Frontiers in Product Innovation Strategy: Predicting Market Outcomes and Creating Winning Products for a People and Planet-friendly Future 3031258223, 9783031258220

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Diana Derval

Frontiers in Product Innovation Strategy Predicting Market Outcomes and Creating Winning Products for a People and Planet-friendly Future

Business Guides on the Go

“Business Guides on the Go” presents cutting-edge insights from practice on particular topics within the fields of business, management, and finance. Written by practitioners and experts in a concise and accessible form the series provides professionals with a general understanding and a first practical approach to latest developments in business strategy, leadership, operations, HR management, innovation and technology management, marketing or digitalization. Students of business administration or management will also benefit from these practical guides for their future occupation/careers. These Guides suit the needs of today’s fast reader.

Diana Derval

Frontiers in Product Innovation Strategy Predicting Market Outcomes and Creating Winning Products for a People and Planet-friendly Future

Diana Derval DervalResearch Tallinn, Estonia

ISSN 2731-4758     ISSN 2731-4766 (electronic) Business Guides on the Go ISBN 978-3-031-25822-0    ISBN 978-3-031-25823-7 (eBook) https://doi.org/10.1007/978-3-031-25823-7 © The Editor(s) (if applicable) and The Author(s), under exclusive licence to Springer Nature Switzerland AG 2023 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and ­transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Switzerland AG. The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

To Johan, my light brick

Foreword

About 5 years ago, a colleague of mine from another business unit shared a few slides on their recent work with Diana in one of our meetings. It was brief but it was memorable. The timing was perfect because I had just started the strategy review process, and was in the midst of developing our 5-year Product Innovation Plan for Southeast Asia. To cut the story short, with tremendous curiosity and anticipation, I reached out to Diana and to no surprise, we started our discovery journey that eventually led to the development of a new consumers’ segmentation based on sensory profiles, which was instrumental in the shaping of our subsequent 5-year Product Innovation Strategy. Stealing with pride…this quote was shared by Diana in our session… “Research is to see what everybody else has seen, and to think what nobody else has thought.” Albert Szent-Györgyi [Nobel Prize 1937] I started the journey in search of ideas/things that nobody has found, looking for ideas that will lead to breakthrough innovation so to speak. I soon realized, it is equally powerful to see what everybody else has seen, and to think what nobody else has thought of. Sensory profiling is one that helped explain scientifically the underlying or unspoken “whys” of softness preference, thickness preference, color preference, just to name a few. These preferences are hardwired, and it does not change. From my perspective, and as the President of Vinda Group South East Asia, Product Innovation Strategy should be mid-to-long-term and stand vii

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with time as much as possible, as it involves investment, R&D, technology and equipment development. What matters most when rethinking the Product Innovation Strategy is to identify insights and consumers’ preferences that are hardwired as the foundation to the innovation and key deliverables, and layering over it with features and benefits that evolve with trends. Vinda Group South East Asia Kuala Lumpur, Malaysia

Su Ting Nee

Preface

Leaders cannot innovate like before and would gain to embrace creative problem-solving approaches. Throughout the chapters, we provide a critical review of latest trends from ESG to NFTs and help separate the wheat from the chaff. We also investigate overlooked sources of inspiration like nature, civilizations, and biosciences to devise novel people and planet-friendly solutions. Here is a selection of 13 fun facts we will explore: 1. Ethical people are more innovative 2. People tend to flush precious health biomarkers 3. Some regions count more rich-identifying people than others 4. BTS became the most successful band ever by respecting its ARMY 5. Quality and risk management can boost innovation (no, but really) 6. You can find the same ingredient in water filters, BBQs, and cat litter 7. Most modern inventions existed already in ancient times 8. Adaptive management is the best way to handle uncertainty 9. There is more to peanuts than meets the eye 10. Outsourcing can make or break a brand 11. Scrub Daddy, like Sponge Bob, had to face misunderstanding and rejection ix

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12. The Body Shop is so good at targeting various markets that people wonder whether it is an Indian brand 13. Unlearning is a mandatory step Strategy is at the heart of change, as illustrated by international case studies, such as Xiaomi, The Body Shop, BTS, Futurium, MAIF, VELUX, MyBioma, Chocopain, BoAt, Noodelist, Kärcher, Clorox, mCaffeine, NASA, and De L’Europe. Pushing the Frontiers of Product Innovation Strategy is the only way to predict market outcomes and innovate with impact and I hope that by the end of the book you will have tools and ideas to be the change. DervalResearch, Tallinn, Estonia

Diana Derval

Online Course for the Book

As a user of this book, you have free access to an online course on Springer Nature’s own e-learning platform, which complements the book. You can access this online course via a link in each chapter. If the link is missing or does not work, please send an email with the subject “Book+Course” and the book title to customerservice@springer nature.com. Online courses offer you many advantages! • Learn online anytime and anywhere • With interactive materials such as quizzes or assignments, you can continuously check your learning progress • High-quality course content from renowned authors • Receive your certificate after successful completion

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Acknowledgments

I am immensely touched by the foreword Su Ting Nee, President of Vinda Group South East Asia accepted to write. My deepest gratitude goes to the leaders who let me in on the secrets of their product innovation strategy, and in particular Dr. Stefan Brandt, Director of Futurium, Tarun Sharma, co-Founder of mCaffeine, Thuong Tan, Founder of Noodelist, Robert-Jan Woltering, Managing Director of De L’Europe, Dr. Yin Yu Lum-Gousgounis, Board Advisor of AML. The book and video came to life thanks to Muhammad Luthfi Bahrudin designs and dronebrothers footages. Many thanks to Annabelle Galea and David Gardner for the discerning editing work. It was fantastic to collaborate again with Prashanth Mahagaonkar, Executive Editor at Springer Nature Group, and Christian Isele, Manager Distance Learning at Springer Nature/Iversity. I want to say a big thank you to DervalResearch clients, teams, and board of directors, in particular Sylvain Hermange, Program Manager Mission and Impact at MAIF, and Sandrine Goldie, Business Advisor. Mille mercis to my executive education participants—from ESSEC, HEC, Sorbonne, Fudan—as our conversations were always great sources of inspiration. The support and active participation of my family and friends in most of our exploratory research is invaluable. xiii

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And I would be able to do nothing—especially writing such demanding books—without the extreme love and care of my Johan. Finally, I want to thank you dear reader for keeping a curious mind and embarking on this book journey with us!

Reviews for Frontiers in Product Innovation Strategy “This book perfectly conveys Professor Diana Derval’s inspiring and disruptive research focused on helping companies identify game-changing assets to support sustainable product innovation strategies. I’ve had the opportunity to work with Diana on several occasions on product innovation and product portfolio optimization. Diana’s unique skill set and adaptive mindset, focusing not only on personas and consumer needs, but also on a wide range of multi-dimensional and multi-cultural insights validated by scientific predictions, make her book and course a must for anyone looking for innovative and sustainable ways to disrupt their business. A fascinating read!” —Christel Poncin, Category & Revenue Growth Director at Paulig “Very good material for MBA and executive education participants interested in adaptative management, planet-friendly solutions, and the application of biomimicry to genuinely ethical and innovative product strategies. I personally very much appreciated the structure and format of the content illustrated with plenty of examples and testimonials from innovative industry leaders, short and captivating videos, hands-on learnings, and growth hacking cases.” —Marie Khayat, Senior Lecturer in Ethical Marketing and Employer Branding, ESSEC Business School & Executive Education programs “Frontiers in Product Innovation Strategy provides a great framework to understand how brands can innovate on various levels from products to overall identity. And this explained with real case study examples from successful brands makes it very practical. What I found particularly thought-provoking is how the “delivering people and planet-friendly solutions” part sheds light on the fact that making sustainable solutions and conscious choices over quick wins is the way brands should move forward. Along with this, analyzing the impact and adapting at different stages will help brands develop sustainable growth strategies. Insights like these are what make Frontiers in Product Innovation Strategy really compelling.” —Ayush Singh, Brand Design & Communications, MUD Jeans (B Corp, Best for the World in Environment)

Contents

1 Delivering  People and Planet-Friendly Innovations  1 1.1 Innovation and Ethics: The Slap and Run Game   1 1.1.1 Casual Gaming, Wait Marketing, and eSports   1 1.1.2 The Perfect Flow   2 1.1.3 Mission and Ethical Dilemmas   4 1.2 Innovation and Sustainability: Futurium   6 1.2.1 Technology × Nature × Human = Different Futures  6 1.2.2 MDGs, SDGs, STI for SDGs  11 1.2.3 Sustainability as an Innovation Driver  12 1.3 Measuring Innovations’ Impact: The Body Shop  14 1.3.1 Strategy Mapping and Stakeholders  14 1.3.2 Impact and Biodiversity  15 1.3.3 Leadership, Passion, and Innovation  17 1.4 Chapter Highlights  18 References 18 2 U  nveiling Hidden Opportunities 21 2.1 Deep Needs: Peanut Butter  21 2.1.1 A Household Item  21 xvii

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2.1.2 Neurosciences, Opioids, and Secret Ingredients  22 2.1.3 Identifying Game-Changers: Chocopain  23 2.2 Extreme Innovation: mCaffeine  25 2.2.1 Microbiome, Behavior, and Preferences  25 2.2.2 Creating New Markets: Coffee from Bean to Bar  27 2.2.3 Human Evolution and Innovation Recycling  31 2.3 The Best Solution: Snapchat  33 2.3.1 Product Innovation Strategy  33 2.3.2 From Selfie-Sticks to Drones  34 2.3.3 Making Virtual Opportunities Real  36 2.4 Chapter Highlights  37 References 37 3 L  ocating Profitable Markets 41 3.1 Innovation and Expansion: BoAt Earbuds  41 3.1.1 Luxury or Good Enough Products?  41 3.1.2 Matchmaking and Mapping Priority Markets  42 3.1.3 Inspiration for Innovation  44 3.2 Risk Management in Product Development: Mobile Phones 45 3.2.1 Outsourcing vs. Insourcing: Micromax  45 3.2.2 Quality Management and Solving the Right Problems 47 3.2.3 Risk Management and International Expansion  48 3.3 Thinking by Analogy: Bosch  49 3.3.1 Sensors and Smart Laundry  50 3.3.2 Ancient and Modern Innovation  52 3.3.3 Biomimicry and Nature-Inspired Innovations  53 3.4 Chapter Highlights  55 References 56 4 Defining  Sustainable Growth Strategies 59 4.1 Real Potential: The Bike Case  59 4.1.1 Expected Gains and the 5% Rule  59 4.1.2 Real Market and Pivoting to Profitable Channels  60 4.1.3 Measuring the Return on Innovation Investment  62

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4.2 Centenarian Brands: De L’Europe  63 4.2.1 The Secret to Brand Longevity  63 4.2.2 Hidden Champions and Niche Markets  67 4.2.3 Fast-Moving Companies and Adaptive Management 68 4.3 Growth Hacking: BTS  70 4.3.1 Building a Strategy on the Go: Run BTS  70 4.3.2 Growth Hacking and Bricolage  73 4.3.3 Technology, Servitization, and Internal Innovation 75 4.4 Chapter Highlights  76 References 76 5 Optimizing  the Product Portfolio 79 5.1 Driving Category Innovation: Sunscreen  79 5.1.1 The Proliferation of SKUs  79 5.1.2 Sunsetting Products and Product Portfolio Management 80 5.1.3 Rituals and Beauty OCD  82 5.2 Sustainable Investment: VELUX  84 5.2.1 Achieving Lifetime Sustainability  84 5.2.2 Interesting Diversifications  85 5.2.3 ESG, Nutri-score, and Other Ratings  86 5.3 Product Portfolio: Clorox  87 5.3.1 A Cohesive Portfolio: Clorox  87 5.3.2 Private Labels  89 5.3.3 Mitigating Product Development Uncertainty  90 5.4 Chapter Highlights  91 References 92 6 Building  a Visionary Innovation Roadmap 95 6.1 Futureproof Innovations: The Cockpit of Tomorrow  95 6.1.1 The Future of Mobility  96 6.1.2 Looking from a Fresh Angle  96 6.1.3 Research and Development Efforts 99

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6.2 Unlearning Innovation: MAIF 99 6.2.1 Unlearning and New Product Development 99 6.2.2 Advisory Boards as Innovation Labs 101 6.2.3 New Business Models: Noodelist 103 6.3 Innovation Roadmap: Xiaomi 105 6.3.1 How to Involve Experts 106 6.3.2 Innovation Roadmap: Xiaomi Automated Driving 107 6.3.3 Alliances for Smart Cities 111 6.4 Chapter Highlights  112 References113 C  onclusion117

About the Author

Diana Derval PhD, EMBA, Chair of DervalResearch, is a pioneer in decoding human behavior and preferences with biosciences. Member of the Society for Behavioral Neuroendocrinology, and Jury for the CES Asia Innovation Awards, Diana is the patented inventor of the Hormonal Quotient® (HQ) nominated for the Edison Awards, and the creator of the Derval Color Test® taken by 10+ million people around the world. Harvard Business Review contributor, finalist of the Berry-AMA Prize for most innovative marketing book with “The Right Sensory Mix,” recommended by Philip Kotler, Diana turns fascinating neuroscientific breakthroughs into powerful business frameworks and helped Fortune 500 firms including Sephora, Michelin, Sofitel, Philips, and L’Oréal accelerate their development with a focus on planet and people-friendly products and experiences. Multiplying discoveries, along the way, on the variations in sensory perception among individuals and populations, Diana continuously uses the findings to advance research for a better immune system, hormonal balance, and microbiome. The clinical research Diana initiated together with NIH and OLVG Hospital on the link between taste buds and diabetes opened the way to new prevention roads to combat chronic diseases. Honorary Adjunct Professor at Donghua University in Shanghai, Diana Derval is regularly featured in the media, conferences (TEDx Talks, IFA, CES), and corporate seminars, and is known for delivering memoraxxi

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ble MasterClasses even virtually—partly because of the cool purple hat but not only. Diana’s favorite topics are Senses and Sensors, Hormones and Behavior, and anything that touches on Innovation. You are welcome to connect via [email protected] or https://www.dervalresearch.com Other Books by the Same Author Derval, D. (2022). The right sensory mix: Decoding customers’ behavior and preferences (2nd ed.) Management for Professionals, Springer. ISBN 978-3-662-63794-4. https://link.springer.com/book/10.1007/ 978-3-662-63795-1 Derval, D. (2018). Designing luxury brands: The science of pleasing customers’ senses. Springer. ISBN 978-3-319-71555-1. https://link.springer. com/book/10.1007/978-3-319-71557-5 Derval, D. (2016). Luxury brand marketing 奢侈品品牌营销. Donghua University Publishing. Derval, D. (2011). Réussir son étude de marché en 5 jours. Eyrolles. ISBN 978-2-212-54958-4. Derval, D., & Bremer, J. (2012). Hormones, talent, and career: Unlock your Hormonal Quotient®. SpringerBriefs. ISBN 978-3-642-25713-1. https://link.springer.com/book/10.1007/978-3-642-25713-1

List of Figures

Fig. 1.1 Fig. 1.2 Fig. 1.3 Fig. 1.4 Fig. 1.5 Fig. 1.6 Fig. 1.7 Fig. 2.1 Fig. 2.2 Fig. 2.3 Fig. 2.4 Fig. 2.5 Fig. 2.6 Fig. 2.7 Fig. 2.8 Fig. 3.1 Fig. 3.2 Fig. 3.3 Fig. 4.1

Flow and perception of time  Futurium  Futurium view  Futurium Mobility Lab  Futurium Hyperloop  Innovating with Impact  Impact Strategy Map: The Body Shop  Peanut and kappa receptors Game-changers Microbiome enterotypes mCaffeine espresso coffee bathing bar mCaffeine espresso coffee body wash mCaffeine coffee assortment mCaffeine coffee beans—gift kit The best solution: The selfie Hearing patterns Sources of inspiration Analogy map: Smart laundry Sequential (| |), sequential-indexed (H), and indexed (*) brain types Fig. 4.2 De L’Europe Fig. 4.3 De L’Europe Loft Fig. 4.4 De L’Europe ‘t Huys Deluxe Suite

4 7 8 8 9 13 16 23 24 26 28 28 29 30 34 43 45 51 61 65 65 66 xxiii

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Fig. 4.5 Fig. 4.6 Fig. 4.7 Fig. 4.8 Fig. 5.1 Fig. 5.2 Fig. 5.3 Fig. 6.1 Fig. 6.2 Fig. 6.3 Fig. 6.4 Fig. 6.5 Fig. 6.6 Fig. 6.7

List of Figures

De L’Europe MENDO Adaptive vs. traditional management Growth hacking: BTS Prenatal hormones biomarkers Product portfolio optimization Beauty OCD signs Clorox portfolio of brands Heating and cooling substances Unlearning innovation Noodelist Noodelist—Lemongrass Vegan Chicken’ish Noodelist—Bold & Juicy Shiitake Noodelist—Double Trouble sampler box Innovation roadmap: Xiaomi

66 69 72 74 81 83 89 98 101 105 106 107 108 110

1 Delivering People and Planet-Friendly Innovations

In this chapter, we show with The Body Shop case that it is possible to create people and planet-friendly innovations. We evaluate different futures with Futurium, measure the impact of innovation strategies, and start by reviewing some ethical dilemmas with the casual gaming case.

1.1 Innovation and Ethics: The Slap and Run Game We had just received the different gaming consoles available in the market and the associated popular games. Our mission for the summer was to evaluate the booming casual gaming market and formulate some recommendations.

1.1.1 Casual Gaming, Wait Marketing, and eSports We knew a lot about hardcore gamers, their behavior and preferences, and it was exciting to explore casual gamers, who play simple games on their mobile phones. The most notable ones like Angry Birds or Candy Crush were an instant success as people could suddenly play on their phones, instead of staring at other passengers on public transport. © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 D. Derval, Frontiers in Product Innovation Strategy, Business Guides on the Go, https://doi.org/10.1007/978-3-031-25823-7_1

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In medieval times, shooting games (with bows and arrows) took the form of competitions, coming with huge prizes like tax exemptions. The French royal family initiated such games to discreetly train people and get them ready in case of war (Derval, 2022). When we observe an eSports battle, whether Call of Duty or Counter Strike: Global Offensive, the players seem dead serious. League of Legends even made its way to the Asian Games in Hangzhou, confirming that players should be considered Olympic athletes. Some degree of competition is often part of the game, whether to beat another team, another player, a high score, or our own high score. Ranking-obsessed players are constantly benchmarking their skills, as some would do playing bowling with “friends,” or shall I say benchmarking buddies. The eagerness to win can be powerful: There was no way our colleague would participate in a Just Dance session, until we displayed a score and then, in disbelief, we watched him perform the funky dance routines. His usual jam was more Assassin’s Creed. In ancient Greece, the Olympics were synonymous with free wine and food, attracting crowds from all over the world. Olympic games, as opposed to exhibitions with ambulant vendors, gave local businesses the opportunity to showcase their savoir-faire and promote their products while spectators were waiting for the performances and browsing around. This Wait Marketing approach, consisting in communication at the right moment at the right place, has been successfully applied in casual gaming, turning each micro-moment into an opportunity to interact and play. Communicating when people are waiting and receptive has proved to be more impactful and respectful (Derval, 2018).

1.1.2 The Perfect Flow We planned some interviews with casual gamers and I was made aware of some fine hierarchies, as you have casual games and hyper-casual games, even easier to play and often complimentary—some of them are available on Netflix and Meta. If the rules are not that complex, I would say that performing well at these casual games requires a certain level of skills, starting with reflex. Candy Crush and its ancestor Tetris will solicit one’s color vision and 3D rotation skills, Angry Birds one’s aiming skills, and

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Slap and Run one’s aiming while in motion skills. While waiting on public transport or after a day of work, players will feel relaxed and be distracted by the game—which remember, was the purpose—only if they have sufficient skills to perform the task. The flow and the perception of time are closely linked to how rewarding the activity is, depending on each player’s dopamine mechanisms (Fung et al., 2021). Capturing gamers’ attention, and keeping them engaged, is mostly achieved with a slightly challenging task. Other factors, that influence the perception of time, can help create an immersive gaming experience. Some are related to the context and include familiarity, temperature, light, sound, and others to the player, like mood, pulses, level of energy, attention, memory, and pain (Fig. 1.1). The science behind it is that the same neurons encode both space and time together. The Nobel Prize in Physiology or Medicine 2014 saluted the O’Keefer, Moser & Moser discovery of these “place cells,” present in the brain, and playing the role of our “inner GPS” navigation device (The Nobel Prize, 2014). It has since then been revealed that both place and time are encoded in the pyramidal neurons, located in the hippocampus, and they form our memories. The Eiffel Tower-looking neurons can store both dimensions together or separately. Memories are therefore associated with the place they are tagged in, as well as with the multisensory input received at that particular moment. When and where we play is equally important. A game tells us a lot about the player. I could not help but get fascinated by the Slap and Run game. So the story is that you run, and on your way, you slap random people, while still running. I must admit the name of the hyper-casual game is quite good and descriptive. Players can sometimes slap female characters (it is a wild guess as the visuals are voluntarily simplified) and they can slap them on the ass, for a nice variation in the game. I can imagine how with deep fake, players could also download the pictures of people they know to be able to slap familiar faces.

