• by Sarah Mahoney  @mahoney_sarah, January 15, 2010

For many of America's marketers, this recession has waged a cold war on ideas. With budgets slashed and head counts whacked, the general business environment has been grim enough so that even a company's brightest stars are more likely to be hiding under desks than talking up new-product plans.

Part of the problem, Phil Roos, managing director for GfK Strategic Innovation, tells Marketing Daily, is the corporate world's uneasy relationship with innovation.

Q: As we move toward recovery, is it time for a corporate mind shift on innovation?

A: At the very early stages of the recession, there was a lot of reorganizing, a lot of budget cuts. But there's a lot of evidence that more innovation happens in poor economic times, and that makes sense -- if there was ever a time to innovate, it's now. Rules change. Competitors are weaker, so there's an opportunity for share gain. Consumers are in peril, as well. So there are new opportunities to serve them.

Q: What is the major misconception about innovation?

A: There's an ongoing sense that innovation just somehow drops from the sky, that it's this gift of creative genius. And it's true there is some randomness to it. But there are certain patterns in innovation that are quite predictable, and you can manage the process.

Q: So how can companies manage these big ideas?

A: Actually, that's another misconception. Big ideas -- really out-of-the-box ones -- don't usually work. We may like to think that being innovative is about having the most different idea in the world, but human beings are creatures of familiarity. We want all the things we're going to buy, embrace or adopt to have some cord of familiarity. Take the iPod, which seemed like a really breakthrough idea. But it came after 20 years or so of consumers getting used to new ideas about digitization and portability, all the way back to the Sony Walkman. If it had launched 10 years earlier, it wouldn't have been as successful.

Q: What's another not quite out-of-the-box innovation?

A: Oral care. Putting a piece of tape on your teeth to generate a chemical reaction might seem like an out-there idea. But there was a whole set of similar news -- nicotine patches, for example -- that got people used to the idea of adhering something to the outside of their body for a chemical change. And that worked with other trends -- younger consumers had been brought up in the celebrity culture of very white teeth. Baby Boomers were looking for easy ways to look younger. But the essential news was about taking something that already was out there, and bringing it into a new context.

Q: So how can companies find that type of not-so-innovative innovation?

A: The most important thing is to think beyond your business. One of the biggest limitations most companies have is that they have so much in-depth understanding of their own business, but the ideas that have big potential for your business probably already exist in some other industry, in a parallel world. A new trend in beverages is drinks that improve your health, and even your skin. If you were only looking at the beverage world, you wouldn't ever have seen evidence that such products could be successful. You needed to look to the beauty and spa industry, where they first developed. You need to have a cross-category, cross-geographical view of the world.

Some companies can even innovate within their own brands -- look at the way Procter & Gamble is cutting across silos to combine Olay and Cover Girl, for example, or Crest and Scope.

Q: Some companies isolate new-product executives -- they work in separate offices, to protect them from corporate naysayers. Is that smart?

A: I'm a believer in the hybrid approach -- there does need to be a degree of insulation, people who are allowed to explore without being told 'It can't be done' or 'It won't make money.' But unless you get everyone else involved fairly early, it won't succeed. Making an idea work is as important as having an idea.