Wouldn’t it be nice if a genie arose from a magic lamp and revealed the richest source of innovation for profitability in your business? With just one such innovation you could make a fortune for yourself or your employer. Peter F. Drucker was not a genie, but he was a genius. So respected was Drucker that even today, almost 10 years after his death, there are Drucker Societies all over the world that meet once a year at his old school in Claremont, California. They are still teaching and applying his business principles.
Drucker wrote that the “unexpected” was the richest source of opportunity for successful innovation. Unfortunately, unexpected occurrences are not only many times neglected but also are frequently actively rejected. As a result, they are never exploited as innovations. German chemist Alfred Einhorn became distressed when dentists began using his anesthetic drug Novocain, which he intended to be used only by medical doctors. He was so upset that he refused to sell it to dentists, and he traveled up and down Germany spending a lot of money to discourage this “incorrect” use until a smarter entrepreneur took over and made millions by selling Novocain to dentists, its most common use today.
Is the Classical Glass of Water Half Empty?
You know the classic question about optimism: Is the glass of water half full or half empty? That all depends on how you look at things, of course. Moreover, a person’s mood, values, beliefs, or what has been seen or known previously all affect one’s perception of possibility.
How can you take advantage of perception as a source of innovation? At one time, a rip in clothing was cause for the quality inspector to reject the product and throw it out, or if the tear was minor, it might be sold at a significant discount. However, the late 1960s saw the onset of the Hippie Generation, with young people wearing clothing that was often intentionally ripped. Almost overnight, worn-out, faded, frayed, and, yes, even ripped jeans became status symbols preferred by many younger prospective buyers.
In response to what was perceived as desirable, jean manufacturers began to make clothing that intentionally resembled clothing once considered damaged, suitable only to be thrown away or donated to worthy organizations for recycling. This is an example of exactly what Peter Drucker meant by an unexpected occurrence.
There undoubtedly was risk involved in producing large quantities of ripped, frayed, and faded jeans and then to market them to an unsuspecting public. But once a market arose for clothes that had been discarded in the past, jean manufacturers would have been foolish to ignore it.
Sometimes the Market Talks to You
Drucker’s advice was that when something unexpected happened, the entrepreneur should immediately examine that closely. Indeed, the market may be giving you the richest of all sources of innovation.
The modern bikini was another unexpected innovation. It was introduced in 1946 by Louis Réard, an automotive engineer who was managing his mother’s lingerie boutique near Paris, and his partner in the venture, the fashion designer Jacques Heim. Heim noticed the increasingly revealing two-piece bathing suits that women were wearing and the more liberal laws and attitudes toward skimpy clothing in France. The partners named their new swimsuit after Bikini Atoll, where the United States had tested the atomic bomb. They chose the name because they believed that the revealing swimwear would cause as much of a stir worldwide as had the atomic bomb, which had been dropped on Japan the year before.
They advertised their bikini as “smaller than the smallest swimsuit.” At first, they were unable to find a model willing to be photographed wearing it (and this was France, known to have the most liberal dress codes for women!). They ended up hiring a nude dancer from a Paris casino, who was not afraid to wear it. Today, we all know that their innovation paid off. The bikini in its many varied forms is a billion-dollar business—and not just in France, either.
What You Should Do When Strange Things Happen
As mentioned above, managers looking for new innovations should study every unexpected outcome or occurrence. In doing so, they need to ask four basic questions:
1. What would it mean if we exploited this development? That is, what are the short-term costs and benefits of developing this unexpected result into an opportunity?
2. Where could it lead us?
3. What would we have to do to convert it into an opportunity? In other words, how would we convert the unexpected result into a profitable product or system for the company?
4. What would be the plan for doing this? What resources would be needed? What would it cost? What would the timing look like? What would be the approximate quantified results of the investment?
Ask yourself: Have I thrown away any potential billion-dollar innovations by ignoring the unexpected results?
© 2013 William A. Cohen. All rights reserved. Adapted and excerpted from The Practical Drucker: Applying the Wisdom of the World’s Greatest Management Thinker, by William A. Cohen. Used with permission of the publisher, AMACOM, a division of American Management Association.