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Fig. 1.1  Flow and perception of time (Courtesy of DervalResearch)

1.1.3 Mission and Ethical Dilemmas What is terrible in product innovation, is that teams crave for finding some killer applications and brilliant ideas, but many of them are not ethical, or clearly borderline. Based on our observations, it seems that violent games do not make people violent but violent people pick up violent games. A lot of research articles highlight that aspect. A sure thing is that violent games put “everyday sadists” in a good mood (Greitemeyer et al., 2019). What is more disturbing is that gaming is very often training. So what are we training players to do with a Slap and Run game? Might be a good outlet for a delivery guy at the end of the day. But what if the players take

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it more literally and it kind of validates the violent behavior and makes them better at the task? We did not have all the answers, but decided not to recommend a Slap and Run type of game, or at least not in this format. At each level of the product innovation process, executives have the power to gauge the situation and make some ethical calls. Luckily, we spotted other lucrative hyper-casual games, involving more running than slapping, and the game publisher came to the same conclusion. The easiest definition of ethics would be not to harm. Doctors used to follow the Hippocrates Oath that states “I will abstain from all intentional wrong-doing and harm” and this can be applied to leaders and companies. Making business decisions, anticipating all implications and possible side effects, is the starting point. A strong sense of ethics will automatically lead to sustainable strategies that will then force organizations to innovate. Instead of considering the growth of the organization alone, leaders can measure its contribution to the whole ecosystem. Of course, stakeholders, including shareholders, need to be on board and regulations should be strict with cheaters, as corruption and straight pass need to be contained. If not, then ethical leaders are being put at a disadvantage. By the way, other industries like pharmaceuticals are more under scrutiny than gaming as the side effects of unethical behavior are more direct and obvious. Over the past 20 years, pharmaceutical companies paid the US federal and state authorities over $33 billion for various misconducts, including falsifying research results, ghostwriting journal articles, promoting non-FDA-approved drug applications, and bribing health personnel. Based on the review of global pharmaceutical companies’ revenues and legal settlements, bad performance seems to be the main driver in misbehaving—I would add combined with a blatant lack of ethics. Creating new markets by campaigning about a newly labeled disorder like Irritable Bowel Syndrome might sound ok, but certain behaviors are putting people’s health at risk and need to be identified. Innovative firms spent more on R&D, less on marketing, and were less engaged in patient welfare misconduct (Arnold et al., 2022). The R&D vs. Sales/Marketing expenses is an interesting ratio to follow. Teams in charge of producing all kinds of clinical trials and the associated publications are often attached to the R&D department even though their role seems more on the

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marketing and sales side of things. A very detailed analysis is therefore needed to fully understand the product innovation dynamics. Concerning our Slap and Run friend, it made me smile to discover that the publisher Voodoo is a French company—all of a sudden all the slapping around weirdly made total sense. Voodoo just celebrated 6 billion downloads of its hyper-casual games, becoming one of the top publishers together with Meta and Google, surpassing even Microsoft, Tencent, and Bytedance (Obedkov, 2022). Luckily among the 6 billion games’ downloads that the popular publisher can claim this past decade, many are less violent. Voodoo has regularly been suspected of “cloning” games—a nice metaphor used for IP stealing—but with Goldman Sachs and a bit of Tencent backing, they are now able to directly buy smaller players busy with promising games and technologies. Part of their strategy is also a partnership with Snapchat to test the engagement of their hyper-casual games, and to venture toward more lucrative hybrid-casual games, adding a monetization layer and other in-app purchases (Snapchat, 2022). Ethics and innovation could well be working hand in hand.

1.2 Innovation and Sustainability: Futurium Another factor influencing innovative strategies and business models is for sure sustainability, as it forces one to consider different futures.

1.2.1 Technology × Nature × Human = Different Futures What best way to contemplate the future(s) than on the skywalk of the Futurium in Berlin, overhanging the Spree and the Reichstag? The astonishing piece of architecture proposed by the German Ministry of Education and Research and designed by Richter & Musikowski invites over three floors and more than 3200 m2 to explore the futures of technology, nature, and society (Figs. 1.2, 1.3, 1.4 and 1.5). Just celebrating 1.2 million visitors, The House of Futures’ director Dr. Brandt welcomed us into this interactive museum that truly walks the talk.

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Fig. 1.2  Futurium (Courtesy of Futurium, photo: David von Becker)

The covered in solar panels roof captures not only the sunlight but also rainwater to generate electricity and heating for the site. The Futurium building holds a gold standard in sustainability and produces part of its electricity and heating/cooling needs via solar panels and a solar thermic system. A patented mechanism encapsulates water in paraffin for long-­ lasting performance (Futurium, 2022). The space, at the same time covered, green, and open, lets plenty of fresh air and daylight in, creating an oasis for people thirsty for knowledge and inspiration.

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Fig. 1.3  Futurium view (Courtesy of Futurium, photo: David von Becker)

Fig. 1.4  Futurium Mobility Lab (Courtesy of Futurium, photo: David von Becker)

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Fig. 1.5  Futurium Hyperloop (Courtesy of Futurium)

Futurium has been designed as an open platform for debating different options for the futures and Dr. Brandt highlights: “We talk about futures in the plural because nobody can know how the future will look like and therefore we want to transmit an open picture. What we really want to achieve is having people think about the future, imagining different futures, and trusting themselves to shape different futures.” Since its opening in 2019, Futurium has made the 3000 daily visitors reflect on important topics through three programmatic pillars: permanent exhibition spaces, workshops in the Futurium Lab, and events held at the Forum. “We want to connect nature, human, and technology” explains Dr. Brandt, “In our thinking spaces on technology we explain for instance how smart cities work, and discuss the chances and risks, such as the impact on data privacy. In our thinking space on nature, we discuss our path toward more sustainability, and a circular economy. And in our human, or society, thinking space we think about common grounds to achieve better futures together. Being closest to real life is one of our major goals and, I think, is also one of the reasons for our success, the reason why so many people visit Futurium and somehow feel connected.”

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Futurium makes sure to implement new topics every year. The 2022 update of the permanent exhibition was on the futures of mobility, and the 2023 update will address the futures of democracy: How can democracies better deal with the sustainability challenge? What has to change within democracies to be really able to act? In 2024, Futurium will tackle the difficult question of natural resources: How can we use our natural resources more responsibly? Are there new resources like hydrogen that can be explored? What has to be changed? If Futurium Forum regularly arranges thought-provoking lectures exploring an eclectic mix of topics from medical robots, to European identity, the central question remains “How do we want to live?” “We help people really connect with the topics of futures,” emphasizes Dr. Brandt “Everybody has a word to say about the future. You can change futures in your daily life, for instance in your way of consumption, or nutrition. You can also go a step further and join initiatives, and associations, that try to drive sustainability. We want to make clear that every bit of involvement is better than nothing. If people come into our House and get this spirit, and get a more encouraging view of the futures, then we have achieved something.” The House of Futures has become a Berlin landmark—among the top five visited museums—and the hot topics people are most curious about involve robotics and green energy. When visitors enter the exhibition, a little RFID tag allows them to share their opinion. To engage citizens, admission to Futurium exhibition space and Futurium Lab is free—thanks to the support from the German Ministry of Education and Research, and from 14 other stakeholders like leading research organizations, foundations, and research-oriented companies. Visitors can continue the conversation digitally as well. “Your Emotional City” project for instance is aimed at finding how people feel in specific areas, neighborhoods, and parks of Berlin, and should contribute to improving the livability of the city. The citizen-science-project comes with an app—“Urban mind”—and a dedicated website emo.futurium.de to follow the progress.

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The budding content, real-life topics, and proximity of Berlin central station and the Bundestag, turned the House of Futures into a city hotspot, welcoming locals and tourists alike, with a multi-sensory and fully bilingual experience (English/German). Making new generations futureproof is key: “A mobile Futurium will be touring through schools in rural spaces, and bring our methods to the classrooms, to increase futures literacy also outside of Berlin,” highlights Dr. Brandt—also working for an inclusive society as an honorary board member of the Liz Mohn Foundation for Culture and Music, which actively supports initiatives like “Cultural diversity with music.” With the successful launch of Berlin Science Week in November—the week commemorating the fall of the Wall—the city of the bear has gained the nickname of “Brain City Berlin,” and Futurium is clearly at the forefront of this movement. This book comes with the complimentary Course Frontiers in Product Innovation Strategy: ▸ https://sn.pub/RcnzV5. The 35mn Espresso course includes a recap for each chapter, as well as exclusive materials, like our visit at Futurium and interview with Dr. Brandt.

1.2.2 MDGs, SDGs, STI for SDGs In the year 2000, 189 countries gathered and agreed on 8 Millennium Development Goals to tackle by 2015, including eradicating hunger and achieving environmental protection. I love to entertain some suspense in my writing but you probably guessed that the MDGs did not go so well and, in 2015, as the eight goals were not only unachieved but also impossible to measure, the United Nations decided to create more goals, 17, and to set a new deadline for 2030. Among the 17 goals, some are truly about the environment, others about social aspects, and one about helping others achieve the goals (Ansell et al., 2022). The UN Inter-Agency Analytical team reviewed and approved 460 SDGs good practices submitted by a broad range of stakeholders, and some patterns can be seen in the data and case studies made available through the SDG Good Practice Online Database, allowing one to search by region, and type of stakeholder: Global initiatives comprised 15% of the approved

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submissions and entries were received from Africa (16%), Asia and the Pacific (32%), Europe (18%), and the Americas (9%). Proposals came from sectors including United Nations/ Multilateral Bodies (21%), NonGovernmental Organizations (24%), Private Sector (15%), Governments (12%), Local governments (7%), and Intergovernmental Organizations (7%). A detailed analysis by SDG highlights that SDG 17 (Partnerships for the Goals), SDG 1 (No Poverty), and SDG 8 (Decent Work & Economic Growth) are most referred to in the approved Good Practices and SDGs related to the planet, especially SDG 14 (Life below Sea), SDG 7 (Affordable and Clean Energy) were the least referred to (UN DESA, 2022). The nice thought was that organizations would focus on a couple of goals that speak to them and once all the organizations around the world do this (note that only maybe 15% communicate on SDGs and their progress) then by a magical balancing effect, all goals would be under progress. Surprisingly, the most popular goal is consultancy about SDGs and the least popular one is about the environment. Aware of the lack of results, the UN is now promoting the use of STI—Science, Technology, and Innovation—to achieve the goals by 2030. Investment companies consider ESG—Environmental, Social, and Governance—aspects in their risk assessment, clouding the environmental dimension even further.

1.2.3 Sustainability as an Innovation Driver The intentions are good, but multiplying the goals and communicating about the method and instances rather than sharing some practical examples of transitions operated and the associated results makes it difficult for companies to follow. We dug deep with my team to curate some sources of inspiration and observed that sustainability can actually make companies more innovative—so it is the other way around. Incorporating Corporate Social Responsibility in the strategy increases the chances of introducing innovation, whether related to products or processes, or both, is what an analysis of 1286 Small and Medium Enterprises (SMEs) based in Poland established. In the European Union, if we consider the non-financial business market, SMEs are an innovation powerhouse accounting for over half the gross product and two-thirds of

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the employment. The SDG9 “Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation” resonated most with the managers’ actions (Zastempowski & Cyfert, 2021). The 17 goals are quite confusing and semantic analysis of social media confirms that they are often referred to in clusters or in pairs, like social justice PLUS_SPI gender equality. Goal 9 (Industry, innovation, and infrastructure) is described as having a pivotal role, as it connects to all the other goals. Innovation is indeed a tool and a goal by itself (Bellantuono et al., 2022). So far, organizations have been mostly concentrating on profits and exploiting existing resources. The unscrupulous ones alienate people and harm their environment, nature, and community altogether. We can see innovation as an enabler but we can also see ethics and sustainability as strong enablers: The combination of both can only push to be more innovative in order to solve business issues in a more elegant way, and innovate with impact (Fig. 1.6). Narratives about climate change can sometimes lack a specific call for action. The expression “climate change” is strange and probably means something like “long-term pollution that will doom us all.” Ancient civilizations were singing and sacrificing animals, or people, to regulate the weather and I hope we are not back to these dark times. Regulating pollution seems clearer and the example of the ocean’s acidification and marine aquaculture offers a great case study. Fossil fuels and other CO2

Fig. 1.6  Innovating with Impact (Courtesy of DervalResearch)

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end up in the ocean and lower water pH. Organisms like mussels struggle to build their shells through the usual calcification process in such acid waters. The mussel business is big in countries like Belgium so the question is will consumers appreciate the modified sensory attributes of the little friends accompanying their beer or not, and how to “fix” their taste and appearance (Oliva et al., 2022). Of course, we could always dress up the mussel with a little pompom hat to make it more appealing, we could regulate the water acidity in aquaculture, or we could preserve their natural habitat. Pollution, the use of the wrong crops or species for a given soil, and other human interferences create a chain reaction of fixes having all an unknown impact on people’s health. Innovators and scientists working on substitution products can no longer limit their work to check that the new solution fits with the jobs to be done, they have to thoroughly check the impact and side effects of their solutions.

1.3 Measuring Innovations’ Impact: The Body Shop 1.3.1 Strategy Mapping and Stakeholders Innovation is key for transforming the business and several tools are being used to help visualize the strategy, like for instance the strategy map. Strategy maps help clarify the steps required for a company to fulfill its goal and are often organized based on the Balanced ScoreCard (Schaller & Vatananan-Thesenvitz, 2022). Sustainable versions of the strategy map tend to add “society” and “planet” to the picture (Pm2consulting, 2022). For listed companies, the shareholders and the customers are in mind, sometimes the teams. The recent movement consisting in analyzing the impact on all stakeholders was calling for a new framework putting on the same foot, people, the company, and the planet. Based on our experience in the field, we propose a sustainable innovation strategy map in three columns (people, company, planet) and applied it to The Body Shop case.

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1.3.2 Impact and Biodiversity “Is The Body Shop an Indian brand?” is a funny question found on the Internet. The British cosmetics brand, previously owned by L’Oréal and now part of the Brazilian group Natura & co, made the most of Ayurvedic principles, it is true. Its tea-tree cure—with well-known anti-bacterial, anti-fungal, and anti-viral properties—took over the acne-care category and is now a must-have for oily skins. And local Indian brands like Himalaya and Biotique are totally surfing the wave. Fairtrade, cruelty-free, and empowerment are the trademarks of the brand founded in 1976 in Brighton, UK, and part of the fourth cosmetics group in the world. The fair sourcing of shea in Ghana helped empower women working in the field and positively impacted 49,000 people across 11 villages. Throughout the UK, since 1994, many women have joined the Body Shop At Home™ empowering program and organized product demonstration parties to generate revenues working from home (The Body Shop, 2022). The overall impact of The Body Shop’s strategy is positive (Fig. 1.7). In its B Corp certification report, the brand disclosed using the endangered species Euphorbia antisyphilitica and Cereus grandiflorus, but working on it, as they respectively account for 1.86 and 0.7% of the revenues. Ingredients are requested by the R&I team (Research and Innovation) and follow a rigorous sourcing process where biodiversity is respected and fair trade partners are identified. The brand also reported a mishap in Brazil where products were misclassified and The Body Shop paid fewer taxes than due, as well as another similar case in Mexico (B Corp, 2019). Being part of the Brazilian group Nature & co, together with Aesop (just acquired by L’Oréal) and Avon, helped optimize the finance streams but could possibly mean some movements in the future if the group decided to further adjust their brands’ portfolio (Natura & co, 2022). To gain back its momentum, The Body Shop could benefit from making its ingredients even leaner and using The Body Shop At Home™ network to distribute the products rather than Uber, for instance. Introducing the Vitamin C line made sense for some skin types, particularly in Asia,

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Fig. 1.7  Impact Strategy Map: The Body Shop (Courtesy of DervalResearch)

but Kiehl’s is already in the place, and the tea-tree products very popular in India can be purchased with a better-adapted formulation and price via Himalaya. The competition got tougher and innovation is needed in order to keep up. Always one step ahead, The Body Shop started a first-in first-hired open recruitment approach, where the first candidates who apply and positively check three criteria get the job (Marquis, 2021). By skipping interviews and background checks, the innovative and award-winning open hiring policy, is in line with the brand’s long history of empowerment and inclusivity.

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1.3.3 Leadership, Passion, and Innovation Tracking the positive/neutral/negative impact of innovation starts by tracking down any negative impact. Making sneakers out of plastic cannot compensate for human trafficking. Simple fact. One day we had to devise an expansion strategy for an electronics brand and needed to start by introducing the story behind it. When the CEO admitted the motivation was “money,” it took me off-guard. I appreciated the honesty though. Passion (for something else than money!) is probably a better driver as a leader will have a clear vision, the willingness to innovate and manage change, and might tolerate a bit of fewer profits in the short-term to build something grand, and might also, like the CEO of Patagonia, take all the needed steps to secure its employees’ jobs when leaving or retiring. Managers aware of the environmental issues are more likely to start green projects, even within heavily polluting companies (Yang & Liu, 2021). Introducing green product innovation strategies is a powerful way to shift the current trajectory. Having a positive impact sounds wonderful, but already having zero negative impact would be much better. Negative impact can take the form of pollution like overwhelming sensory signals (noise, chemical, visual), hormonal disruptors (chemicals), violence (from causing self-­ harm to slavery and other horrors), health disorders (obesity/anorexia, addiction, allergies, burn-out), financial precarity (with the associated housing and health consequences), and other environmental damages (dust, perfumes ending in water, soil degradation, microparticles). The cursor should be placed on protecting the most vulnerable ones as always. Caring for asthmatic people will save the fishes too. Science, Technology, and Innovation have the power to help achieve sustainable goals and a sustainable mindset will automatically push organizations to innovate. Here are some important considerations for innovators and leaders: • Avoiding negative impacts:

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It is good to design plastic-free packaging but it cannot compensate for commercializing hazardous genetically modified food products, to cite an example. People and planet-friendly go hand in hand. • Looking at the full picture: If we think nuclear energy is clean and safe, then we should also consider the provinces where uranium mining is taking place: The associated political unrest and the radioactive dust, radon gas, toxins, and other radiations emitted during the process. Analyzing the full supply chain from cradle-to-cradle and opting for renewable energies will make a huge difference.

1.4 Chapter Highlights –– Ethics call for sustainable and respectful solutions, that in turn trigger innovation and creative problem-solving –– Communicating at the right moment when people are receptive and increasing the perceived flow are the fundamentals of an effective customer experience –– The Futurium case highlights the importance of finding a balance between technology, nature, and humanity

References Ansell, C., Sørensen, E., & Torfing, J. (2022). The key role of local governance in achieving the SDGs. In Co-creation for sustainability (pp. 9–22). Emerald Publishing. Arnold, D. G., Amato, L. H., Troyer, J. L., & Stewart, O. J. (2022). Innovation and misconduct in the pharmaceutical industry. Journal of Business Research, 144, 1052–1063. B Corp. (2019). The Body Shop International. B Corporation. https://www. bcorporation.net/en-us/find-a-b-corp/company/thebody-shop-international

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Bellantuono, L., Monaco, A., Amoroso, N., Aquaro, V., Lombardi, A., Tangaro, S., & Bellotti, R. (2022). Sustainable development goals: Conceptualization, communication and achievement synergies in a complex network framework. Applied Network Science, 7(1), 1–21. Derval, D. (2018). Designing luxury brands: The science of pleasing customers’ senses. Springer. https://link.springer.com/book/10.1007/978-­3-­319-­71557-­5 Derval, D. (2022). The right sensory mix: Decoding customers’ behavior and preferences (2nd ed.). Springer. https://link.springer.com/book/10.1007/ 978-­3-­662-­63795-­1 Fung, B. J., Sutlief, E., & Shuler, M. G. H. (2021). Dopamine and the interdependency of time perception and reward. Neuroscience & Biobehavioral Reviews, 125, 380–391. Futurium. (2022). Home – Futurium. https://futurium.de/en Greitemeyer, T., Weiß, N., & Heuberger, T. (2019). Are everyday sadists specifically attracted to violent video games and do they emotionally benefit from playing those games? Aggressive Behavior, 45(2), 206–213. Marquis, C. (2021, November 1). With expanded open hiring program, the body shop creates a more inclusive and supportive workplace. Forbes. https:// www.forbes.com/sites/christophermarquis/2021/11/01/with-­expanded-­ open-­hiring-­program-­the-­body-­shop-­creates-­a-­more-­inclusive-­and-­supportive-­ workplace/ Natura & co. (2022, August 16). G-governance. Natura RI. https://ri.naturaeco. com/en/a-­natura-­co/the-­group/g-­governance/ Obedkov, E. (2022, May 5). Voodoo becomes 3rd biggest publisher by downloads on app store, only behind Meta and Google. Game World Observer. https://gameworldobserver.com/2022/05/05/voodoo-­becomes-­3rd-­biggest-­ publisher-­by-­downloads-­on-­app-­store-­only-­behind-­meta-­and-­google Oliva, R. D. P., Huaman, J., Vásquez-Lavin, F., Barrientos, M., & Gelcich, S. (2022). Firms adaptation to climate change through product innovation. Journal of Cleaner Production, 350, 131436. Pm2consulting. (2022, August 20). Why a sustainability scorecard? PM2 Consulting. https://www.pm2consulting.com/post/why-­a-­sustainability-­ scorecard Schaller, A., & Vatananan-Thesenvitz, R. (2022). Business model innovation roadmap (BMI-R): Insights from an action research in a German SME. Engineering Transactions: A Research Publication of Mahanakorn University of Technology, 25(1), 1–17.

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Snapchat. (2022). Voodoo. Snapchat Ads. https://forbusiness.snapchat.com/ inspiration/game-­changers-­voodoo-­teams-­up-­with-­snap-­to-­find-­tomorrows-­ gaming-­hits The Body Shop. (2022). Fair trade in beauty | Community fair trade | The body shop®. Beauty, Skincare, Bath & Body Products | The Body Shop®. https://www. thebodyshop.com The Nobel Prize. (2014, October 6). The Nobel prize in physiology or medicine 2014. NobelPrize.org. https://www.nobelprize.org/prizes/medicine/2014/ press-­release/ UN DESA. (2022). SDG good practices: A compilation of success stories and lessons learned in SDG implementation (2nd ed.). United Nations Department of Economic and Social Affairs. sdgs.un.org/sdg-­good-­practices Yang, G., & Liu, B. (2021). Research on the impact of managers’ green environmental awareness and strategic intelligence on corporate green product innovation strategic performance. Annals of Operations Research, 1–21. Zastempowski, M., & Cyfert, S. (2021). Social responsibility of SMEs from the perspective of their innovativeness: Evidence from Poland. Journal of Cleaner Production, 317, 128400.

2 Unveiling Hidden Opportunities

In this chapter, we see through the peanut butter and social media cases how users’ behavior is driven by their physiological makeup and deep needs. We study the mechanisms involved in extreme innovations in health tech and propose a way to unveil hidden opportunities.

