks in the room to give them feedback was really great,” said Perrotto. 

On the final day, Hall had participants create a designated, hypothetical product using materials on site, forecast its chances, and bring it to market. 

“It all came together for me with the final exercise,” said Jill Berry-Bowen, CEO of Northwestern Medical Center in St. Albans, a hospital with 600 employees and 75 physicians. “It shows there’s a lot we can learn from manufacturing.” 

Next Steps 

Weeks after the event ended, enthusiasm remained high. Country Home Products had a list of 15 to 20 people ready to attend a future event. The company has also begun applying idea generating techniques to new product development and trying out  “fail fast, fail cheap” methods. 

“As direct marketers, we always felt we could test new product concepts at relatively low cost, but we’ve really challenged ourselves, finding we can take it down a notch further in terms of expense and effort by doing things like testing advertising concepts before a new product is fully developed and getting some basic consumer reaction,” Perrotto said. 

Denizot, too, quickly put “a fail fast, fail cheap” plan into action upon returning home by starting a blog to gauge interest in a 90-days of exercise plan. Although she quickly got 10 responses from people willing to “join her team,” she noted that many had not returned to the blog, helping her assess where to put her efforts.  Her decision about whether to go overseas still looms, but a recent article about her dilemma in The New York Times has generated a lot of response that she is presently sorting through. She has connected with VMEC for help in moving forward. 

NEHP, too, has turned to VMEC following the event for help with its marketing message. Tarr and Duerr also plan to share with their company the knowledge they have acquired. 

“We think we should take 10 things we learned and incorporate them over the course of a year,” said Tarr. 

Vermont Teddy Bear not only took on a toy design intern following Hall’s suggestion that interns have great ideas, but also launched an idea innovation session incorporating participants from outside the company. They also ran one of their new product ideas through Eureka! Ranch’s Merwyn Business Simulation (an online tool offering innovation sales forecasting.) 

“We learned that we need to improve our marketing message for this new product line because our concept score was not as high as we would like it to be,” said Carlisle. 

In summing up the event, Hall said, “I’m very optimistic for Vermont. I sense in them a spark. When given a plan and an idea, they know how to get you from here to there.” 

And, offering companies a system to generate ideas that will make them more money is exactly what Hall and the NIST/MEP network have set out to accomplish. As Hall says,  “It’s that simple!”