Monday, May 19, 2014
How Samsung Gets Innovations to Market
by Thomas Wedell-Wedellsborg and Paddy Miller
Let’s say you’re working in a new market, far away from headquarters, and you need to get approval for an initiative that is somewhat outside the company’s current strategy. What do you do?
A case study we just published on Samsung’s European innovation team offers some helpful insights. It details how in 2010, Samsung set up a small consumer-focused innovation team in London, headed by Luke Mansfield. The team’s mission was to come up with new products for the European market — and then, significantly, to convince senior management in South Korea to invest in those projects — several of which, it turned out, required Samsung to deviate from their current strategy within the product categories in question.
After more than three years of operation, it was clear that the team had worked out how to do this: by late 2013, the total measurable profit contribution from their projects was expected to hit half a billion dollars. As we spoke to them, Mansfield and his team shared five insights on how to work with senior management to get strategy-stretching innovations to market:
1. Negotiate the expectations up front.
Everyone realizes that a new market will often require deviations from the existing strategy. So have a conversation with your managers about how to handle these types of conflicts and negotiate increased autonomy for your team so you get some wiggle room on results.
Mansfield made it a precondition of accepting the job that he got a three-year grace period before he was required to deliver results. As he told us, “Getting the agreement in place didn’t prevent management from asking questions, but it did allow us to push back and tell them ‘no’ at times.”
2. Build trust with low-risk ideas.
As Mansfield’s colleague Ran Merkazy put it, “When we hire people, we explicitly tell them that their job is not to push for disruptive ideas at Samsung. Rather, it is to position themselves to create disruptive innovation. Before they can do anything, they need to move the needle on the trust gauge, making other people in the organization believe in them.”
In one case, the team managed to deliver a new, low-risk project to a senior manager in Korea just when he needed to present new ideas to his boss. He was eventually promoted, and became a useful resource for the team in their work to get more ambitious projects approved. Merkazy added, “Having built that initial trust means that once or twice a year if we run into resistance with a disruptive idea, we can bypass the middle levels and talk directly to the senior executives in the division. [But] you need to be very cautious about using that connection; bypass middle management too often and you risk turning them into enemies.”
3. Present a portfolio of options.
Team member Jerome Wouters explained: “If we present five concepts, we will make sure two of them will be low risk and more incremental, two will be a bit more ambitious and only the final one will be a high-risk/high-reward concept — but with some elements that will be doable in the short run, which makes the whole concept less crazy. That way, our stakeholders can select how much risk they are willing to take for their business given their current circumstances, instead of making it a go/no-go decision on specific ideas.”
4. Manage the choice of evaluation methodology.
Many large companies use established frameworks to assess new ideas, and by nature, methodologies favor specific types of ideas over others. To get ideas past the approvals gauntlet, it is crucial to have a detailed understanding of how the test works.
Mansfield’s team arrived at that insight after one of their earliest and most ambitious ideas (for a new kind of fridge) was rejected by headquarters. One issue was that Samsung used a specific quantitative survey methodology that, while good for assessing incremental products, was arguably biased against more radical ideas, such as the new fridge. Following that setback, the team took an unusual step: they developed their own evaluation methodology, and convinced senior management to use it alongside the standard one.
5. Consider going under the radar.
Sometimes, it is better to ask for forgiveness than to ask for permission — and in one case, the team deliberately decided to ignore the corporate rules. They had identified a problem with the Galaxy phone brand: If you switched to the Galaxy S2, it was difficult to import your contacts, photos and other data from your old (non-Samsung) phone. So they built an app called EasyPhoneSync that solved the problem, and got ready to launch it — only to be told to drop the project, as a team in Korea was working on a similar solution.
Mansfield’s team understood that some projects would be killed, and normally would have followed the order. But it was unclear when the other app would be released, and the team knew that the timing was crucial: the Samsung Galaxy S3 was about to be launched, and the lack of a good solution could cost Samsung lots of new customers. So they decided to take a risk and proceed with the launch of their own app.
It proved immediately popular, and by the end of 2013, it had been downloaded over a million times. As we have written elsewhere: If other options are closed to you, sometimes a bit of judiciously applied corporate disobedience can be the right way to go.
at 2:45 AM