2.1 Deep Needs: Peanut Butter We had a business meeting planned right after my keynote, at the last time slot of the day—thanks to weird and fascinating findings, I gained the reputation as being the only person able to stand in between delegates and the happy hour.

2.1.1 A Household Item We started the talks while enjoying some cheese. My team loves to join me in Chicago for food conferences: While I speak, they can enjoy the gargantuan buffet. The topic was so typically American in appearance: Peanut butter and more exactly how people prefer their peanut butter. The Retail Director, in charge of boosting the spread category, arrived accompanied by the media agency in charge of creating a social media © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 D. Derval, Frontiers in Product Innovation Strategy, Business Guides on the Go, https://doi.org/10.1007/978-3-031-25823-7_2

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campaign. When I asked who the typical eater was, they both looked at me surprised and answered “Everybody loves peanut butter!” To their defense, I just read in the local news that American vets had to issue a warning to dog owners about peanut butter sweetened with the canine-­ toxic xylitol as people would use peanut butter as a light treat for their pets. Invented by a Canadian pharmacist, peanut butter is so popular that it had to be banned in some schools to protect allergic kids. It always surprised me to have such a polarizing ingredient distributed on airplanes for example or other closed areas. Some people must really crave peanuts as much as others are allergic to them. To boost the spread category, our peanut butter champions need to be identified, as they will guide the social media campaign as well as the portfolio vision, the future expansion strategy, and the positioning. Luckily we did research on addiction a couple of months earlier and had some great hypotheses to explore. We finished the meeting at the buffet (the cheese was too good to go) and planned a follow-up call.

2.1.2 Neurosciences, Opioids, and Secret Ingredients Opioid receptors distributed across our body and brain bind to specific substances (Darcq & Kieffer, 2018). For instance mu receptors love sugar, protein, and fat, while kappa receptors crave nicotine, coffee, and peanuts (Fig. 2.1). What we discovered when looking into addiction is that some people have more kappa receptors, and are then attracted to nicotine, and to peanuts. Peanut butter can be a great diversion—no wonder airplanes and other non-smoking places offer peanuts as they do not want to deal with angry people waiting for their next fix. For people who have more mu receptors, the tobacco industry also added sugar in cigarettes (up to 10% in the most popular brands!) so that everyone gets addicted—nice. And in case one would intend to rub peanut butter all over someone’s body (I am not judging lifestyles), they might still want to check for possible allergies as mu and kappa receptors are also located on the skin (Tamagawa-Mineoka & Katoh, 2020).

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Fig. 2.1  Peanut and kappa receptors (Courtesy of DervalResearch)

Once the nature and effect of peanut butter are more transparent, it becomes clearer that the ingredient is a household must-have, and addicted people add it to whatever they can: Chocolate, ice cream, jelly sandwich, you-name-it. This is how you can distinguish the two groups of peanut butter eaters: the occasional ones, indulging in a peanut butter sandwich every other week, and the addicted ones, spreading peanut butter on everything at hand. The positioning of the product is similar to ketchup or a chili/condiment sauce people would travel with. The implications are that the product should never run out and that customers would be willing to make an extra detour to purchase their favorite jar, probably even selecting their shopping destination based on the coveted product’s availability.

2.1.3 Identifying Game-Changers: Chocopain Benchmarking competitors can help optimize products. Analyzing the positioning and jobs to be done can help find substitution products. But only biosciences will allow to unveil customers’ deep needs and identify game-changers (Fig. 2.2). Disruptive strategies are about new business models and modifications in the value chain that have the potential to change the market. Focusing on customers’ needs unlocks new opportunities rather than sharing existing market shares. A study on yogurt in Algeria reviewed recent

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Fig. 2.2  Game-changers (Courtesy of DervalResearch)

innovations in the field. Hodna, a new player, managed to supplant traditional and international brands with their 100% raw milk yogurt drink. The strategy worked because it combined the practicality of the drink with the use of cow’s milk rather than commonly used milk powder. Each major brand managed to become the leader in a given category over time, like Soummam in the yogurt cup sector, and the brands that did not rethink their strategy have been absorbed (Chemma, 2021). At the other end of the spectrum, too much and silly innovations can also tire customers. Chicken-flavored chips or yogurt might sound like a great idea on paper (really?) but not translate well in real life. It can also give the feeling that the brand has too much money to waste on silly ideas and should rather focus on delivering impeccably the current products. Disruptive strategies focus on a game-changing aspect that brings true value to the customer, a must-have, not a nice-to-have. Chocopain is a great example of innovating with a twist. Inspired by the famous Ferrero chocolate spread, the Senegalese brand decided to cook its own recipe (Nsehe, 2019). As many locals enjoy a Mafe peanut stew, it made sense to add peanuts to the formula. And it was an instant success. Chocopain peanut-chocolate spread comes in a family pot and individual sticks, to bring to school or work. The spread was launched by PATISEN, a group that took over the food industry in Senegal and is now distributing its products from Dakar to 20+ countries in Africa (Moussion, 2020).

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CEO Youssef Omaïs started trading flour and running the family bakeries, generating insights from the field and turning them into one successful product after another, beating the usual suspects like Danone, Ferrero, and Nestlé (PATISEN, 2022). The secret formula was to adapt to local dietary needs and of course: Peanuts. PATISEN took off thanks to its strategic alliance with the Singaporean king of palm oil, flour, and sugar Wilmar International (Wilmar International, 2022). With an above-average ESG rating, the agro-­ industrial giant showcases many initiatives in the field of people management and governance, which is fantastic, but not much about the impact of their ingredients like sugar on health. Star products like Chocopain peanut spread and Adja bouillon cubes are pleasing local taste buds and employing local teams, in the factories as well as in the field, with vendors paying daily visits to local markets, organizing raffles, and other fun animations. The health catchline used by the brands sounds a bit enthusiastic, as the products, even though reminiscent of traditional dishes, also contain processed ingredients. There would be a great opportunity for PATISEN to show the way by using more raw ingredients however the same partnership that started things off might make it complicated to rethink the business philosophy. A video summary of the Chocopain case is available in the complimentary Course Frontiers in Product Innovation Strategy that comes with the book: https://sn.pub/RcnzV5.  The 35mn Espresso course includes a recap for each chapter, as well as exclusive materials.

2.2 Extreme Innovation: mCaffeine Health and beauty is witnessing some extreme innovations, in particular linked to the human microbiome.

2.2.1 Microbiome, Behavior, and Preferences We can eat whatever we like as long as our microbiome agrees, or more specifically the different bacteria, fungi, and viruses nesting there. Three microbiome profiles—called enterotypes—have been identified

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Fig. 2.3  Microbiome enterotypes (Courtesy of DervalResearch)

depending on the food that they can or cannot easily digest. For instance, E1 people (high in bacteroides) can better digest meat than complex cereals, while E2 people (high in prevotella) can digest all kinds of greens and seeds, and E3 people (high in ruminococcus) can digest pretty much anything, including processed food (Fig. 2.3). Saturated Short Fatty Acids (SCFAs), with their anti-inflammatory and antimicrobial powers, seem to be involved in chronic diseases such as allergies, asthma, cancer,  autoimmune and metabolic conditions. Mapping the microbiome and decoding how the different genes and strains forming this sort of “microbial dark matter” influence health could open new prevention and treatment avenues (Hajjo et al., 2022). Incubated at the University of Vienna, Biome Dx (for Biome Diagnostics), for instance, revolutionized the world of personalized health with a microbiome analysis kit (Biome Diagnostics, 2022). The MyBioma service allows people to get a full picture of their intestinal bacteria, viruses, and fungi from the comfort of their toilets, in order to better adapt their diet and lifestyle. Isolating specific biomarkers in the microbiome can also help physicians evaluate whether patients will be prone to cancer immunotherapy side effects, for instance, and adjust the treatment accordingly. Expanding the company scope from a D2C (direct-to-consumer) to a B2B segment was not an easy task and it took many scientific publications and ISO certifications to convince the health practitioners. For instance, a test on patients affected by non-small cell lung cancer (NSCLC) showed that a combination of microbiome bacteria could accurately help identify 25 out of the 31 patients who were responders to the Immune-Checkpoint Inhibitor (ICI) therapy. This type of treatment, which consists in “freeing” T-Cells so that they can fight cancer cells, can have significant side effects in patients who develop an auto-immune

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reaction, attacking their own cells instead (Hochmair et al., 2022). The derived product commercialized to physicians, is called BiomeOne and involves the patient sending their feces sample by mail—a bit yuck for the mail people when we think of it, but quite easy to do and non-­ invasive. Biome Dx managed to venture into extreme innovations territory, creating a new market, while staying true to their strength: Providing diagnostics kits with an unparalleled unboxing experience. Each unique microbiome has a direct influence on its host’s health, but also behavior and preferences (Derval, 2022). Gut microbiome is regulating appetite and energy levels (Leung & Covasa, 2021), stress and even social behavior (Dinan et al., 2015). Gut and skin microbiome are deeply connected, via what is called the gut–skin axis (Sinha et al., 2021). Fruits, vegetables, and other seeds are known to improve the skin microbiome whether eaten or directly applied: Beauty truly comes inside and out. Take coffee for instance. A study in Japanese women showed that a daily consumption of the drink, high in polyphenols including chlorogenic acid, improved the skin barrier function, the overall pH balance, and skin hydration. No need to stay up all night to have beautiful skin, as decaf ’ works the same way (Fam et al., 2021).

2.2.2 Creating New Markets: Coffee from Bean to Bar mCaffeine brand decided to rub customers the right way with an assortment of coffee-based hair and skin-care products. Tarun Sharma, co-­Founder, and CEO of mCaffeine accepted to share his vision for the rising D2C brand: “For the new energy, as a millennial-loved brand, we decided to tap on points such as a) Attaining emotional intelligence, b) Developing and implying the strategy of 4 Es—Efficacy, Ethos, Experience, and Emotions, and c) Being a people-powered brand that is acceptable to every gender.” The Red Bull of personal care is celebrating international coffee day— every 1st of October—by launching new products, like the patent-­pending coffee bean-shaped soap bar that comes in Espresso (Fig. 2.4), Latte, and Cappucino brews (mCaffeine, 2021). The assortment would not be complete without some mCaffeine espresso coffee body wash (Fig. 2.5), mCaffeine naked & raw whipped cream body wash, or mCaffeine coffee body

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Fig. 2.4  mCaffeine espresso coffee bathing bar (Courtesy of mCaffeine)

Fig. 2.5  mCaffeine espresso coffee body wash (Courtesy of mCaffeine)

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Fig. 2.6  mCaffeine coffee assortment (Courtesy of mCaffeine)

shimmer of course (Fig. 2.6). Notable accessories include mCaffeine jade rollers, massage combs, and exfoliating bath gloves. We do not know when this love for coffee started but it seems very real as Tarun, while studying technology at the prestigious Indian School of Mines, was band manager of the indie-rock musicians Café Gramophone. “Our customers are highly self-aware, they look up to and seek brands and products that are a reflection of their own personas” details Tarun, “Hence, mCaffeine as a brand has always aimed at customer centricity, be it product innovation or technology, we are driven by our customers’ values, beliefs, aspirations, and needs.” With 70+ coffee based products in its portfolio, the D2C brand has already sold 10+ million products in its home market India—via platforms like Amazon and with the support of Instagram influencers—and is now eyeing the US and UAE markets (Lamba, 2022). “The beauty & personal care market has and will continue to evolve dynamically in accordance with the audience’s health and self-care needs” foresees Tarun, “We estimated this right when we embarked upon the mCaffeine journey. Along with that, internet democratization has ensured information symmetry between brands and consumers. We leveraged this opportunity by using technology to reveal the consumer demands and craft

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products as per that. Also, our AI & ML models enabled us to keep up with the latest trends that ultimately helped us design products that the audience expected.” mCaffeine is a proud gender-neutral and zero-plastic footprint brand, making the most of its powerful D2C capacity and fan base. The team understood the importance of gifting. Whether for bridal, festive, corporate, or personal occasions, friends and business contacts can be treated with signature teal boxes containing an assortment of different brews (Fig. 2.7).

Fig. 2.7  mCaffeine coffee beans—gift kit (Courtesy of mCaffeine)

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mCaffeine team is making the most of adaptive management and adjusting the brand to customers’ needs. “The personal care market has immense potential as it is strongly correlated to the growth of a human’s personal journey” remarks Tarun, “But the only thing that will upend the market is the inclination with the customer’s behavioral shift. For instance, mCaffeine is a brand with a strong ethos and our ethos sees a development every time we observe a pattern in our consumers’ behavior.” Growing fast, within 7  years, conferred the executive team with a wealth of knowledge and Tarun shared some lessons he has learned along the way: “We are one of the top brands in India known under the category of ‘new market disruption’, and that has helped us learn how a) Gaining a stronghold on the market simply needs a deeper understanding of your target audience, b) Your products do not have to compete with any high-end or legacy brands/items, it only needs to be a simplified solution to your customer’s challenges and problems while being easily accessible anytime anywhere.” In terms of diversification, natural ingredients are the key, and most brews already contain some cacao, for instance, known for its hydrating properties. At mCaffeine, they know their target personas deep inside and launched a refreshing summer green tea set of lotions that will certainly appeal to their customers. What is sure is that, for people sensitive to strong scents, food and coffee scents are way nose-friendlier. For people with many kappa receptors, bathing in coffee must be quite a rewarding experience as well—on top of the hydrating and beautifying effect for the skin microbiome.

2.2.3 Human Evolution and Innovation Recycling There is this misconception of human evolution with people innovating and doing a lot of new things. The history of engineering tells us that people are kind of doing the same things a bit differently. Automatic weapons (not sure those are a sign of “civilization” in the first place, but well) sound all modern and fancy until we read about Greek scientists and the repeating catapult they had designed. Some might argue we are walking on Mars, true but the orientation tool used by Mars Exploration

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Rovers is still the same old sundial compass, projecting the shadow on an object exposed to the sunlight (Rossi et al., 2009). Working for Michelin, I thought it was the only brand mixing food with weird items like tires, until I read about Chinese sticky rice lime mortar, and the role it played in the durability of the Great Wall. Maybe it all started like an aha moment of a construction worker having lunch? It is only recently that the excellent performance of this mortar has been cracked scientifically: The sticky rice helps the calcite—produced during the solidification of the singular mortar-gel—crystalize, conferring that incredible performance (Yang et al., 2009). Maybe feeding mussels sticky rice could help them reinforce their calcite shell too? Ancient innovation research and biomimicry are wonderful: We came across two completely different applications of calcite (in mussels and brick mortar) that opened the road to new solutions in both aquaculture and construction. Our ancestors were happily hunting and gathering, until somewhere in the Middle East, in what is now called Iraq, some thought it was a good idea to domesticate animals and control the growth of the crops, starting active genetical mutations, and behavioral and societal changes. The hunter was the bad guy and the farmer the reliable guy—a bit like the current meat-eater vs. vegan story. Considered a revolution, agriculture started many other aspects of “modern” life like storage or transportation, and inventions like pottery were instrumental in storing food (Foster & Foster, 2021). As people keep doing the same things but a bit differently, observing customers is a fundamental part of any product innovation strategy. Depending on the structure and size of the organization, different team members can be the voice of the customers and a great source of inspiration. A study on the different applications of bamboo from automotive to textile, dives into the respective contributions of the different innovation actors, whether R&D members or CEOs. Multiple observations, including research conducted in Germany by the 1978 Economics Nobel Prize laureate Herbert Simon, indicate that successful companies are introducing innovations to the market. Innovation is what allows the introduction of new products and experiences, and eco-innovation is here to limit the negative impact. The main sources of innovation are the CEO and board of directors, the R&D teams when at hand—mostly in bigger and medium-sized companies—and other workers in micro-companies.

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Among the innovative applications of bamboo, we can cite Lexus incorporating the environmentally friendlier material in the steering wheel, dashboard, and even speakers as bamboo can improve the timbre and sound. The anti-microbial properties, and readiness for circular economy made bamboo a popular fabric used in socks, towels, and toilet paper (Borowski, 2021). I do hope that these new applications will not take the bamboo out of pandas’ mouths. For those terribly reactive to wheat and corn, using bamboo toilet paper certainly sounds safer than current wheat pulp options being sold in mainstream products with little information to warn and protect people with allergies. From our work in the field, customer-facing teams (call center agents, vendors, on-site technicians, cleaning teams) are the best source of innovation together with the hands-on CEOs. In large companies, innovators can be found in each department and they have the ability to visualize the jobs to be done, which helps when most of the time is spent sitting in an office. They are more likely to be listened to if they operate in R&D or Innovation teams though.

2.3 The Best Solution: Snapchat Snap built a winning strategy and the best solution, at a given space-time, by combining smartphone and social media within Snapchat.

2.3.1 Product Innovation Strategy Product Innovation Strategy is all about decoding customers’ deep needs, reassessing the realm of possibilities, and devising the most sustainable solution at a moment in space-time. The deep needs can be observed and inferred using behavioral sciences, neurosciences, and the power of biosciences (the study of life) to map the invisible, and to go from “jobs to be done” to the physiological mechanisms that motivate the needs in the first place, and to link them with other attributes. This will also make it much easier to identify the target personas by their lifestyle, food preferences, or the colors they wear. The realm of possibilities encompasses evolutions in technologies, but also lifestyles and regulations. So keeping an eye on trends and laws, other

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geographical areas, other industries, as well as screening nature thanks to biomimicry, and reviewing ancient innovations are all very helpful activities that can be split and shared within a team or advisory board. The best solution at a moment in space-time will depend on how well it addresses the deep needs while making the most of the available realm of possibilities. In current times where the environment is a preoccupation, bio impact and risk analysis, ethics, and other indicators like ESG, can guide decisions. Substitution products, and not just direct competitors, should be seen as contenders.

2.3.2 From Selfie-Sticks to Drones The good thing about innovation is that customers’ needs never change, they are immutable. The realm of possibilities, on the other hand, fluctuates. This is why, at a given moment in time, better solutions emerge (Fig. 2.8). People always had to go from A to B but first they did it by

Fig. 2.8  The best solution: The selfie (Courtesy of DervalResearch)

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foot, then on a donkey, in a car, in a car with GPS, and tomorrow hopefully by teleportation. Snapchat understood it very well. People like to show off and with the rise of social media and smartphones, selfie cameras were introduced, replacing mirrors and paintings executed by masters. Mirrors were a big deal and contributed to the Venetian glorious times, as the Italians managed to engineer a mirror with transparent glass, as opposed to the metal or brownish mirrors used before. To protect the top-secret process, all skilled workers were consigned in a golden book and not allowed to leave the city (Barbini, 2022). Then came the selfie stick because to look good shooting from the right angle helps. The natural development is the selfie drone, and Snap teams—experts at observing social media users—did not miss this insight and launched Pixy, the flying drone camera. Ideally, and this is probably the forthcoming step, we would have a smartphone that turns into a drone. A bit like how cameras and phones were separate devices before converging. The legislation will be important to follow in the realm of possibilities, as right now for obvious safety reasons drones are not allowed in the center of Berlin, for example. The focus for the Pixy experiment seems to be the USA and France for now and in limited quantities (Nast, 2022). The realm of possibilities is not just limited to technology but also includes legal and privacy aspects. Those might have been neglected by the camera and digital lens maker when evaluating Pixy’s market opportunity (Ghaffary, 2022). To counter competitors like TikTok and Facebook, Snap is betting on Snapchat and its 347 million daily users as well as Snap Map the new feature that allows users to locate friends on a map, share pics, and navigate to them (Sawers, 2022). Spotlight is Snap’s division in charge of Lens Studio and, among other co-creation activities, they hosted the Lensathon. The hackathon assorted with $150,000 cash prizes was aimed at encouraging the development of augmented reality lenses for Snap (Spotlight, 2022). They certainly know their core business. Snapchat also introduced the dual camera function allowing users to shoot from both the rear and front cameras at the same time. Following the path of the popular app “BeReal” which randomly summons users to

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share what they are doing from all angles within the next 2 min (Gizmodo, 2022). The race for top-notch features is real, as Tiktok just introduced the similar Now feature.

2.3.3 Making Virtual Opportunities Real Understanding the deep needs, the context, and the realm of possibilities can help decode any new phenomenon and separate the wheat from the chaff. Are Metaverse and NFTs just hype? As with most novelties, we can observe four stages. Stage 1 is the gold rush, when people motivated by the need for money invest out of fear of missing out and will buy land and all kinds of NFTs. Stage 2 is the showing-off, when people motivated by the need for power will acquire arts or luxury NFTs to showcase their taste and wealth. Stage 3 is the belonging, when people motivated by the need to belong want to be part of the movement and will create or acquire related content and services. Stage 4 is the usage, when people motivated by the need for performance develop and use practical applications of the novelty. The Metaverse, in the sense of a virtual world, can be 100% virtual or mixed reality, with the Snapchat fun filters people use to add bunny ears or funky glasses to their faces. For some users, a Zoom meeting where their background can be customized is Metaverse enough, as they do not enjoy browsing 3D worlds—note that superior proprioceptive and 3D-rotation skills are required for that. Virtual worlds can be 2D or include streaming features like Weverse used by BTS. NFTs on the other hand, are an evolution of digital right management systems and are very well suited for publishing and trading music or books. Understanding how customers use the products and what their expected outcomes are, or the jobs-to-be-done, is the very first step to take in the product innovation plan. Based on a study showing that most successful innovations failed when first introduced, it is advised to have a process in place to learn and adapt from introductions rather than starting from scratch each time (Zarrabi et al., 2013). We were working with a technology firm and a new product innovation came to the table but was immediately discarded as and I quote “We have tried this before and it did not work.” Senior team members remembered the idea was abandoned but nobody could really explain to me why. Maybe the technology

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was not affordable or easy enough to use at that time? Recording all innovation opportunities in a database, with the go/no-go motivated decisions was a useful start. To make virtual opportunities real, innovators, entrepreneurs, and leaders should contemplate: –– Digging deeper. We have to dig deep to find the real needs, the real competitors and then make sure the evaluated solution is a must-have, thanks to observations and interactions with champions and experts –– Spotting Game-Changers. Using analogy and biosciences will help reveal hidden opportunities, focus on real potential, and spot game-changers

2.4 Chapter Highlights –– An innovation is just the best solution at a moment in space-time, based on customers’ deep needs, and the realm of possibilities –– The Chocopain case shows how to use bioscience to unveil hidden opportunities, like the peanut craving –– Opioid receptors and microbiome composition influence product preferences and help group customers by deep needs

References Barbini. (2022, February 8). AAV Barbini srl. https://aavbarbini.it Biome Diagnostics. (2022). Biome Diagnostics | BiomeDx. https://www. biome-­dx.com/ Borowski, P. F. (2021). Innovation strategy on the example of companies using bamboo. Journal of Innovation and Entrepreneurship, 10(1), 1–17. Chemma, N. (2021). Disruptive innovation in a dynamic environment: A winning strategy? An illustration through the analysis of the yoghurt industry in Algeria. Journal of Innovation and Entrepreneurship, 10(1), 1–19. Darcq, E., & Kieffer, B.  L. (2018). Opioid receptors: Drivers to addiction? Nature Reviews Neuroscience, 19(8), 499–514.

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Derval, D. (2022). The Right Sensory Mix: Decoding Customers’ Behavior and Preferences 2nd edition. Springer. https://link.springer.com/book/10.1007/ 978-3-662-63795-1 Dinan, T. G., Stilling, R. M., Stanton, C., & Cryan, J. F. (2015). Collective unconscious: How gut microbes shape human behavior. Journal of Psychiatric Research, 63, 1–9. Fam, V. W., Charoenwoodhipong, P., Sivamani, R. K., Holt, R. R., Keen, C. L., & Hackman, R. M. (2021). Plant-based foods for skin health: A narrative review. Journal of the Academy of Nutrition and Dietetics. Foster, B. R., & Foster, K. P. (2021). Civilizations of ancient Iraq. In Civilizations of ancient Iraq. Princeton University Press. Ghaffary, S. (2022, September 7). Snap CEO Evan Spiegel isn’t ready to sell his company. Vox. https://www.vox.com/recode/2022/9/7/23333455/snap-­ceo-­ evan-­spiegel-­code-­conference-­2022 Gizmodo. (2022, August 30). Snap wants to BeReal with its new dual camera feature. Gizmodo Australia. https://www.gizmodo.com.au/2022/08/snapchat-­ dual-­camera/ Hajjo, R., Sabbah, D. A., & Al Bawab, A. Q. (2022). Unlocking the potential of the human microbiome for identifying disease diagnostic biomarkers. Diagnostics, 12(7), 1742. Hochmair, M., Absenger, G., Ay, L., Robinson, I., Jansen, C., Sladek, B., et al. (2022). EP16. 01-015 introducing “BiomeOne” a microbiome-based biomarker to predict immune checkpoint inhibitor response in NSCLC 1 patients. Journal of Thoracic Oncology, 17(9), S561. Lamba, C. (2022, October 1). International coffee day: How mCaffeine is planning to put an Indian brand on the global map. Indian Retailer. https://www. indianretailer.com/interview/retail-­p eople/startup/how-­m caffeine-­i s-­ planning-­to-­put-­an-­indian-­brand-­on-­the-­global-­map.i2074 Leung, R., & Covasa, M. (2021). Do gut microbes taste? Nutrients, 13(8), 2581. mCaffeine. (2021, August 4). India’s first caffeinated brand for skin & hair care products. mCaffeine. https://www.mcaffeine.com Moussion, E. (2020, December 21). Comment Patisen a trouve Les bons ingredients de l’expansion  – Jeune Afrique. JeuneAfrique.com. https://www.jeuneafrique.com/mag/1084187/economie/comment-­patisen-­a-­trouve-­les-­bons-­ ingredients-­de-­lexpansion/ Nast, C. (2022, April 28). Snap is fueling our Selfie obsessions with a flying camera. Wired. https://www.wired.com/story/snap-­pixy-­drone-­camera/

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Nsehe, M. (2019, January 2). How senegalese entrepreneur Youssef Omaïs built a $200 million FMCG conglomerate. Forbes. https://www.forbes.com/sites/ mfonobongnsehe/2019/01/01/how-­senegalese-­entrepreneur-­youssef-­omais-­ built-­a-­200-­million-­fmcg-­conglomerate/ PATISEN. (2022). Success story PATISEN, a canal+ report. https://patisen.com/ en/success-­story-­patisen-­a-­canal-­report/ Rossi, C., Russo, F., & Russo, F. (2009). Ancient engineers & inventions. Springer. Sawers, P. (2022, September 5). Zenly is still hugely popular; why is snap shutting it down? TechCrunch. https://techcrunch.com/2022/09/01/zenly-­is-­ still-­hugely-­popular-­so-­whys-­snap-­shutting-­it-­down/ Sinha, S., Lin, G., & Ferenczi, K. (2021). The skin microbiome and the gut-skin axis. Clinics in Dermatology, 39(5), 829–839. Spotlight. (2022). Snap spotlight Lensathon. Snap Spotlight Lensathon. https:// spotlightlensathon.devpost.com Tamagawa-Mineoka, R., & Katoh, N. (2020). Atopic dermatitis: Identification and management of complicating factors. International Journal of Molecular Sciences, 21(8), 2671. Wilmar International. (2022). Sustainability. https://www.wilmar-­international. com/sustainability Yang, F., Zhang, B., Pan, C., & Zeng, Y. (2009). Traditional mortar represented by sticky rice lime mortar—One of the great inventions in ancient China. Science in China Series E: Technological Sciences, 52(6), 1641–1647. Zarrabi, F., Poursadegh, N., & Jafarvand, S. (2013). Alignment between innovation strategy and outcomes. Procedia-Social and Behavioral Sciences, 75, 18–24.

3 Locating Profitable Markets

In this chapter, we see with the consumer electronics and smart laundry cases how to locate profitable markets in terms of target customers and geographical areas, and we make the most of thinking by analogy and biomimicry to design inspired innovations.

3.1 Innovation and Expansion: BoAt Earbuds Innovative companies are more likely to expand but this does not mean that all markets are appropriate for a given product.

3.1.1 Luxury or Good Enough Products? When the Sales VP told me they wanted to enter the Indian market, I was worried. The level of administrative hassle and corruption was yet to be contained—I once sent a signed book to Mumbai and it ended up blocked by customs (I secretly think they wanted to read it). The plan was to distribute headphones. Bollywood movies are popular beyond India, and some vintage copies of the emblematic SRK (Shah Rukh Khan) movies are available in

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Europe. I bought one at this little Indian shop, together with some Neem toothpaste and pappadums. The movie was awesome, but I was not able to watch more than 5 min of it as the sound was so bad. The distorted and shrill sound was unbearable and I mentioned it during my next visit to the small shop. Observing the surprised face of the owner, I deducted not many people, mostly the local Indian community, ever complained to him about the quality. So when the Sales Director explained that the positioning would be premium to luxury, I was even more worried. Harley Davidson managed to enter the Indian market by building the motorbikes locally and limiting the high taxes associated with luxury goods (Derval, 2018). Distribution plans might have to turn into manufacturing plans. When I enquired what would justify the luxury positioning, the R&D manager present pinpointed to the audio fidelity. I was thinking, wait: The same customers who do not mind listening to distorted movie recordings would invest in luxury headphones? That did not sound like music to my ears. Of course, a bunch of wealthy customers could afford the cost but they might be more impressed by golden luxury accessories than by high fidelity.

3.1.2 Matchmaking and Mapping Priority Markets To the question of, why India, the answer was not totally clear. The Sales Director mentioned that the country was vast and emerging, which are both true. On the other hand, if the product targets wealthy customers, an equivalent group might be found in a smaller country. The real question is which personas would appreciate the product enough and why pay a premium for it. An extensive research study we did on the perception of music and sound, unveiled how some people hear four times louder than others. At the other end of the hearing spectrum, some people’s ears do not amplify bass enough and they have to rely on devices to get the job done. A proper risk management and opportunity study led us to first assess the local perception of sound. With huge differences between provinces, the overall configuration in India was that customers need to add extra bass.

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Fig. 3.1  Hearing patterns (Courtesy of DervalResearch)

In the ears, people have their very own equalizer. Some will amplify bass too well, while others will struggle to hear a conversation properly, as they hear voice less well than low or high-pitch sounds (Fig.  3.1) (Derval, 2022). Product innovation is like matchmaking, we need to pair a product with a persona. People will not change so much but we can find different people in other geographical areas. Products can be changed but the expected gains have to be carefully assessed. In that case, the ideal product would have been audio products with extra bass, rather than high fidelity. After discussions, it appeared that the brand was not able to adapt its products for the local market, which is always a missed opportunity. The decision was therefore made (a) to focus first on more profitable markets with a higher proportion of personas who would value the pure sound, and (b) to add to the innovation roadmap a new sound spin-­off to be better prepared for the Indian market, among others. The quick wins helped finance the required R&D and branding adjustments. One has to move fast though, as some local players like BoAt know their market. Rather than commercializing consumer electronics, BoAt built a lifestyle brand starting with best-selling bassheads earphones and other must-have gadgets. Sameer Mehta and Aman Gupta managed to

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build the number 1 earwear brand in India focusing on consumer needs, desires, and behavior (Dutta & Banerjee, 2022). They understood the need for extra bass. Leveraging the love for Bollywood and Cricket, they used the right ambassadors and channels to make BoAt a household name. Their Rockerz model is even being promoted by virtual ambassador Kyra. The company is funded by an American equity firm and in an IPO process, so there will be some pressure to maintain and increase margins. BoAt Bassheads earbuds certainly sealed the brand’s success, now also expanding to the health wearables category (BoAt, 2022). Mapping priority markets requires to: –– Find relevant indicators based on the product category: For BoAt, the need for extra bass and the good enough/affordable approach –– Then find quantification sources (sales, report) often from a different field to help seize the customer segments: If we want to know how many people have pets, we might want to check veterinarians’ data –– Code of conduct, corruption, wars, all risks, and geopolitical aspects have to be checked too, not just expected gains. In the Harley case, the luxury taxes needed to be taken into account in the production strategy

3.1.3 Inspiration for Innovation The only way to get powerful insights is to travel in space and/or time. Teams can look at ancient civilizations, other civilizations from various regions, other industries, and of course at nature  (Fig. 3.2). Nature includes fauna, flora, people, bacteria, all living things. In some cases, science fiction is a great source of inspiration, like Alexa that mimicked the slightly annoying Computer of Star Trek. If we consider shopping, for instance, science fiction can bring us Alexa, as mentioned. By the way, Alexa can really be activated with the word “Computer.” Ancient civilizations can bring us proximity gardens in big cities. Yes, even in societies with sophisticated shopping mall systems, people had the common sense to still plant some food in their own gardens. Other civilizations can inspire us with street vendors, home sales, or drone

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Fig. 3.2  Sources of inspiration (Courtesy of DervalResearch)

deliveries (depending on one’s own civilization). And other industries can inspire us with raffles to win gifts, or, for a brand like LEGO, with bricks sold by weight—following a pricing strategy usually adopted by secondhand books stores, or fruits and vegetables markets. All sources of inspiration were at some point based on the observation of nature, including the observation of people, aka anthropology. Nature and biosciences are therefore very powerful sources of inspiration and reliable innovation tools.

3.2 Risk Management in Product Development: Mobile Phones Products pose an additional risk as they need to be manufactured, stored, and recycled.

3.2.1 Outsourcing vs. Insourcing: Micromax The story of Micromax is quite extraordinary. Indian entrepreneurs observing people queueing at a truck to charge their phone, due to unreliable electricity at home, had the idea to create a long battery. Nokia was

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the market leader at that time and of course, all players would have loved to increase the battery lifetime. Micromax went for the simple solution: Making the phone bigger. The autonomy of the clunky device went from 2 days to 30 days and the sales over the roof. Micromax became the bestselling phone in India. Observing people around them, they came up with two more major innovations, one local inspired by a painter complaining about clients not respecting their oral agreement—the phone call recording—and the second one that has been adopted globally since then: The dual SIM. The idea came from managers owning several phones to use multiple SIM cards to save on communications. The smart observation is that not all people can afford multiple phones so let us allow multiple cards. Unfortunately, the brand was not able to properly manage the introduction of 4G. The operator Jio made a hit when it decided to offer free data with 4G subscriptions. Mukesh Ambani, who launched Jio, is the richest man in India with 15,000 shops selling, in no particular order, food and smartphones (Madhok, 2022). One-fourth of the revenues of his Reliance Holding are generated by the family petrol business. Their 27-story mansion in Mumbai and lavish lifestyle have triggered much criticism and some were almost relieved when Adani, another energy mogul, snatched away the richest man of India’s title (Loh, 2022). The issue for Micromax was that out of their 30 device models, none was 4G ready and their Chinese suppliers were not able to adjust one phone in small quantities, as they do mass production. Micromax missed the 4G train. The brand failed to create a sustainable business. Insourcing production at some point could have been a good idea, on top of creating jobs locally. Better collaboration and planning between Jio and Micromax would probably also have benefited the whole country’s economy, knowing that now two-thirds of the mobile phone market is ruled by Chinese brands. Micromax is betting on the Made in India label, but in the meantime market leaders including Xiaomi are manufacturing smartphones at newly built Indian production sites (Presthitha & Goswami, 2021). As the Chinese also have a “good enough” culture, they are fierce competitors to outsmart.

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Outsourcing is a tempting cost-reduction avenue but the impact of different strategies on product innovation needs to be carefully assessed. A study conducted on the UK furniture market showed that outsourcing peripheral functions, while welcoming external collaborations, and retaining core functions produced the best results on product innovation success (Readman, 2021). The best example of silly outsourcing is customer service. I am well aware that the task requires special teams, processes, training, and tools. But still, customer service or support is often a main, if not the only, point of contact with the customer, providing a wealth of information on behavior and preferences, that should fuel the innovation roadmap. The components of an innovation strategy should therefore document the maturity, resources, drivers, type, level, impact, collaboration, and place, as well as the risks associated with the innovations (Kral & Janoskova, 2021).

3.2.2 Quality Management and Solving the Right Problems During the product innovation design process, a lot of knowledge is required: Domain knowledge, innovative approaches that can be used, an understanding of the scientific effects and impacts, a grasp of the principles of invention, together with structural and functional knowledge (Zhang et al., 2021). From my observation, firms do a good job at solving problems. The minor issue is that the selected solutions tend to create new problems. The major issue is that very often the problem that was being solved was not the real problem (ouch!). This construction equipment and vehicle maker was running satisfaction surveys to find out why big contracts were going to the competition. Repeatedly the answer was price and quality. Until we investigated the profile of the buyer’s persona and found a mismatch with some of the key account managers’ profiles. Hiring an additional and different sales persona helped gain most of the deals back without changing the price or the quality. That was never the real problem.

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An extensive review of research conducted on innovation and market performance indicates that quality management could encourage companies to undertake product or process innovations, either incremental or disruptive. Innovations then increase the market and financial performance (García-Fernández et al., 2022). The hypothesis developed is that quality management by minimizing errors helps adjust the products and frees some cash to invest in innovation that will improve sales. I would add that quality management, if done well (otherwise it might just turn into another administrative nightmare), should make the teams reflect deeply on the observed issues, rather than just measure them, and then devise new solutions. This more customer-­ focused and employees-involving quality process is often encountered under the label Total Quality Management (Lim et al., 2022). In a quest to identify quality issues some retailers had with a brand of biscuits, we found out that consumers would not like that the corners of the wanna-be square treat would often be broken. The occurrences represented maybe 3% of the chocolate treats but for some foodies, it was enough to turn them off. A visit and observation at the factory helped us identify three bottlenecks: Some corners were missed when cutting the shapes, some were breaking while the cookies were making a 2-m free fall to reach the packing station, and some “tough cookie” corners did not survive the rough handling of the teams throwing the packs on the palettes. Of course, the company can simply correct the process in these three impact points— it is already brilliant when they know where things are going wrong. Innovation really kicked in though when we started wondering why some of the consumers were a bit borderline OCD and could not take cookies with missing corners: Did they associate it with a general lack of care that made them raise other food safety concerns? And in the end, would they not, for instance, prefer perfectly round cookies over crooked square ones?

3.2.3 Risk Management and International Expansion In a context of rampant corruption in organizational and governmental bodies, company products are a too easy target. A study in India showed that, in an interesting twist, firms tend therefore to put their efforts into

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marketing and process innovation instead of product innovation (Mohammad & Husted, 2021). An investigation on the role of political instability in Sub-Saharan countries established the unsurprising fact that political turmoils are bad for product innovation, but also that being a strong exporter is a mitigation plan of choice. Exporting accelerates the firm’s learning curve and innovation skills (Krammer & Kafouros, 2022). I noticed that many brands, very successful in their own market, only fully understood why things were working so well once they tried to sell in other markets. This eCommerce website would sell transparent iPhone covers like hotcakes in China, where many people would own a golden iPhone and want to protect it and show it off, at the same time. While in Germany for instance, where people would own a black iPhone and love to look at its sleek surface, a protective transparent sheet to cover the screen would be more popular. Analyzing these various needs helped understand foreign markets as well as some types of customers in the “familiar” market, for a more successful innovation strategy and selection of the priority markets. The fact is that innovative firms, even small, are more likely to expand internationally. This is because they own a piece of a certain knowledge, savoir-faire, or technology (Ramos-Hidalgo et  al., 2022). Why would one contract with a company in another time zone if a local player can do the job for the same budget? This is even more true if there is no shipping involved. Product innovation and R&D investments are at the heart of expansion strategies and a key driver is also to prevent others from replicating an invention. The Devialet inside approach, where the innovative sound chip is embedded in Huawei devices to cite a few, is a great example of a strategy allowing the French brand to simultaneously make its mark in the automotive and mobile markets, covering large territories.

3.3 Thinking by Analogy: Bosch Innovating is easy, with the right way of thinking.

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3.3.1 Sensors and Smart Laundry Thinking by analogy is a powerful tool for innovation. It is about transposing an existing concept to a new context. The sources of inspiration can come from a different geographical region, a past civilization, another industry, or nature. People who tend to store information with its context will be naturals, and others who organize their thoughts into neat categories might need some legal substances to relax and lower the barriers built in their brains. If Robert Bosch started his business in the automotive industry, very quickly he ventured into heating—maybe the influence of his Stuttgart neighbor Alfred Kärcher (we will study in Chap. 4)? The acquisition of American Junkers & Co, inventor of the wall-mounted gas-fired water heater and gasiator (= gas radiator), combined with the recently invented secure gas switch, put Bosch at the forefront of domestic appliances (Bosch, 2022). Today, having an apartment equipped with “a Bosch kitchen” is a definite plus point. Before going too deep into the analogy, clarifying the function is critical. Is the washing machine being used to remove stains, or to remove odors, or to sanitize? Depending on the answer, the brand might want to look in different directions. If the detergent market was very competitive, the washing machine category is fighting hard on who will use less electricity or less water. Players like TCL are introducing an ion soft drying technology, while Samsung is using AI to evaluate how dirty the load is and how much water should be used (Ikoba, 2022). The proper use of resources is key. For freshening up clothes and removing odors, Bosch already offers a portable device using the power of UV light. The process can be fine-tuned by looking at other categories, like some ingenious toilets recycling the water used to wash the hands to flush. Inspired by commercial laundry practices, Bosch has been the first to include an ActiveOxygen option in consumer appliances. The machine mists ozone on the laundry that then gets dissolved in the water, removing bacteria and sanitizing the garments on the way out. If the process adds a 30 mn to the cycle, it works already at 20 °C, removing the need for hot water and detergent (Redsea, 2022).

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We designed an innovation by analogy framework inspired by the Pinnacle Matrix (Beermann & Chen Austin, 2021). Applied to our smart laundry case, it can help generate disruptive or very silly ideas—I let you be the judge of it. Cats could be an inspiration as, on their own, they would rather lick themselves than take a bath or do laundry (Fig. 3.3). Maybe some handheld cleaning device can mimic their process. In terms of form, considering the valet—used to hang shirts—could open an interesting vertical hanging washing process. Regarding materials, a real pain with washing machines is moving them, as they are way too heavy to lift. The popular Scrub Daddy sponge, also viral on TikTok, could be a source of inspiration for that matter (Barrientos, 2022; Scrub Daddy, 2022). The patented sponge, which slipped from 3 M hands as they failed to see the product’s potential, but seduced investors on Shark Tank, has generated so far a lifetime revenue of $300 M (Johnson, 2019). Scrub Daddy is believed to contain polycaprolactone, a thermoplastic, allowing the smiley sponge to move from a hard to a soft state when warmed (Kuntzleman, 2018). A material that would be lightweight when cold and heavy when warm would make

Fig. 3.3  Analogy map: Smart laundry (Courtesy of DervalResearch)

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washing machines much easier to lift. It sounds a bit delusional but given that radioactive mercury can turn into gold (do not try this at home though!), everything seems possible. Structure-wise, washing machines have not dramatically changed in past years, except maybe for the legendary Dyson contrarotator, with two half drums rotating in opposite directions for a wringing effect (Derval, 2018). The principle of spinning could be questioned further to unlock other innovations. The function should guide the ideation process and if the objective is to freshen or sanitize the laundry, a UV light bath might be a weapon of choice. Regarding resources, if a watermill can create its own energy, how come the washing machine with all this spinning still needs electricity? A lead to investigate. The process of cooking, and in particular steaming, can provide some insights as well. And finally looking at the byproduct, the waste, can help design smarter solutions. Like these sinks canalizing the used water to flush the toilets. We can imagine a washing machine built on a similar model.

3.3.2 Ancient and Modern Innovation Energy efficiency is a valid concern and the study of the House of Kashan shows how Persia was able to maintain balanced temperatures in the desert, with the right architecture relying on proper materials, orientation, colors, and a smart way to capture the cooler night breeze and make the most of it during the boiling day (Jamshidi et al., 2011). More often than not, when a groundbreaking “modern times” innovation is announced with much media coverage, a quick search reveals that the same thing was already done in ancient times. Yes, back then people were also eating ice cream in summer while gossiping. It is sad to observe that the ancient technologies were less polluting than the “modern” ones. Their fridge was a cave and it required zero electricity to store their ice cream. Portable computers, batteries, automatic doors, Cybertrucks, all existed already in ancient times (Alexander, 2020). Sometimes it is just too difficult for historians and archeologists to admit it.

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The Antikythera mechanism, for instance, discovered on the eponymous island near Creta, revealed to be a 2200+ years old portable analog computer made of bronze and capable of replicating the movement of the stars in the sky. Another ancient invention discovered near Baghdad and baffling engineers is the Parthian Battery: A jar made of clay, containing an iron rod and a copper cylinder that would produce 1 V of electricity once an acid substance like vinegar would be poured into it. What were our ancient fellows doing with this battery? Probably charging their ancient Cybertruck. What is certain is that sketches of an armored car, able to move in all directions, were found among the many prototypes invented by Leonardo Da Vinci. For sure the mechanisms of the inventions could all be perfected but the idea was there. Even for automatic doors. The ancient invention was hydraulic. Once heated by fire, brass vessels would pump water and the associated weight would push the doors. For patient shopping mall visitors only, as it would take a couple of hours to open. Golden artifacts age better. This must be the reason why, when we visit the Museum of Quai Branly in Paris—celebrating indigenous arts and cultures from around the world—we get the sense that people have always been greedy gold diggers. We can bet that many ancient inventions made of less “noble” materials went missing or have just been misinterpreted so far. The documented ones constitute a great source of inspiration. Getting inspiration from ancient innovations often equals getting inspiration from nature, as all the brilliant inventors were observing and learning from their surroundings.

3.3.3 Biomimicry and Nature-Inspired Innovations Gaudi’s visionary architecture Sagrada Familia in Barcelona shows how bio-inspired practices can contribute to sustainable innovations and human well-being, as they integrate better into nature, even visually (Ramzy, 2022). The importance of teaching biomimicry in science classes is acknowledged but could be broadened to other disciplines including business (Dawson & Winks, 2021). Biomimicry is about emulating design and

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mechanisms found in nature to solve challenges. Considering the causes and effects is mandatory in order not to make things worse. This thinking in systems consists in identifying patterns in nature, deciding whether they apply to a given context, and then translating them into a solution (Stevens et al., 2021). In the field of construction, nature-inspired composites such as bacteria-­enhanced materials or facade systems offer excellent mechanical and structural properties (Ahamed et  al., 2022). The way things look (form), their texture (material), their structure (construction), their inputs and outputs (process), and the way they work (function) can be bio-inspired. Consistently, design found in nature is good at being multipurpose with the example of a tree that can offer shade, cool water underneath, and help us breathe (Karmarkar, 2021). Man-made design struggles a bit more, and once an innovation is thought to be perfect and replaces something natural, very quickly side effects appear and missing features become obvious. Biomimicry therefore requires a holistic and systemic approach, where all impacts and interrelations are carefully assessed. Nature-Inspired Innovations (NII) and Sustainable-Oriented Innovations (SOI) emerge and encompass approaches like biomimicry, biomimetics (more focused on radical technological innovations), cradle-­ to-­cradle design, circular economy, and industrial ecology (Mead et al., 2022). Particular attention is given to sustainability in the construction sector due to its resource and emissions-heavy nature. In fast-growing countries like Panama, where the population is expected to triple within the next 30 years, it is a must. Sources of inspiration in nature can take various forms. Meerkats avoid conflicts by taking turns in leadership— this reminds me of late Czechoslovakia that would elect a Czech then a Slovak President and so on, until both groups decided to separate. Bees, as a further example, master the art of storing a maximum of honey with the minimum vital structure made of wax (Beermann & Chen Austin, 2021). Biomimicry can shed a new light on Environmental, Social, and Governance (ESG) goals.

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In an ideal fashion world, garments would be made of building blocks (fabrics, materials) that would easily decompose back into basic building blocks and so on (Biomimicry Institute, 2021). Recent cases showed that sometimes recycling clothes was less efficient than creating new clothes from scratch as most of the pollution comes from cleaning, dying, and of course transportation. A legendary example of biomimicry is how Leonardo Da Vinci (him again!) emulated birds flying to design the first flying machine. Most heating systems found in buildings rely on good insulation to prevent heat loss and were originally inspired by animals like polar bears. Such endotherm creatures are able to keep their metabolism at a certain temperature thanks to layers of fat and fur (Jamei & Vrcelj, 2021). If like me you are often freezing—in spite of more or less generous layers of fat and fur—note that ectotherm beasts rely on external sources of heating and their temperature will greatly fluctuate depending on the weather and environment. Biomimicry can be a source of innovation at many levels: For Net-­ Zero Optimization with more efficient heating systems, for societal transformation with the meerkats’ governance system, and for biosynergy. Even though I am afraid that most human groups who lived in harmony with nature have long been decimated, maybe we can still learn from the last ones standing (Ilieva et al., 2022).

3.4 Chapter Highlights –– Biomimicry, ancient inventions, as well as other industries, different civilizations, and even science fiction are as many great sources of inspiration –– The BoAt case provides an excellent example on how to identify profitable markets for a given product, like India for earphones with extra bass –– Thinking by analogy is an effective way to generate viable product innovation directions and accurately identify priority markets

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A video summary of the BoAt and Scrub Daddy cases are included in the complimentary Course Frontiers in Product Innovation Strategy that comes with the book: https://sn.pub/RcnzV5. The 35mn Espresso course proposes a recap of all the chapters, a quiz, and a certificate.

References Ahamed, M. K., Wang, H., & Hazell, P. J. (2022). From biology to biomimicry: Using nature to build better structures – A review. Construction and Building Materials, 320, 126195. Alexander, D. (2020, May 14). 7 ancient inventions that were way ahead of their time. Interesting Engineering | Technology, Science, Innovation News and Videos. https://interestingengineering.com/innovation/7-­ancient-­ inventions-­that-­were-­way-­ahead-­of-­their-­time Barrientos, S. (2022, February 5). ‘Shark tank’ TikTok agrees this $4 product Lori Greiner invested in is the best thing ever. Good Housekeeping. https:// www.goodhousekeeping.com/life/entertainment/a38971064/shark-­ tank-­products-­scrub-­daddy-­sponge-­tiktok-­reaction/ Beermann, K., & Chen Austin, M. (2021). An inspection of the life cycle of sustainable construction projects: Towards a biomimicry-based road map integrating circular economy. Biomimetics, 6(4), 67. Biomimicry Institute. (2021). The nature of fashion: Moving towards a regenerative system. BoAt. (2022). boAt lifestyle. https://www.boat-­lifestyle.com/ Bosch. (2022, August 8). History of bosch: Thermotechnology. Bosch Global. https://www.bosch.com/stories/history-­of-­thermotechnology-­at-­bosch/ Dawson, R., & Winks, L. (2021). Biomimicry – A nature-based approach to designing sustainable futures. School Science Review, 102(381), 43–47. Derval, D. (2018). Designing luxury brands: The science of pleasing customers’ senses. Springer. https://link.springer.com/book/10.1007/978-­3-­319-­71557-­5 Derval, D. (2022). The right sensory mix: Decoding customers’ behavior and preferences (2nd ed.). Springer. https://link.springer.com/book/10.1007/ 978-­3-­662-­63795-­1 Dutta, P., & Banerjee, A. (2022, May 18). Boat success story  – Founders | Business model | Revenue model | Funding. StartupTalky. https://startuptalky. com/boat-­success-­story/

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García-Fernández, M., Claver-Cortés, E., & Tarí, J.  J. (2022). Relationships between quality management, innovation and performance: A literature systematic review. European Research on Management and Business Economics, 28(1), 100172. Ikoba, J. J. (2022, September 22). TCL Twin Cabin Q10 washing machine with ion soft drying launched for 6,999 yuan ($993). Gizmochina. https://www. gizmochina.com/2022/09/22/tcl-­t win-­c abin-­q 10-­w ashing-­m achine-­ ion-­soft-­drying-­launched/ Ilieva, L., Ursano, I., Traista, L., Hoffmann, B., & Dahy, H. (2022). Biomimicry as a sustainable design methodology – Introducing the ‘biomimicry for sustainability’ framework. Biomimetics, 7(2), 37. Jamei, E., & Vrcelj, Z. (2021). Biomimicry and the built environment, learning from nature’s solutions. Applied Sciences, 11(16), 7514. Jamshidi, M., Yazdanfar, N., & Nasri, M. (2011). Increasing of energy efficiency based on Persian ancient architectural patterns in desert regions (case study of traditional houses in Kashan). International Journal of Humanities and Social Science, 5(8), 984–989. Johnson, H. (2019, February 8). Scrub Daddy: The story behind shark tank us’s biggest success. The CEO Magazine. https://theceomagazine.com/business/ innovation-­t echnology/scrub-­d addy-­t he-­s tory-­b ehind-­s hark-­t ank-­u ss-­ biggest-­success Karmarkar, P. (2021). Biomimicry: Studying natural systems for achieving sustainability. International Journal of Modern Agriculture, 10(2), 50–62. Kral, P., & Janoskova, K. (2021). Key attributes of successful innovation strategy in the global market. In SHS web of conferences (Vol. 92, p.  04016). EDP Sciences. Krammer, S. M., & Kafouros, M. I. (2022). Facing the heat: Political instability and firm new product innovation in sub-Saharan Africa. Journal of Product Innovation Management. Kuntzleman, T. (2018, March 1). Scrub Daddy science. Chemical Education Xchange. https://www.chemedx.org/blog/scrub-­daddy-­science Lim, W. M., Ciasullo, M. V., Douglas, A., & Kumar, S. (2022). Environmental social governance (ESG) and total quality management (TQM): A multi-­ study meta-systematic review. Total Quality Management & Business Excellence, 1–23. Loh, M. (2022, August 3). The business empires of Asia’s 2 richest men may soon be on course for a Titanic collision. Here’s how the tycoons’ wealth, businesses, and properties stack up. Business Insider. https://www.businessinsider.com/asia-­richest-­men-­wealth-­businesses-­assets-­asia-­comparison-­2022-­8

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Madhok, D. (2022, August 30). Mukesh Ambani prepares to hand a $220 billion empire to his children | CNN business. CNN. https://www.cnn. com/2022/08/30/business/mukesh-­ambani-­reliance-­succession-­plan-­india-­ hnk-­intl/index.html Mead, T., Jeanrenaud, S., & Bessant, J. (2022). Sustainability oriented innovation narratives: Learning from nature inspired innovation. Journal of Cleaner Production, 344, 130980. Mohammad, S., & Husted, B. W. (2021). Innovation, new ventures, and corruption: Evidence from India. Journal of Business Venturing Insights, 16, e00256. Presthitha, H., & Goswami, C. (2021, September 1). Xiaomi success story – Xiaomi founder, history, funding, revenue, business model, growth. StartupTalky. https://startuptalky.com/xiaomi-­success-­story/ Ramos-Hidalgo, E., Edeh, J. N., & Acedo, F. J. (2022). Innovation adaptation and post-entry growth in international new ventures. European Research on Management and Business Economics, 28(1), 100169. Ramzy, N. S. (2022). Beyond sustainability, design for well-being: Gaudí’s monument to nature, biomimetic functions with biophilic morphology. Journal of Architectural Engineering, 28(1), 05021016. Readman, J. (2021). The application of an outsourcing-innovation model. Available at SSRN 3995635. Redsea. (2022). Bosch active oxygen technology – Explained. https://redsea.com/ en/bosch-­active-­oxygen-­technology-­explained Scrub Daddy. (2022). About us. Scrub Daddy  – America’s Favorite Sponge. https://scrubdaddy.com/about/ Stevens, L., Kopnina, H., Mulder, K., & de Vries, M. J. (2021). Analogies in biomimicry. Design-Based Concept Learning in Science and Technology Education, 248–281. Zhang, K., Guo, X., Yu, M., & Chen, L. (2021). Product innovation design process model based on knowledge service. Journal of Physics: Conference Series, 1820(1), 012051. IOP Publishing.

4 Defining Sustainable Growth Strategies

In this chapter, we investigate through the bikes and the idol cases, sustainable growth strategies that customers will want to adhere to. We explore with centenarian brand De L’Europe and hidden champion Kärcher how to harness Adaptive Management in order to achieve the best results.

4.1 Real Potential: The Bike Case 4.1.1 Expected Gains and the 5% Rule I was giving this innovation workshop in Amsterdam and a founder came by to discuss her entrepreneurial venture: A cover for a bike saddle. A member of the board at a leading fashion group, super savvy with numbers, and with a strong business acumen, she managed to launch this start-up as a side project but wanted to boost it before handing it over. Also, she was French. Nothing wrong here but this detail might reveal useful later in the story. The context was ideal. It is (almost) always raining in Amsterdam, there are bikes everywhere, and nobody would doubt that a saddle cover protecting from the rain would be a great idea. The cover can be left on © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 D. Derval, Frontiers in Product Innovation Strategy, Business Guides on the Go, https://doi.org/10.1007/978-3-031-25823-7_4

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the bike and removed before usage or put on before starting the ride. Thanks to a good network, the production cost was under control and the bike accessories were naturally distributed in bike shops for $5, hanging on the wall with a shape that left no doubt in shoppers’ mind on what it was intended for. The city is rainy, full of bikes, the accessory is available in the logical shop, yet the sales were not that great. Not bad, but not as good as expected. I computed that in between the different juries I attended and lectures I gave, I must have read and reviewed over 1000 business plans. People have great ideas, weird color combinations, and the tendency to overestimate the size of the real market. To the defense of innovators and entrepreneurs, there are some arbitrary rules going on like “In the booming market of [insert a hype industry] evaluated at [insert some billions here], we expect to target the [insert some millions here] customers, and our conservative estimate is that we can convert 5% of them.” Still not sure where this 5% comes from—if you know please poke me! What is sure is that we have a broad unqualified market, here the bikers, and then a coming-out-of-nowhere-5% conversion rate. I would say, if some personas are in the target, then all will get converted, except maybe those on holiday or bound with another contract.

4.1.2 Real Market and Pivoting to Profitable Channels Thinking of the concept, I pictured something was not quite right here. I lived in Amsterdam and Shanghai, both cities know heavy rain, and count many bikes. Visualizing bikers in the rain, everything became clear. In Shanghai, the whole bike and the biker would be covered by waterproof protection with a little transparent window to see the road. In the Netherlands, a few bikers would use an umbrella, but most people just ride in the rain, without any hat or special protection. It is not as if they did not know it would be raining: it is raining every (other) day. The colossal difference is that people in the Netherlands do not mind being wet as much as people in China. The French would probably not even

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take the bike on a rainy day to start with. Our real market was not people biking but people biking and who mind having a wet ass. I hate raining on people’s parade, but the bad news came with some good news: There was room for pivoting toward more profitable channels by changing target personas. Unless one is collecting tulip bulbs, it is not easy to bring back a souvenir from Amsterdam that is legal and does not smell of cheese. Tourist shops and department stores would be an excellent channel for tourists looking for a cheap and fun gift, in the spirit of a pet rock. Very quickly, new designs featuring Delft Blue, wooden shoes, and other Dutch landmarks were referenced by department stores for their tourist corner and the sales skyrocketed facilitating a smooth buy-­ out of the innovative start-up. People are not wired in the same way. And even with the same data in entry, the way the data is stored and accessed will lead to different outputs. Some brains are organized by categories, while others contain all data in no particular order, they are just indexed to each other like a mindmap. This is because when forming memories and storing information, oxytocin filters (or not) the input coming from the pyramidal neurons (we mentioned in Chap. 1) and interneurons (Eichenbaum, 2014; Grinevich & Stoop, 2018). When data is stored with its context and all is linked, it is much easier to think by analogy and find unexpected business associations (indexed or * brain type in Fig. 4.1). Leaders who are thinking in a more sequential way (sequential or | | brain type in Fig. 4.1)—which is also great as it allows for fast and powerful analysis—will struggle to think outside the

Fig. 4.1  Sequential (| |), sequential-indexed (H), and indexed (*) brain types (Courtesy of DervalResearch)

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box and benefit from surrounding themselves with different types of thinkers. People using a hybrid way of storing data (sequential-indexed or H brain type in Fig.  4.1), with both categories and indexes, facilitate communication between people with different brain types (Derval & Bremer, 2012). Very social people (=high in oxytocin) that are also gifted with a photographic memory might therefore be difficult to find—some food for thought for future recruitment campaigns.

4.1.3 Measuring the Return on Innovation Investment It is critical but not easy to measure the return on innovation investment, also called R2I or ROI2—for all the acronym fetishes out there. Most studies are limited to patent count and R&D budget evaluation rather than looking at the outcome in terms of new product introductions and marketing innovation. In the pharmaceutical industry, new drug introductions boost long-term revenues while product and marketing innovation, often in the form of additional packs of an existing drug, contribute to increased revenues in the short term. In the strong OTC (over-the-­ counter) or self-medication UK scene, the pack variety comes from the number of pills per pack and the strength (in MG) of the active ingredient. It seemed though that the growth from a leading drug category could be annihilated by the poor results of a different drug category (Bokhari et  al., 2021). Multiple SKUs are not synonymous with added value, and brands should take new pack opportunities to market swallowable pills, as most present terrible dimensions and taste. We did this research about the fever medicine Fervex, a lemon-tasting powder. For super-­ tasters, with many taste buds, the product is undrinkable in cold water— unlike what is recommended on the packaging—and needs hot water to mitigate the taste. At least powder solved the size of the pill dilemma. Disruptive innovation might help achieve sustainability goals. Technological and social innovations are powerful enablers and changes in ownership (car-sharing platforms) and actors (stakeholders vs. shareholders) can revolutionize a market (Kivimaa et al., 2021). Most entrepreneurs I met with a platform project though, consisting in connecting customers with suppliers and taking a big margin on the way, seemed

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solely driven by growth and profits. Some made the effort to devise a heartfelt background story but meh, that was not very convincing. A comparison between platform companies and their linear counterparts shows that the newcomers are indeed less preoccupied with sustainability, and I would add seem to mind less modern slavery, for some (Mezinova et al., 2022). The challenge is to redefine the game, on a given market, while planning a fair share of revenues so that the whole ecosystem can last, in a healthy way.

4.2 Centenarian Brands: De L’Europe We can learn a lot from centenarian brands like De L’Europe, in Amsterdam.

4.2.1 The Secret to Brand Longevity Hotel De L’Europe just celebrated its 125th anniversary, but probably out of vanity, tempered a bit with its age. In 1638 already, travelers could rest at “Het Rondeel”, the ancestor of the luxury hotel (De L’Europe, 2022). I was eager to learn the secret to keeping a centenarian brand like De L’Europe Amsterdam trendy and Managing Director Robert-Jan Woltering accepted to share his strategy for the prestigious Amsterdam landmark: “We believe that genius is the ability to win by constantly changing yourself. Over the last 180 years, this building has served a hospitable purpose, but it was able to really claim its place in the heart of the city by changing with the times. The luxury traveler is changing, and we strive to serve the traveler.” With the two Michelin star restaurant Flore and the most amazing sundeck of the city, overhanging the Amstel river, De L’Europe knows what product innovation means in the hospitality industry: “The definition of five-star luxury changes along with the guests it serves to. With the last few years turning the world upside-down, we felt the needs of our guests change, wanting to explore what our city has to offer without having to leave the premises. As one of the oldest establishments in Amsterdam, one that guests know and love, innovation was intimidating,

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but exactly that was needed to retain our place at the very top of the line. Now we are so much more than a hotel. As a lifestyle brand, we invite not only overnight guests, but also locals to enjoy our bars, our restaurants, and our atmosphere. This fusion is a template for the future of hospitality.” In addition to being in constant movement, and building a lifestyle brand centered on distinct experiences, De L’Europe is strengthening its ecosystem, federating Amsterdam stakeholders, and making local artists and entrepreneurs feel at home: “In March 2020, De L’Europe opened the doors of ‘t Huys. A renovated wing of the hotel with its own entrance. Here Amsterdam icons of luxury, art, and design reside, and the very essence of the city abounds.” Robert-Jan Woltering highlights how ‘t Huys is turning into a cultural hotspot: “We invite both hotel guests and locals to experience this one-of-a-kind cultural hub. ‘T Huys boasts unique luxurious suites, each eclectic and decorated with a curated selection of one-of-a-kind vintage and designer furniture, lighting, and art sourced from far and wide. Guests step into the distinctive world of our original Amsterdam luxury brands, when staying in one of their suites.” Art lovers can admire a Rembrandt painting replica on the Promenade, among other chef-d’oeuvres, if they do not have the time to visit the Museum Quarter at walking distance (Figs. 4.2, 4.3, 4.4, and 4.5). Tourism comes with its share of innovations, like “destination design” and to that extent, De L’Europe is certainly contributing to Amsterdam’s shine and attractiveness (Scuttari et  al., 2021). Winner of the Condé Nast Traveler Readers’ Choice Award in 2022 for Northern Europe, De L’Europe is saluted with a magnificent overall score of 98.3/100 as “a classic hotel in an unmatched location that still offers a few surprises” (Condé Nast Traveler, 2022). The product portfolio is indeed carefully curated to work as stand-­ alone services while providing, when combined, an extra wow effect to their discerning guests: “De L’Europe Amsterdam is the home for the lover of the true and beautiful, a place where local culture and craftsmanship and ultra-luxury hospitality genuinely live. With high-end luxurious comfort and an extensive range of culinary adventures for guests to explore, De L’Europe understands the importance of synergy. Each component of the formula is strong on its own, but when they come together, they truly become the ultimate unique five-star luxury experience.”

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Fig. 4.2  De L’Europe (Courtesy of De L’Europe)

Fig. 4.3  De L’Europe Loft (Courtesy of De L’Europe)

A video summary of the De L’Europe case together with their festive luxury trailer is included in the complimentary Course Frontiers in Product Innovation Strategy that comes with the book: https://sn.pub/ RcnzV5. The 35mn Espresso course offers a recap for each chapter.

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Fig. 4.4  De L’Europe ‘t Huys Deluxe Suite (Courtesy of De L’Europe)

Fig. 4.5  De L’Europe MENDO (Courtesy of De L’Europe)

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The secrets of centenarian brands like De L’Europe—we can also spot when observing Nintendo, Harley, or LV—are innovation, flexibility, and the ability to positively contribute to their ecosystems. Centenarian brands share many similar traits with Hidden Champions.

4.2.2 Hidden Champions and Niche Markets A study took a closer look at Hidden Champions in Germany, and these are mostly family businesses targeting a niche market. What characterizes Hidden Champions is their specialization in complex products, that are very R&D consuming, their regional ties, economic independence, ability to adapt, and long-term collaborating customers. The companies are a bit hidden as they do not participate in the patent races and do not have to constantly justify themselves in front of shareholders. The customer-­ centric R&D that represents on average 5% of the firm revenues has nothing to envy to global innovative companies who re-invest 4.5% (Schenkenhofer, 2022). The household names include Braun, Faber-Castell, Bosch, Grohe, Stabilo, Sennheiser, Montblanc, and Kärcher, and are recognized in their field and known for being innovative. Irene Kärcher revolutionized the cleaning market when she launched the first hot water pressure equipment for consumers—she had taken over the business after her inventor husband Alfred passed (Kärcher, 2022a). The family business based in Winnenden, near Stuttgart, and now chaired by the son and daughter, created a whole new market and their yellow trademark color is well associated with the innovative water-­ pressure gears (Kärcher Futuretech, 2022). Concerned, from inception, with environmental and social impact, the firm started recycling and reusing the water at the production site, designing smart water purification systems by osmosis, later marketed via their Kärcher Futuretech subsidiary. Their mobile water treatment plants were first successfully deployed in the USA during the great floods of 1993 and in Turkey during the 1999 earthquake (Kärcher Futuretech, 2022). Kärcher also smartly ventured into the much-needed solar panel cleaning business (Kärcher, 2022b).

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4.2.3 Fast-Moving Companies and Adaptive Management The secret of long-lasting but also fast-moving companies is Adaptive Management. Adaptive Management is about doing business on-the-go, learning and adjusting the course of actions live. Adaptive Management is widely practiced in Asia, where managers are known for changing their minds several times a day—I discovered that when my team in Shanghai told me I was a typical Chinese laoban 老板 (boss) for changing paths as we walk. Adaptive Management would be comparable to navigating with a GPS device, adjusting the path based on the traffic and weather input, rather than planning the route beforehand and sticking to it no matter what. The analysis of 303 Chinese firms explains how an entrepreneurial mindset translates into both a higher learning orientation and a stronger coordination flexibility to positively influence product innovation (Han & Zhang, 2021). While in China flexibility is key, in Nigeria many leaders consider product innovation as a performance driver, with or without strategic improvisation. A possible explanation could be that the Northeastern region of the country, concerned by the study, offers a less flexible business environment, driven by manufacturers (Abubakar et al., 2021). More present in certain geographical areas, or industries, Adaptive Management has also seduced public companies and state agencies like NASA.  Public innovations can be categorized into eccentric, discrete, flat, and transformative innovations (Valdivieso et al., 2021). NASA is certainly at the forefront of transformative innovation, as their technology and Earth observations are not only redefining meteorology but also farming. Companies who have to deal with uncertainty benefit greatly from Adaptive Management, as instead of waiting until all becomes clear—which might never happen or take so long that they would miss all opportunities in the market—they just start walking and evaluate and adjust their actions on-the-go (Wysocki, 2010,  Webb et  al., 2018). Thinking while doing. NASA shares, in their Earth Science Applications Guidebook, definitions that help understand the difference between Agile, some might be

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more familiar with, and Adaptive Management: “With comparatively less upfront planning,” Agile “focuses on short cycles of activity known as sprints. These are intended to deliver immediate results and point the way to next steps” while with Adaptive Management “project goals remain constant but the pathway to the goals evolves based on new information and changes in context” (NASA, 2022). Observing nature, as NASA does, and trying to explain phenomena with biosciences is a very powerful way to reduce uncertainty. This approach is not limited to space agencies, and organizations from any field can learn and adjust their innovation path with biomimicry and predictive biosciences. The idea is to learn to adapt and strive, to learn from nature to be sustainable, and to learn from biosciences how to decode and predict behaviors.

Fig. 4.6  Adaptive vs. traditional management (Courtesy of DervalResearch)

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If we compare Adaptive vs. Traditional Management, Adaptive Management can be associated with strong principles, the ability to grab opportunities, a way to grow organizations organically, the urge to predict behaviors, a certain focus on game-changers, and the willingness to understand customers (Fig. 4.6). The motto would be “Sure, let us try this” while taking measured risks. Traditional management can be associated with stiff governance, an obsession for goals and methods, plans, fast, transactions, details, competitors, and doing business as usual with a “We never did it before” attitude. In a product innovation context, usually full of uncertainties, transitioning to Adaptive Management would be the best option, if the company culture allows it.

4.3 Growth Hacking: BTS Korean Idols BTS provide an excellent example of building an empire using Adaptive Management and growth hacking.

4.3.1 Building a Strategy on the Go: Run BTS BTS is the best-selling musical act across platforms and countries as recorded by the International Federation of the Phonographic Industry (IFPI)—knowing that the total market is $25 billion (Aswad, 2022). Based on their contribution to their country’s GDP—in terms of music revenues as well as additional touristic revenues and aroused interest in Korean fashion and culture—BTS is a force to be reckoned with like Samsung, Kia, and Korean Air. This success story started, in appearance, like with any regular idols, recruiting some talents, and intensively training them in a camp. The genius idea of BTS and their management company HYBE was to not only film the band while they were training, what many shows like X-Factor or American Idol do, but also while they accomplished crazy challenges, in a cute Jackass style, in the “Run BTS” web mini-series.

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Run BTS has been streaming on Korean V live since 2015, with 150+ short episodes featuring body and mind challenges assorted with both prizes for the winning band member, such as gifts or barbeque supplies, and punishments for the losing band member—drinking garlic juice being a memorable one. Then behind the scenes videos are available on the Weverse platform against subscription, where BTS members interact with their fans for an hour or so, while having dinner and doing other daily activities. The endearing personalities of the talented band members are doing the rest. The band revenues come mostly from touring, $170 M in 2020, and “Muster,” special concerts for fans released on DVD and probably soon as NFTs. The occasional brand endorsement can reach $4.5 M per brand. The Bangtan Universe includes also digital comics “Hip Hop Monsters,” the BTS World mobile video game, and the recently released casual game BTS Island: In the SEOM. It is a mix between a Tamagotchi and a candy crush game, where players take care of BTS avatars who ended up stranded on an island and turn it into a luxury resort (Burt, 2022). HYBE merged with Justin Bieber, and Ariana Grande’s production company, becoming the biggest music empire. Their music rights and IP management has always been top notch and the Korean court rightfully ruled that celebrities’ images belonged to them and their managers. BTS logo—a stylized black door—and trademarks have been carefully registered across various categories from cosmetics to telecommunications. HYBE invested in AI technology specializing in Singing Voice Synthesis (SVS) and combined it with BTS digital twins—the TinyTANs—to let fans learn Korean and other languages to the reconstituted sound of BTS members’ voices. Ambient light sticks waved during concerts and paired with the music are part of the patentable items as well (Ribeiro, 2022). BTS members are songwriters too and master the art of storytelling. The purple 52 Hz-whale featured in their song, and the Island of SEOM casual game, is based on a scientific discovery. In the 80 s a whale emitting 52  Hz sounds had been spotted and as the usual range of whales stands slightly lower, between 10 and 40 Hz, it was called the loneliest whale on the planet as none of its peers can hear it. The metaphor has been used by BTS to illustrate misunderstood individuals and teens. BTS fans—called ARMY—have their own codes, including their color: Purple

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and more precisely #886ce4. The storytelling of the band is deep, creative, and more importantly perceived as very authentic, which helps with the growth strategy. BTS’s growth strategy made the most of traditional channels including live concerts and guest features, and new digital channels like the Metaverse and casual games, to entertain, convert, and stay engaged with multiple personas from reality TV lovers to gamers, beyond their loyal ARMY (Fig. 4.7).

Fig. 4.7  Growth hacking: BTS (Courtesy of DervalResearch)

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Often overlooked is the composition of the band itself, the chemistry, and the wide appeal. From a distance, it looks like seven good-looking chaps. A closer look and some physiological measurements revealed a great diversity among BTS members. Galen, physician to emperors and gladiators, and father of physiology already noticed that people tended to have different temperaments— being phlegmatic, sanguine, melancholic, or choleric. The personality traits were linked to an imbalance “in humors,” and humors revealed much later to be hormones, starting a new field of research called endocrinology (Derval, 2018). Prenatal hormones have widely been used to predict health predispositions and risk profiles (Geniole & Carré, 2018). More recently an impact on purchasing behavior and product preferences was also observed (Derval, 2022). Among the several ways of measuring prenatal hormones, the digit ratio technique—comparing the length between the index and the ring finger—is the least invasive (Manning, 2002). We performed measurements on many celebrity hand casts, including BTS handprints displayed in Seoul, and grouped them based on their Hormonal Quotient® (Derval & Bremer, 2012). JK, RM, and Suga present a very testosterone, V and Jin a testosterone, Jimin a balanced, and J Hope an estrogen Hormonal Quotient®. We measured similar hormonal diversity in other famous groups like the Spice Girls, or the actors from Ocean 11 (Derval & Bremer, 2012). No wonder these super bands appeal to a broader audience. If you are intrigued about how to measure this biomarker, you can get your right hand ready, and scan this QRcode (Fig. 4.8).

4.3.2 Growth Hacking and Bricolage Growth Hacking differs from traditional marketing as it focuses on growth and on delivering products to the right customers. That sounds like a funny definition as you would assume that this was the role of marketing. Like other coined approaches such as Guerrilla Marketing, Wait Marketing, or Frugal Innovation, Growth Hacking has the merit to try to achieve more with fewer resources. In-depth interviews with Iranian

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Fig. 4.8  Prenatal hormones biomarkers (Courtesy of DervalResearch)

start-up founders helped distinguish the different strategies they would implement at each stage of the Growth Hacking funnel (acquisition, activation, revenue, retention, and referral). If SEO and conversational marketing were accompanying the firm each step of the way, viral marketing was relied upon for retention and referral purposes only (Feiz et al., 2021). Growth Hacking is highlighting the importance of putting the right product in front of the right persona, what BTS did by multiplying channels to get or stay in touch with their audience. If the band established and maintained contact in a respectful and transparent way, some brands who do not understand their customers so well are prone to digital stalking. Ethical design in social media and Growth Hacking strategies becomes imperative (Saura et al., 2021). At a recent IEEE Conference on Digital Privacy and Social Media in San Jose, I was explaining how “advertising complicity”—the realization that social media platforms and brands are sharing private data to take advantage—is upsetting users and badly reflecting on the brand image (Ghanbarpour et al., 2022). Users will not hesitate to switch platforms at the first opportunity. Another interesting concept is Bricolage, which in French means do-­ it-­yourself. Bricolage is used to describe how low-income entrepreneurs, such as students, individuals located in struggling countries, and refugees manage to start and grow their businesses. Bricolage is a bit the pendant

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of Growth Hacking but at the early stage of the creation process (Baaken et al., 2021). Both are focused on understanding customers to deliver the best solution with limited resources.

4.3.3 Technology, Servitization, and Internal Innovation Being customer-centric is not that easy. Industries are still busy migrating from a product-centric to a service-centric approach—often called “servitization” -, and sometimes even adding branding to their repertoire. Services struggle to transition from transaction-based to customer-based approaches. In the end, it is all about Customer Experience (CX), whether the customer is an industrial partner or an individual end-user. Being able to pivot in terms of target personas and bundles of jobs-to-be-done covered is what helped many SMEs overcome difficult times. A set of surveys and in-depth interviews with 257 Italian SMEs pinpointed that increased use of ICT during the pandemic was synonymous with product innovation initiatives. The beneficial impact of Industry 4.0 data-processing technologies—we can list automation and data exchange mechanisms through IoT—was less obvious, except when accompanied by Servitization (Bettiol et al., 2022). Servitization consists into turning a product into a service. Let us face it, when we buy a product we already take into account the whole experience, including the service. What is often meant is that the business model is a service. For example, we buy a yearly license for a software. Transitioning to servitization can be tricky for existing customers: How to justify that the OŪRA ring they bought as a one-shot to measure their sleep and temperature is now a yearly subscription? In such a case, the introduction of significant new features will help negotiate the change. Transformation is much needed but companies have to keep in mind that internal innovations are often optimizations, that may or may not get new jobs done for customers. This device had its chipset upgraded and produced in a new way. The production cost was improved but as the company decided not to reflect it in the price (not very nice for the customers), in the end, the added benefit for the users was zero, if not negative as they ended up to unknowingly beta-test the new configuration. A better way of doing this would consist for instance in adopting a less

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polluting chipset, keeping the price the same, but explaining to customers how the revamped production process positively impacts the community. In case of side effects, there would at least be some justification other than “we were making bigger margins on your back.” Firms can decide to have in-house R&D and/or rely on open innovation. In that case, four strategies have been highlighted in a study in Asia-­ Pacific: Full collaboration, relationship-centric, knowledge-centric, and minimal collaboration. Collaborating with external companies requires a certain level of trust that firms in Taiwan for instance would only have in their family business and sister organizations. Relationship-centric and full collaboration open innovation strategies presented the best result in terms of innovation success (Cheng & Shiu, 2021). Some doubt that a partnership can truly be win-win as firms have a tendency to play tug of war. In the context of sustainable innovation, with partners having the greater good in mind, open sustainable innovation becomes very relevant, and can help guide the growth strategy.

4.4 Chapter Highlights –– Adaptive Management is the secret of fast-moving companies and centenarian brands like De L’Europe –– Prenatal Hormones and the way we process and store information have a direct impact on our behavior and preferences and can be used to adapt products and strategies –– The BTS case demonstrates how Growth Hacking is done, from harnessing the IP of concert light sticks to live conversations in the Weverse

References Abubakar, I., Abdullahi, R., & Ibrahim, H.  B. (2021). Moderating effect of strategic improvisation on product innovation and performance of manufacturing SMEs. Asian Journal of Management, 12(3), 237–242. Aswad, J. (2022, March 23). BTS is the world’s top artist as global recorded-­ music revenues soar to $25.9 billion. Variety. https://variety.com/2022/ music/news/bts-­worlds-­top-­artist-­ifpi-­2021-­report-­1235211531/

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Baaken, T., Liu, L., & Lapornik, L. (2021). Bricolage and growth hacking: Two smart concepts of creating a business lacking resources. Next Generation Entrepreneurship. Bettiol, M., Capestro, M., Di Maria, E., & Micelli, S. (2022). Overcoming pandemic challenges through product innovation: The role of digital technologies and servitization. European Management Journal. Bokhari, F. A., Mariuzzo, F., & Bennato, A. R. (2021). Innovation and growth in the UK pharmaceuticals: The case of product and marketing introductions. Small Business Economics, 57(1), 603–634. Burt, K. (2022, September 1). BTS Army reveals why they can’t get enough of the supergroup’s game ‘In the SEOM’. Inverse. https://www.inverse.com/ gaming/bts-­army-­in-­the-­seom/amp Cheng, C. C., & Shiu, E. C. (2021). Establishing a typology of open innovation strategies and their differential impacts on innovation success in an Asia-­ Pacific developed economy. Asia Pacific Journal of Management, 38(1), 65–89. Condé Nast Traveler. (2022, October 4). Top 20 hotels in Northern Europe: Readers’ choice awards 2022. https://www.cntraveler.com/gallery/northern-­ europe-­top-­hotels De L’Europe. (2022). De L’Europe Amsterdam. https://www.deleurope.com/ Derval, D. (2018). Designing luxury brands: The science of pleasing customers’ senses. Springer. https://link.springer.com/book/10.1007/978-3-319-71557-5 Derval, D. (2022). Prenatal hormones, beauty rituals, and cosmetics preferences. Science Talks, 3, 100052. https://doi.org/10.1016/j.sctalk.2022.100052 Derval, D., & Bremer, J. (2012). Hormones, talent, and career: Unlock your Hormonal Quotient®. SpringerBriefs. https://link.springer.com/book/10.1007/ 978-­3-­642-­25713-­1 Eichenbaum, H. (2014). Time cells in the hippocampus: A new dimension for mapping memories. Nature Reviews Neuroscience, 15(11), 732–744. Feiz, D., Zarei, A., Maleki Minbashrazgah, M., & Shaabani, A. (2021). Typology of growth hacking strategies along the growth hacking funnel. Iranian Journal of Management Studies, 14(2), 331–346. Geniole, S.  N., & Carré, J.  M. (2018). Human social neuroendocrinology: Review of the rapid effects of testosterone. Hormones and Behavior, 104, 192–205. Ghanbarpour, T., Sahabeh, E., & Gustafsson, A. (2022). Consumer response to online behavioral advertising in a social media context: The role of perceived ad complicity. Psychology & Marketing, 39(10), 1853–1870. Grinevich, V., & Stoop, R. (2018). Interplay between oxytocin and sensory systems in the orchestration of socio-emotional behaviors. Neuron, 99(5), 887–904.

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Han, C., & Zhang, S. (2021). Multiple strategic orientations and strategic flexibility in product innovation. European Research on Management and Business Economics, 27(1), 100136. Kärcher. (2022a). About Karcher. https://kaercher.com/au/inside-­kaercher/company/about-­kaercher.html Kärcher. (2022b). New accessories for cleaning facades and solar power installations. Cleaning equipment and pressure washers | Kärcher International. https:// www.kaercher.com/int/inside-­k aercher/company/media-­i nformation/ media-­information/2169-­new-­accessories-­for-­cleaning-­facades-­and-­solar-­ power-­installations.html Kärcher Futuretech. (2022). About us and our history. https://www.karcher-­ futuretech.com/en/inside-­kaercher-­futuretech/company/about-­kaercher.html Kivimaa, P., Laakso, S., Lonkila, A., & Kaljonen, M. (2021). Moving beyond disruptive innovation: A review of disruption in sustainability transitions. Environmental Innovation and Societal Transitions, 38, 110–126. Manning, J.  T. (2002). Digit ratio: A pointer to fertility, behavior, and health. Rutgers University Press. Mezinova, I., Balanova, M., Bodiagin, O., Israilova, E., & Nazarova, E. (2022). Do creators of new markets meet SDGs? Analysis of Platform Companies. Sustainability, 14(2), 674. NASA. (2022). Earth science applications guidebook final. NASA Applied Sciences. https://appliedsciences.nasa.gov/guidebook/ Ribeiro, A. C. (2022). How BTS is using intellectual property to build its legacy. WIPO – World Intellectual Property Organization. https://www.wipo.int/ wipo_magazine/en/2022/01/article_0007.html Saura, J. R., Palacios-Marqués, D., & Iturricha-Fernández, A. (2021). Ethical design in social media: Assessing the main performance measurements of user online behavior modification. Journal of Business Research, 129, 271–281. Schenkenhofer, J. (2022). Hidden champions: A review of the literature & future research avenues. Management Review Quarterly, 1–66. Scuttari, A., Pechlaner, H., & Erschbamer, G. (2021). Destination design: A heuristic case study approach to sustainability-oriented innovation. Annals of Tourism Research, 86, 103068. Valdivieso, G., Uribe Gómez, L., & Ordóñez-Matamoros, G. (2021). Toward a typology of public innovation. Eccentric, discrete, flat and transformative innovation (pp. 15–34). Policy and Governance of Science, Technology, and Innovation. Webb, J. A., Watts, R. J., Allan, C., & Conallin, J. C. (2018). Adaptive management of environmental flows. Environmental Management, 61(3), 339–346. Wysocki, R. K. (2010). Adaptive project framework: Managing complexity in the face of uncertainty. Addison-Wesley Professional.

5 Optimizing the Product Portfolio

In this chapter, we find out with the cosmetics and the cleaning cases how to develop an optimal product portfolio—diverse enough to meet various customers’ demands yet lean. With the VELUX story, we look into sustainable investment and ESG.

5.1 Driving Category Innovation: Sunscreen We were sitting near the pool in a luxury hotel in Singapore with a group of expats, having some kind of informal business meeting on cosmetics products. It was around that time when big global brands were sending their high potentials to run countries they had no clue about—leading more often than not to ill-informed business decisions. At that stage, I did not know which waters we were navigating.

5.1.1 The Proliferation of SKUs The priority for the brand was sunscreen. According to their research— they went on about all the focus groups they attended, mostly in sunny locations, and the data and numbers crunched for them by various

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research institutes—and explained how a vast proportion of Asian women, especially in Singapore, and China, aspire to follow the Western beauty standard (I think they meant to be “white”) and would therefore avoid the sun and wear sunscreen at all times. There was a lot at stake when introducing or sunsetting sunscreen products. The SKUs (Stock Keeping Units) were multiplying: Sunscreen comes in many sun-protecting factors (SPF), forms and shapes (spray, gel, cream), and tints. It is not unusual, especially for people wearing sunscreen on a daily basis, to combine it with a foundation. For those not familiar with makeup, or construction, foundation is a layer of powder or cream aimed at making the complexion more homogeneous and covering some skin “imperfections.” The brand had reached the point where the product portfolio needed a serious diet.

5.1.2 Sunsetting Products and Product Portfolio Management The dilemma is, what fat to trim? As the brand also commercializes hydrating creams and makeup, the product team would not want to stop an SKU that might be bought by only a few people in case they all happen to be beauty influencers, nor to disappoint customers, who always buy the same three products together and suddenly one goes missing, as they might then get the whole set from a competitor. Who is buying what, and why? The second round of Virgin Colada was being served, and looking at the white cocktail I could not help but doubt that the main motivation to use sunscreen, would just be about entertaining Western beauty standards. Something to look up after the meeting, for sure. Product portfolio management is a skill, really. I have witnessed many cases of SKUs proliferation with the following issues: –– Two or three SKUs are targeted at the same persona and do the exact same job (boxes with vertical stripes in Fig. 5.1). –– Some SKUs are suitable for nobody (boxes with diagonal stripes in Fig. 5.1).

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Fig. 5.1  Product portfolio optimization (Courtesy of DervalResearch)

If customers buy several products in one place, sunsetting one that is not profitable can jeopardize the whole account. It can be good also, in some categories, to have dreamy products, that give the illusion of choice. For instance, people look at many colors for cars and kitchens but tend to go for black. Still, it is nice to be able to give them the choice. When the same SKU is catering to several personas, perfect. If some personas are SKU-less, the question is whether this was intentional or not. The inflatable pool toys, made me think of the elegant way to sunset durable products introduced by Decathlon. The global sports equipment retail chain, headquartered in the North of France, inaugurated a second-­ hand store in Arlon Belgium near Luxembourg. The new brand will be called Nolhtaced for the launch—so Decathlon written backward—to promote “reverse consumption.” Nice marketing stunt, triggering funny comments on social media, with some people wondering whether it would be smart for Dior Homme to do the same. The French firm bought back used sports equipment for half a million dollars—paid in Decathlon coupons. So far 80% of the items were refurbished and sold with a warranty. Best-selling products are bikes for kids and fitness equipment. Less popular items will be donated or recycled (Kurzawa, 2022). As recycling is quite polluting as well, fashion brands turn to biomaterials. From mushroom leather to “alive” fabrics. The idea is to not generate waste in the first place (Rese et al., 2022). Some concerns have been

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published here and there about the untested nature of these “alive” materials (full of bacteria and other fungi) and how they could possibly nest in human skin. Sadly, basic risk and safety management is quickly forgotten by too many firms once they start computing dollars. I would argue: People could find some nice {insert favorite color} {insert favorite textile} clothes they like and wear them for years until they fall apart—but my example if very sustainable might not feed the fashion industry. Rethinking the whole supply chain from cradle to cradle is a great source of product strategy innovation.

5.1.3 Rituals and Beauty OCD Scanning around the pool—not a familiar place for me—I noticed two main ways to apply sunscreen: Dots or blob. Blob-people would put a big blob of sunscreen in the palm of their hands, smear it in between their hands, and then apply it on the face and body. Dots-people would apply small dots of sunscreen throughout the face and body and then smear them. Although not an ace in physics, I was gauging that the design could be fine-tuned to the way of applying the cream, once the target personas would be clear. Mosquito time was starting and I was glad to separate ways. We agreed to follow-up during office hours—our contact in charge of the category also seemed to doubt the accepted narrative and was happy to get a second opinion from us. Working with some of our teams in China, I was struggling from time to time to understand how they felt because their facial expressions would be more subtle than my drama face. The reason behind this is that we have more or fewer muscles in the face and if we have fewer, we will also develop fewer wrinkles. In that case, the only hint giving away the age is brown spots appearing on the face. And these appear when getting exposed to the sun. Aha! So applying sunscreen on the face on a daily basis is a prevention process to look young longer. Once we know the real motivation, everything comes together. The same personas thriving for beauty perfection, also apply the sunscreen in dots—of course—and their rituals are borderline beauty OCD (Obsessive Compulsive Disorder). We were able to share with the category manager, not only

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which bottle design to go for, but also the range of tints for the foundation, as well as the level of SPF. The number of SKUs could be trimmed without jeopardizing overall sales and customer satisfaction. When observing beauty rituals—this also applies to cleaning procedures—some people show clear signs of beauty OCD (Derval, 2022a). In particular, they love to count (the layers or strokes of makeup), to match by color, and they enjoy a certain symmetry (Fig. 5.2). Some customers need specialized products while others love all-in-one options. This is extremely important when developing the portfolio as teams might upset

Fig. 5.2  Beauty OCD signs (Courtesy of DervalResearch)

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the specialized users with a foundation + sunscreen combo, genuinely thinking they are making products more practical to use. The only way to safely optimize a product portfolio and trim the references is to gain a deep understanding of customers’ motivations and purchasing drivers. More often than not, it requires challenging pre-conceived ideas.

5.2 Sustainable Investment: VELUX Portfolio management is strategic for investment funds and sustainability is a new performance indicator to be reckoned with.

5.2.1 Achieving Lifetime Sustainability VELUX revolutionized living spaces by introducing ventilation (VE) and light (in Latin LUX) in the attics. Danish engineer Villum Kann Rasmussen patented his vertical window 80 years ago and started a new product category. Light and ventilation are the ideal anti-fungal agents and we can safely say that the brand has been contributing to inhabitants’ health and well-being. Sometimes a firm’s home market is not the best one: The windows were selling ten times more in Germany than in Denmark and Rasmussen partnered with German Albers to create VELUX.  The company is believed to owe its long-lasting success—by the way, I think most French trust that the brand is local, which is great—to constant innovation, taking care of all stakeholders, and expanding their product portfolio with, in addition to their famous VELUX-Skylight vertical window, the Sun Tunnel—a flexible tube going through the roof to allow daylight in—, roller shutters, electric-powered windows, and sunscreening products. The company is owned by the VELUX Foundations and the family (VELUX, 2022). VELUX FONDEN (Foundations) is supporting Museums’ programs and various research programs from gerontology to ophthalmology (The VELUX Foundations, 2022). Maybe the multiplication of multi-billion

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dollar family businesses following a similar governance model with the creation of a Foundation—more recently climbwear company Patagonia for instance—is what is putting sustainable investment in the spotlight. In a historical move, VELUX is making up for its past 80 and upcoming 20  years of carbon footprint through a WWF forest conservation program (The United Nations, 2022). Via a partnership with Schneider Electric, the group headquartered in Hørsholm, Denmark, is also busy implementing a zero-carbon action plan at their production sites in Sonneborn, Germany, and Namysłów, Poland, as combined they represent 25% of the group energy consumption. The measures include using renewable heating sources, installing solar photovoltaic systems, and using wood waste (Mitchell, 2022). VELUX set a precedent by being accountable for the past and introducing the notion of lifetime sustainability.

5.2.2 Interesting Diversifications People tend to have a short memory and some brands are taking advantage of it. A good example is Nestlé, multiplying controversies from pushing milk/cereals baby powder as an alternative to the real thing, even to people with a microbiome unable to digest these types of food and probably contributing to the rampant wheat and milk allergies. In their defense, the company was founded by the fusion of a milk and a flour maker. The recent internal document leak evaluating that 60% of the product portfolio was unhealthy did not come off so well (Kumari & Muralidhara, 2021). Having a brand sell sugary foods that trigger chronic diseases, on the one hand, and drugs that treat chronic diseases, on the other hand, sounds a bit preoccupying. Coca-Cola is currently driving the cane sugar packaging revolution. Now that sugar has been finally recognized as damaging, and very addictive for people with mu-opioid receptors, it seems to be sneaking its way back into the bottle itself. In the same way, sugar maker DSM is all over the microbiome place with sugar-­ coated creams while main tobacco brands are working on health inhalers—not sure this can compensate for the damage done by cigarettes and now vaping. When evaluating the impact on people and planet, brands

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should be held accountable for past wild behaviors, and the generated wealth could reasonably be used to compensate for the harm caused. The uproar on social media when Nespresso or Danone achieved B Corp status was exactly about that: Recent good behavior is great but should not put a company at the same level as firms that have been working for good from the get-go.

5.2.3 ESG, Nutri-score, and Other Ratings ESG is increasingly being used to preferably invest in companies having a positive impact and a low risk in terms of Environmental, Social, and Governance (ESG) considerations. ESG ratings in China happened to improve the quality and quantity of green innovations, as measured among A-share firms listed in the past decade. The increase of green funding and incentives (mostly by alleviating some financial constraints) combined with the increase of managers’ green and environmental protection awareness seem to be the key to success. The quantity was measured by the number of patent applications and the quality by the number of their citations, which could work as China is patenting so actively that the USPTO started changing its rules (Tan & Zhu, 2022). Some argue that ESG rating has a limitative effect on sustainable efforts as it fails to take into account innovations that will have a positive impact in the long term. The example of Honeywell getting an “F” in spite of great innovations in the pipe has been cited (Madden, 2022). If most investors avoid sensitive industries, firms are not really being held accountable for their past impact either. In a similar way, a rating system like Nutri-Score, which has a lot of merit, can sometimes penalize an authentic French saucisson, probably because people with certain microbiomes cannot properly process meat and the associated animal fat, putting this product in the same category as an overly processed food, likely even containing genetically modified ingredients. I had the honor to deliver the valedictory speech during a scientific marketing conference at a reputable university in Mumbai and the Dean

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asked for my advice. In spite of all the fantastic research partnerships with leading private companies, very good career opportunities for their alumni, and more than decent publications, the university was nowhere to be seen in the international rankings. I thought for a minute then recommended “Why don’t you create your own ranking?” The Dean, faculty, business leaders, and students, looked at me a bit at a loss for words but had to admit that why would a ranking devised by American academics favor Indian schools? By definition, the criteria would be biased. I was smiling when a couple of years later, Shanghai came up with such a new ranking, that is now a reference—it was certainly the way to go. A ranking or rating with silly criteria might push all organizations involved into adopting counter-productive processes, and in the long run sabotage sustainable innovation efforts. ESG and other initiatives like B Corp should therefore regularly be monitored and adjusted against their results.

5.3 Product Portfolio: Clorox Clorox, at the top of the ESG game, managed to build a broad yet cohesive product portfolio.

5.3.1 A Cohesive Portfolio: Clorox The latest ESG ratings put brands like Intel and Clorox on top. Intel, weirdly for their water management practices—it is true that they recycle all the water they use but at the same time they consume and possibly degrade a huge lot of water during their production process—and Clorox for their gender policies (Foster, 2022). Clorox started as an electro-alkaline company in Oakland selling bleach for industrial purposes, with more or less success. Quickly, a Scottish retail couple who invested in the company took over and they had the idea to give away free samples of bleach, much more diluted than 21% (Clorox, 2022). It was a hit and Clorox became a household item.

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Clorox portfolio of brands is diverse yet cohesive. Unlike LVMH catering to the same luxury personas, whether selling yachts or Champagne, Clorox is targeting different personas but still manages to stay true to its core mission: Fighting bacteria. Clorox and Brita brands are positioned in the clean and healthy market, Burt’s Bees and RenewLife in the healthy market. Poett and Clorox Scentiva with their absence of bleach and very strong and unidentified fragrances are probably the most puzzling brands in the whole Clorox portfolio. On social media, the strong scent and overly chemical nature is clearly putting off not only professional but also private cleaners. As adding some drops of bleach in the bath is recommended to people with eczema—due to the anti-fungal properties that help regulate atopic skin microbiome—Clorox naturally attracted a more sensitive persona, who could now be a bit confused (Paller & Beck, 2022). I can understand the ongoing battle with Tide and the likes but not sure doing like competitors will work in the long run. Separating Scentiva from the Clorox line would have been safer. Investigating further the know-how showcased throughout the Clorox brands portfolio, we identified bleach of course, but also water filters, litter, charcoal, trash bags, and probiotics. It all sounds quite random until we realize that Litter contains charcoal, borate, and some Febreze. A water filter can also contain charcoal, which has antiseptic properties, in line with the anti-bacterial effect of bleach and the microbiome-altering probiotics (Fig. 5.3). Spray and wipes sold out during the pandemic, that saw an increased demand for cat litter and Kingsford charcoal—driving Clorox sales lately (Garcia, 2021). To stay close to its customers, Clorox went back to a direct-to-­consumer approach, using for instance the Internet of Things to alert water filter users when it is time to reorder (High, 2018). A big opportunity for Brita and Clorox would certainly be UV cleaning, unless with the launch of Scentiva the group decided to stay in the chemical arena rather than expand on the bacteria-combating and health aspects.

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Fig. 5.3  Clorox portfolio of brands (Courtesy of DervalResearch)

5.3.2 Private Labels Private labels commercialized by retailers are increasingly popular and could grow further by targeting various customer groups thanks to advances in technology. These smart private labels, also taking into consideration aspects like sustainability and ethics, in addition to the usual price and quality, could unlock retail differentiation and growth (Gielens et al., 2021). For working closely with retailers, I can confirm that they have a strong understanding of their customers and traditionally focus on the cash cows (not sure what the vegan equivalent would be here) and let A-brands experiment and invest in R&D for them. In multiple instances where we worked with A-Brands to identify game-changers in their product category, it appeared that the private labels were outselling them not because of the low price but because the products were better suited to the consumers’ needs.

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Revenue Growth Management (RGM) is maximized when the right products, packs or limited editions are proposed to the right personas at the right moment and time (cf Wait Marketing in Chap. 1), and with the right sensory mix. Brands and retailers rely heavily on tactics like promotions and seasonal products for demand-shaping purposes, recent transactions to predict near future actions—what is called demand sensing—and careful stock management for demand fulfillment excellence (Yin & Ghosh, 2022). Having access to reliable internal and relevant external data, like weather or bank holidays, is a big plus but key indicators are often missing as they are very specific to a product category—remember kappa opioid receptors for peanuts—and are therefore not really tracked nor traced by big data and machine learning systems using generic data as input. Corporate Social Responsibility (CSR) initiatives were originally driven by customers and public opinion (Ullah et al., 2021). The paradox is that the same people complaining are not all willing to pay more, even for let us say food products. As companies, especially those with greedy shareholders, are not willing to decrease their margins, they tend to rely on “shitification”—like replacing natural with synthetic ingredients—to respond to the new challenges, generating a negative impact on people and planet (Derval, 2022b).

5.3.3 Mitigating Product Development Uncertainty As suppliers and partners tend to do what they are good at, even when the context is changing, cultivating a diverse sourcing portfolio has proven to be beneficial for New Product Development (NPD) (Thakur-­ Wernz et al., 2022). Customer preference uncertainty is most innovative companies’ nightmare as it can make or break product launches. Mitigation plans refer to product option strategies (Oh & Hong, 2021). It is a bit like companies letting their customers design their own products as they have no clue what they want. I would argue that to know which options to propose, teams need to understand customers’ preferences, and once they understand them, there is no need to multiply option attempts. Of course, options are a weapon of choice when flexibility is needed for the final

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delivery. For instance, Starbucks by proposing a single or double-shot of coffee can satisfy both the super-tasters with many taste buds and the guests with fewer taste buds. Samsung, by including an equalizer in the menu of their TV, let users decrease the relative volume of the bass and high-pitch sound if they struggle to hear the voice during an action movie, in between all of the explosions. This simple setting allows to please customers with different hearing profiles and makes all customers happy. A deep understanding of customers’ behavior and preferences can help detect these hidden opportunities and serve various personas with the same base product. Developing a sustainable product portfolio requires achieving both quick-wins and long-term competitiveness (Villamil et al., 2022). It comes at a cost. Target costing considers the costs of a product portfolio, such as labor and material costs, but often overlooks R&D costs and redundant costs between product lines or categories (Stadtherr & Wouters, 2021). The latest trend is therefore green lobbying. Many firms who have invested in green technologies and R&D, or achieved a B Corp or other sustainable labels status, actively promote green laws and regulations, some for the greater good and others to penalize their competitors—fair enough (Eun et al., 2022). Using sustainability and other standards to put a barrier to entry for other players can allow some room to adjust the portfolio and product innovation strategy.

5.4 Chapter Highlights –– ESG and other scores and rankings can help achieve sustainable goals when used properly or just divert from the original purpose –– SKUs multiplication and risky diversification strategies can be mitigated by a better understanding of customers and non-customers needs –– The Clorox case poses an excellent example of consistent yet diverse product portfolio, from cat litter to lipstick VELUX and Clorox cases are also available in the complimentary Course Frontiers in Product Innovation Strategy that comes with the book: https://sn.pub/RcnzV5. The 35mn Espresso course includes a recap for each chapter and some exclusive materials.

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References Clorox. (2022, February 18). Timeline. The Clorox Company. https://www.thecloroxcompany.com/company/our-­story/timeline Derval, D. (2022a). Prenatal hormones, beauty rituals, and cosmetics preferences. Science Talks, 3, 100052. https://doi.org/10.1016/j.sctalk.2022.100052 Derval, D. (2022b). The right sensory mix: Decoding customers’ behavior and preferences (2nd ed.). Springer. https://link.springer.com/book/10.1007/ 978-3-662-63795-1 Eun, J., Lee, M., & Jung, Y. H. (2022). Green product portfolio and environmental lobbying. Academy of Management Proceedings, 2022(1), 11437. Foster, L. (2022, February 11). Barron’s 100 most sustainable companies. https:// www.barrons.com/amp/articles/mostsustainable-companies-51644564600 Garcia, T. (2021, May 3). Clorox is still selling many more cleaning products than it was pre-pandemic. MarketWatch. https://www.marketwatch.com/ story/clorox-­sales-­drop-­compared-­with-­last-­years-­stockpiling-­but-­remain-­ above-­pre-­covid-­levels-­11620063874 Gielens, K., Ma, Y., Namin, A., Sethuraman, R., Smith, R. J., Bachtel, R. C., & Jervis, S. (2021). The future of private labels: Towards a smart private label strategy. Journal of Retailing, 97(1), 99–115. High, P. (2018, March 5). The CIO of Clorox drives product innovation for customers and consumers. Forbes. https://www.forbes.com/sites/peterhigh/ 2018/03/05/the-­cio-­of-­clorox-­drives-­product-­innovation-­for-­customers-­ and-­consumers/ Kumari, S., & Muralidhara, G.  V. (2021). Nestlé under fire over unhealthy product portfolio: Will the company emerge unscathed? IUP Journal of Business Strategy, 18(3). Kurzawa, C. (2022). Decathlon Lance Sa marque de 2e main. Paperjam News. https://paperjam.lu/article/decathlon-­lance-­sa-­marque-­2e-­m Madden, B. J. (2022, May 2). Bet on innovation, not ESG metrics, to lead the net zero transition. Not ESG metrics, to lead the net zero transition. Mitchell, S. (2022, February 12). The VELUX group and Schneider electric announce extended partnership to accelerate lifetime carbon neutral ­commitment. Ethical Marketing News. https://ethicalmarketingnews.com/ the-­velux-­group-­and-­schneider-­electric-­announce-­extended-­partnership-­to-­ accelerate-­lifetime-­carbon-­neutral-­commitment Oh, G., & Hong, Y. S. (2021). Managing market risk caused by customer preference uncertainty in product family design with launch flexibility: Product option strategy. Computers & Industrial Engineering, 151, 106975.

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Paller, A. S., & Beck, L. A. (2022). Bleach baths for atopic dermatitis: Evidence of efficacy but more data are needed. Annals of Allergy, Asthma & Immunology, 128(6), 617–618. Rese, A., Baier, D., & Rausch, T. M. (2022). Success factors in sustainable textile product innovation: An empirical investigation. Journal of Cleaner Production, 331, 129829. Stadtherr, F., & Wouters, M. (2021). Extending target costing to include targets for R&D costs and production investments for a modular product portfolio – A case study. International Journal of Production Economics, 231, 107871. Tan, Y., & Zhu, Z. (2022). The effect of ESG rating events on corporate green innovation in China: The mediating role of financial constraints and managers’ environmental awareness. Technology in Society, 68, 101906. Thakur-Wernz, P., Bruyaka, O., & Contractor, F. (2022). Sourcing portfolio diversity in new product development: Antecedents and performance implications. Journal of Business Research, 150, 179–193. The United Nations. (2022). The lifetime carbon neutral commitment: Taking responsibility for past and future carbon emissions. SDG good practice. Sustainable Development  – Department of Economic and Social Affairs. https://sdgs.un.org/partnerships/lifetime-­c arbon-­n eutral-­c ommitment-­ taking-­responsibility-­past-­and-­future-­carbon The VELUX Foundations. (2022). Projects. https://veluxfoundations.dk/en Ullah, Z., Arslan, A., & Puhakka, V. (2021). Corporate social responsibility strategy, sustainable product attributes, and export performance. Corporate Social Responsibility and Environmental Management, 28(6), 1840–1853. VELUX. (2022). History. The VELUX Group promotes better living with daylight and fresh air. https://www.velux.com/who-­we-­are/history Villamil, C., Schulte, J., & Hallstedt, S. (2022). Sustainability risk and portfolio management – A strategic scenario method for sustainable product development. Business Strategy and the Environment, 31(3), 1042–1057. Yin, D., & Ghosh, N. (2022, March 28). Uplevel your revenue growth management for CPG with sigmoid on AWS. Amazon Web Services. https://aws.amazon.com/blogs/industries/uplevel-­your-­revenue-­growth-­management-­for-­cpg/

6 Building a Visionary Innovation Roadmap

In this chapter, we see with the automotive and insurance cases how sensory profiles influence customers’ priorities and how to use this knowledge to form more accurate adoption predictions. The MAIF story teaches us how to unlearn innovation and with Xiaomi, we see how to build a solid innovation roadmap.

6.1 Futureproof Innovations: The Cockpit of Tomorrow I was sitting in the large board room, somewhere in the South of Germany, enjoying the scent of some fresh and complimentary brezel, wondering why the Oktoberfest was actually happening in September, when our hosts came in.

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6.1.1 The Future of Mobility A parliament of engineers, looking serious but relaxed, and ready to tackle our ordre du jour: the future of mobility and the cockpit of tomorrow. Amid an automated driving revolution, with car batteries being swapped, and drivers having to learn to pass on the steering wheel to the onboard AI, the cockpit needed to be reinvented. From the entertainment systems to the layout, a total revamp was on the way and a hot topic (pun intended) was the heating of the car. Winters can be tough and the challenge is not just to heat the car—or more importantly the driver— but to do it fast to ensure an optimal driving experience. OEM suppliers were pushing their heated seat products as their action is immediate, as opposed to central ventilation for instance, but people’s butts were more often than not on fire, literally. Automated driving will allow drivers and passengers to have fun, or to engage in useful activities like cursing at other cars. It will also require them to stay alert, in order to take back the steering wheel in case of emergency or confusion on the road (Derval, 2022). The drivers need to be relaxed but not too much, and this requires among other usability aspects a certain cockpit temperature. Most people cannot function under a certain temperature—I use it very often as an excuse “I was too frozen to type on the keyboard …”—or above a certain temperature—I use this one as well “It was too hot to work on the computer …” The complexity is that this perfect temperature varies among individuals as observed in what I would call the air conditioning dilemma on the plane: Some people are fainting because it is too hot and others because it is too cold, and the crew stands quite clueless in the middle.

6.1.2 Looking from a Fresh Angle This brings us back to our heated seat dilemma. On the bright side, if well done, the system consumes less energy than heating the whole car. On the dark side, the system transitions too fast from warm and fuzzy to “my ass is on fire.” The concept seemed nice but I felt something was

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wrong with the implementation. Motorbikers would generally use heated gloves, which makes sense as the handlebars are very exposed to the wind. Heating the steering wheel can be an option but if too hot it would also constitute a safety hazard, similarly to the seat. So then we are back to the air conditioning/ventilation which takes a bit longer and comes with its parade of mold and other pathogens—last time a cockpit Airco has been checked they counted 40 different fungi and bacteria (bon appétit!). Let us face it, some drivers would just wear a UNIQLO sweater with the HEATTECH technology, or bring a thermos of hot coffee, and some would just leave it—possibly the same people peeing on the windshield to break the ice, just saying. The rest of the group moved on to the next topic on the agenda, the cockpit layout, but somehow I was still stuck on this hot topic, discretely googling during the meeting even though I know it is bad. In some more formal meetings, I was always fascinated by women who would wear a top without sleeves, while I and the other guys in the room would wear long sleeves. At first, I thought it was to put on display their low body mass index—fair enough. On the other hand, I also observed how some people have to wear short sleeves or shorts in summer, and how they would open the little ventilation above their head on the plane, in a desperate attempt to get some air. The concentration of cold sensors in the forearms is such that it is beneficial to immerse them in cool water to reduce the risks of heat stroke in summer—a hands-on experiment showed it was even better to use carbonated water. Forget the air conditioning in summer, a bucket of your favorite sparkling water will do (Tanaka et al., 2020). Even more fun, the Chinese tuhao—understand new rich with little manners—would exhibit their beer belly by lifting their t-shirt when it is too hot. It seemed obvious that people were using their clothing to ventilate and help maintain a certain temperature. What was fascinating me suddenly—and I think I missed the ongoing discussion about the panoramic view—was the different body parts used: arms, head, and belly. When we think of it, maybe the heating should be on the headrest or in the safety belt. Temperature can be regulated by heating systems, clothing, and substances. It is well known that chili will make you hot and the substance is even embedded in heating dressings to relieve back pain. The Nobel Prize

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in Physiology or Medicine 2021 has been awarded to Julius & Patapoutian “for their discoveries of receptors for temperature and touch” (The Nobel Prize, 2021). In our body, we have sensory channels responding to specific chemical compounds, temperature, touch, and pain. The discovered TRPV1 channel is reacting to chili pepper (and also to raw garlic and viper venom!) as well as to extreme heat (Fig. 6.1). Mint and wasabi on the other hand are activating the TRPA1 channel and will have a cooling effect. People suffering from back or muscle pain might have experienced

Fig. 6.1  Heating and cooling substances (Courtesy of DervalResearch)

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the relieving effect of capsaicin cream (found in chili) and now the mechanisms are more clearly understood. I am not saying we should rub drivers with chili but the cooling and heating factor should be taken into account when selecting the cockpit textures, materials, and scents. A metal steering wheel would be colder than a bioplastic one.

6.1.3 Research and Development Efforts Research and Development has its cost, and when devising a more energy-efficient heating system, that would also be more user-friendly, it is crucial to be sure. We took some time after the meeting to study the car and cockpit target personas and based on their sensory profile and geography, we came to the conclusion that the body part to heat in order to quickly warm the whole body up was: The elbow! Due to a higher concentration of heat receptors, the elbow would propagate the warm and fuzzy feeling faster. On the practical side, if an armrest heating gets too strong, it is easier to immediately remove your arms, as opposed to jumping off your seat on fire, for instance. The surface to be heated is much smaller and the armrest is still part of the seat, so all stakeholders were happy with the efficient and user-friendly solution.

6.2 Unlearning Innovation: MAIF The most complicated aspect of innovation is being able to look at things from a different angle.

6.2.1 Unlearning and New Product Development Turning an invention into an innovation requires both exploitative and exploratory learning skills—understand the ability to make incremental but also radical changes. Unlearning is what should help teams change their habits and beliefs for better new product development (NPD) outcomes. The example shared is about Steve Jobs who just launched the

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iPod and presumably thought smartphones were just crap and not worthy of any investment, until convinced otherwise by his team (Açıkgöz et al., 2021). We encountered a similar case in GPS navigation where the board had struggled with smartphone compatibility in the past and did not want to hear about it anymore and opted for a separate device. Nowadays, most people, including drivers will check a route on their smartphones. That is why it is important to regularly assess again a product category or technology. To collaborators explaining they had no prior training in innovation and hoping they would still be able to contribute to their team work, my answer has invariably been “Welcome and no worries, I think it is better, actually” and I would explain how embracing new approaches and techniques is easier with an open mind. Change is more arduous for people who had formal education on a topic, especially if they store data in categories, as they literally need to re-encode information in their brain. Stand-up comedian Loyiso Gola explained with humor and scores of anecdotes how the black community in South Africa had to unlearn many things to move forward (Gola, 2021). The mindset to unlearn innovation is ethical, adaptive, and lean. Great solutions are often complex to implement but obvious to use. The knowledge needed is a good grip on the realm of possibilities, and an understanding of the deep needs and the context, in order to make proper thinking by analogy (Fig. 6.2). During the 1929 Great Depression, in a café on the French west coast, a group of teachers—tired of paying more money for their car insurance than what they would actually earn—decided to create their own mutualized insurance now known as MAIF (MAIF, 2022). The pioneering not-for-profit organization would collect insurance premiums from the participating teachers and cover their expenses in case of damage. The coverage was extended to bikes in 1952 and today includes all insurance services from boat to life, and the membership has been opened up to non-teachers. The movement inspired the creation of other mutual insurance groups across the country and Fondation MAIF has been founded to help prevent risks. MAIF decided in 2020 to put its mission for good, focusing on people and planet, in the articles of association of the

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Fig. 6.2  Unlearning innovation (Courtesy of DervalResearch)

company. Rather than following SDGs or other B Corp movements, they stayed true to their own values and just officialized a corporate social responsibility movement they started almost 100 years ago. During the COVID-19 pandemic, as their members did not take their cars out due to the lockdown, MAIF simply paid them back their insurance premium—150 million euros in total. A gesture that summarizes the spirit of MAIF.

6.2.2 Advisory Boards as Innovation Labs Advisory boards might well be a great way to get a fresh perspective on the product innovation roadmap and keep an eye on all relevant developments in the realm of possibilities. Firms like Nespresso, Toyota, AML, and Binance incorporated advisory boards in their product innovation strategy. “The advisory board can communicate directly with entrepreneurs, CEOs, or company executives including anyone who is involved in overseeing processes. In other words, implementation of new or updated processes that may be tested beforehand. The goal here is to build a cohesive group that can work together and as a team can achieve goals” shares

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Dr. Yin Yu Lum-Gousgounis, Board Advisor in charge of new business and product development at AML—a medical devices manufacturer contracting for global pharma clients and designing its own diagnostic tools like the popular alcohol monitoring breathalyzers (AML, 2022). Dr. Lum-Gousgounis observed for instance how the packaging of medical devices has become a secondary determinant in the overall purchasing decision, guiding the company in their future product developments (Gousgounis & Neubert, 2020). In the delicate field of coffee pods, the Nespresso Sustainability Advisory Board can count on the input of stakeholders like Rainforest Alliance, Columbian Coffee Growers, Fairtrade International, and of course George Clooney. The actor, who used to work on his grandparents’ tobacco farm and witnessed most of his family dying from lung cancer, is against smoking and child labor. The news of farms in Guatemala having kids pick up the beans for coffee brands including Nespresso was very displeasing (Milne, 2020). And Nespresso teams certainly still have a lot of work to do and can count on their advisory board to remind them. Toyota North America Diversity Advisory Board confirmed the Japanese car maker’s commitment to inclusion by welcoming new members actively supporting the Latino and LGBT+ communities (Toyota, 2022). And Binance—a leader in cryptocurrency expanding on new territories—relies on a board of 11 experts to keep updated on legal, regulatory, and political matters. Newly appointed board members from Nigeria and South Africa will help the firm decode the nuances of the African continent (Adeyanju, 2022). Binance recently got involved in the Twitter deal to see how blockchain and crypto can be implemented to limit the proliferation of bots. Product innovation strategy requires an adaptive, ethical, and lean mindset while relying on a solid knowledge of the realm of possibilities, deep needs, and their context. The expertise of the advisory board members, whether in customers, trends, diversity, regulations, or sustainability, can guide companies into focusing on what really matters, and work as an Innovation Lab.

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6.2.3 New Business Models: Noodelist Premium plant-based instant noodle brand Noodelist managed to build a community of fans. As the first minimum viable product of the California-based brand was to be launched in the midst of a pandemic, founder Thuong Tan, MBA, successfully adopted a direct-to-consumer (D2C) strategy. Thuong accepted to walk us through her product creation process: “I was curious and I observed a lot—which made me realize that instant noodles were such a great innovation in the 1950s but have not been disrupted since” explains Thuong, who decided to reinvent a popular product—instant noodles—and focused on some current premium features such as less fat, less sodium, and healthier options: “Innovation is sometimes as simple as closing the gap between tasty and healthy. Keep the best (convenient and quick), take out or reduce the bad (fat, sodium, and palm oil), and add something new (wheat-based air-dried noodles powered by superplant Moroheiya).” Moroheiya leaves, also known as Mulukhiyah ‫ملوخية‬ in Egypt—which means “food for kings”—are rich in fiber, carotenoids, potassium, magnesium, iron, and vitamins A, B, and C, and are known to protect the immune and digestive systems (Al-Khusaibi et al., 2019). It is worth mentioning that the flavorful taste of Noodelist is recommended by Michelin Star Chef Matthew Dolan: “I swear by Noodelist as arguably the best in their field! I am a Noodelist believer and fan”—you can taste Chef Dolan’s work at 25 Lusk restaurant in San Francisco and check out his “Simply Fish” book. If Thuong has a great experience in noodles—she confessed eating them for breakfast, lunch, and dinner— she hired award-winning Finnish Chef Petteri Luoto to create the yummy soup base recipes. Regularly hosting Noodelist tastings and demos in Silicon Valley, the brand can now count on the support of their first sports brand ambassador, MMA fighter Celine Haga, who relies on Noodelist to supply the needed sodium right after her training (Noodelist, 2022). Make no mistake, Thuong has not only great storytelling skills but also a strong business acumen. Noodelist’s website, powered by Shopify, offers

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no less than 12 different payment options—from Meta to Amex—to make noodle lovers’ shopping experience easier. “Noodelist was launched in the middle of the pandemic” remembers Thuong, “and our original go-to-market strategy were the company cafeterias and break rooms. But then the pandemic hit and working from home started so we had to pivot our strategy quickly. The natural channel was our own website and concentrated on direct to consumers. And since we were just a team of two, we had to make the decision to focus on getting one channel to work first.” Sustainability is a daily concern for the team and they keep an eye on their footprint from cradle to bowl: “Each part and step of the Noodelist product, we aim to choose the most sustainable and eco-friendly option as possible. Whether it’s about sourcing ingredients or packaging materials, we try to partner with local vendors to reduce our carbon footprint. But since we are in the food business, the most important is the taste and we always go for the best quality first to deliver premium-level instant noodles.” The care for the environment is shared by Noodelist’s ecosystem too, whether partners or customers: “It’s also important for us that our partners have the same values with regards to sustainability and we look for the ones who are climate neutral certified like our fulfillment center partner. As for our customers, they can choose to offset the carbon footprint when ordering from the Noodelist website. Sustainability is small choices that we make as a company towards a better planet for all.” The instant treat, available with flavors like “Bold & Juicy Shiitake” or “Lemongrass Vegan Chicken’ish”, comes indeed in a nice eco-friendly box, a “Double Trouble” 4-pack sampler to try two flavors, and even a “Survival Box” with 24 packs for the umami and noodle-addicts (Figs. 6.3, 6.4, 6.5 and 6.6). Noodelist ships within the US territory for now, in the form of a one-time delivery or a subscription, and you are welcome to use the special promo code HAPPINESS (courtesy of Thuong Tan just for our readers) for your next order! Suited as part of a plant-based diet, Noodelist products are also popular substitutes for the traditional ramen—by the way, we can learn to prepare it with the expert tips and tricks Thuong shares on Wikihow (Tan, 2022). Thuong observes some changes in eating habits: “I believe

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Fig. 6.3  Noodelist (Photo: Maija Lähdesmäki, On Blue Plate, courtesy of Noodelist)

that people will change their diet to be more plant-based. And what comes to the lab-grown food/cultured meat, it remains to be seen if it’s really better for the environment and people’s health. I remain curious and I am looking forward to keep observing how the food industry is evolving. My rule of thumb is that food is to be first and foremost enjoyed in good company. My motto is I live to eat, and not just eat to live :).” Observation skills, understanding of customers’ deep (noodle) needs, and flexibility, definitively put Noodelist on the healthy instant food map.

6.3 Innovation Roadmap: Xiaomi Xiaomi provides a great case for devising an innovation roadmap in the booming field of automated driving.

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Fig. 6.4  Noodelist—Lemongrass Vegan Chicken’ish (Photo: Henrik and Renne Angelvuo, courtesy of Noodelist)

6.3.1 How to Involve Experts Involving experts in predictive work is critical. The question is which experts and how to involve them. Approaches like the cross-impact matrices try to bring some order in the management of experts panels’ output, by using some decision trees and the like, to “harmonize their input” (Jodlbauer et al., 2022). Why would a company align a dozen of comparable experts in the first place, like some brood of chickens? If it is because their input is not trusted, maybe they should not be referred to. And if each expert has knowledge in a different field—which sounds more reasonable—then why try to average their feedback? From our practice, companies tend to solicit experts aware of the realm of possibilities, but too often on the technological dimensions only— when revolutions can come from new legal aspects for instance—and

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Fig. 6.5  Noodelist—Bold & Juicy Shiitake (Photo: Henrik and Renne Angelvuo, courtesy of Noodelist)

totally omit to check with experts who know the customers inside-out. These experts are available internally and work in contact with customers, think of contact center agents, vendors, and demonstrators. Sadly they are hardly ever interviewed or their feedback is not taken into account. Advisory board members if picked carefully can also constitute precious decision-support systems.

6.3.2 Innovation Roadmap: Xiaomi Automated Driving Xiaomi’s management team is used to success. The founder sold the Joyo. com online platform to Amazon for $75 million back in 2004 and is still an investor in the software company Kingston. As we will see, Xiaomi is a great listener: they constantly listen to the market, and they hear what

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Fig. 6.6  Noodelist—Double Trouble sampler box (Photo: Henrik and Renne Angelvuo, courtesy of Noodelist)

is being said. The company created in 2010 by Lei Jun and his associates keeps on co-creating products with MI fans. Xiaomi created a whole ecosystem around its IoT platform, being a hands-on investor. In addition to acting like a traditional Corporate Venture Capital firm, Xiaomi is supporting promising start-ups with a trained team of industrial designers—called Xiaomi Studios—who will help all joining products meet the usability and quality standards of the Beijing-based group. Big groups have the bad reputation to deplete smaller partners from their innovative juice so building trust is a priority for Xiaomi, as well as focusing on the new product categories that fit into their business model, even if it means missing out on some great opportunities (Tong et al., 2021). Flexible but focused (=adaptive). Xiaomi, this innovative brand known for its smartphones, and for the largest number of devices connected to its AI + IoT network, is entering the humanoid robotics—their 1.77  m CyberOne robot has just been

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released—and the EV (Electric Vehicles) markets. With heavy investments in LiDAR technology, the brand listed by Forbes China for its achievements on the SDGs, is hoping to tackle autonomous driving and is already testing self-driving cars (Shah, 2022; Hope, 2022). MI logo stands for Mobile Internet but sometimes for Mission Impossible so we can expect the unexpected from them (Xiaomi, 2022). Xiaomi is driven by its fan base and President Wang Xiang regularly checks their opinion on various topics like the ideal price range for its new AV (Autonomous Vehicle). It makes sense not to put all the eggs in the same basket, as the demand for consumer electronics and smartphones shrunk in the main market, China. Diversification of the product portfolio is a must-have. If we look at the product portfolio, we can wonder what is the common point between a Mijia robot vacuum cleaner and a self-driving car (Pandaily, 2022). Xiaomi is in fact a leader in the field of remote sensing, from smart vacuum cleaners to car navigation, and the various applications offer great examples of analogy, the best being probably the SONAR. Day or night, bats always use echolocation to find their way and prey. Their shrill sound bounces back to them, with a wealth of information on the size of their dinner and under which leaf it is hiding. The silent and masked victim is detected even though small and not moving. At first, I thought Parisian drivers were also using echolocation to drive but no: They are just casually insulting each other. Bats and aquatic mammals like the dolphin were the sources of inspiration for the SONAR and the whale even inspired the form and shape of the vehicle using the SONAR, the U-boat or submarine. In the meantime, we got confirmation, that people who look the same, share the same DNA, and this validates designers into working on the form and function together. The function of the SONAR has been extended from detecting obstacles like icebergs to locating mines, for instance. Analogies in the materials and elements used, bring us from sound-based sensing (SONAR) to laser-based sensing (LiDAR). Analogies in terms of structure are key for complex systems, like several vehicles navigating. Observing locusts, a type of grasshopper, travel in immense flocks without bumping into each other, inspired the design of embedded visual systems for autonomous robots. Equipped with anti-­ collision neurons called Lobula Giant Movement Detectors (LGMD),

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locusts capture and compute in a heartbeat the size of approaching objects (or peers) and their angular velocity, deducting their proximity and trajectory to escape the moment of impact (Hu et al., 2016). Comparable smart anti-collision systems are being implemented, from Autonomous Mobile Robots (AMRs)—used by companies like Amazon or Alibaba to sort and dispatch parcels—to highly automated driving vehicles. Flying cars can also look up to the inspiring bug for its robust yet flexible wings (Isakhani et al., 2021). Thermal cameras are of course still the best to avoid collisions in low visibility conditions (Zhang et al., 2022). If we look at the future of mobility, even though biking sounds like the healthiest option, in the snow, it might be less fun. Among the hyperloop, maglev, and other self-driving cars, what is yet missing is a swarm of individual vehicles clipping to each other to mutualize their energy to ride together (Fig. 6.7) . We can take the analogy of multifamily residential housing: People are ok to share a same building or road but want their own cozy apartment or vehicle.

Fig. 6.7  Innovation roadmap: Xiaomi (Courtesy of DervalResearch)

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6.3.3 Alliances for Smart Cities Developing broad-based partnerships—by involving multiple industries, various stakeholders, and local as well as global actors—can guide companies in their innovation roadmap. The idea is to identify the scope of the partnership with the impact areas and organize the possible responses in an action plan (Horan, 2022). Working with a food company expanding in Africa, we identified well-being, nutrition, biodiversity, urbanization, and economic growth as impact areas. The listed responses included tackling economic growth and urbanization with new opportunities for street vendors, nutrition, biodiversity, and urbanization with microbiome-friendly food products based on ancient grains. Note that impact areas and responses are often interlinked: Here urbanization will have a direct impact on both eating patterns and working conditions. Various stakeholders, from local Universities’ research centers to Microentreprises are now involved in the innovation roadmap. Achieving carbon neutrality is no easy task and Korea had to postpone the deadline from 2021 to 2050. The focus is now on Carbon Capture Utilization and Storage (CCUS). Understand that instead of not producing CO2 the idea is to focus their technology innovation roadmap on capturing it. The selected technologies include: the capture of CO2 exhausts, the chemical and biological conversion of CO2, carbon mineralization, and other by-product gas uses (Jung et al., 2022). Capturing CO2 with a little butterfly net makes little sense but converting or reusing it sounds like a plan. Especially as it will be rolled out together with climate change prediction and modeling, alternative energy sources, and investment in virtual reality and hazardous substances monitoring. Climate change might well in fact turn into a climate flip. In what is known as the Earth’s magnetic field reversal, every 200,000+ years, The North Pole and The South Pole swap. Geologists were able to date those flips via lava stone geochronology—as some layers present a reversed polarization. First, a couple of iron particles start rotating the other way around, until the whole planet’s magnetic field flips over a course of hundreds of years (Singer et al., 2019). The next reversal is long overdue, as the current chron (or period of time in between two geomagnetic reversals) called “Matuyama” is 780,000  years old (Horng et  al., 2002).

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Climate prediction would help identify and anticipate geographical areas that would be most impacted, even in the eventuality that CO2 emissions would be contained. While Korea surfs on green technology, South Africa bets on transformative innovation experiments to achieve  the  sustainable goals (Boni et al., 2021). And the city of Bangkok developed a mobility innovation roadmap for 2030  in six steps: environmental scanning, ideation, scenario analysis and development, analysis of business impact, strategy development, and roadmapping, which consists in linking business and technology. The two main opposing forces identified were growth (urbanization, population) and livability (pollution, health, accessibility). Different local stakeholders and smart city experts were involved, and each scenario came with an illustration, even the more dystopian ones depicting a very unfair city with super rich high buildings surrounded by slums (Gerdsri et al., 2022). The race for growth, by pushing the system to its limits, is challenging product innovation strategies. The innovation roadmap can help devise win-win-win situations (for people, the planet, and the company) by focusing on positive contributions rather than solely on growth.

6.4 Chapter Highlights –– Innovation requires an adaptive, ethical, and lean mindset, combined with a knowledge of the deep needs, the context, and the realm of possibilities –– The Xiaomi case helps devise an innovation roadmap for automated driving, taking into account the need for individual space and for cleaner energy –– A visionary yet sustainable product innovation strategy starts with grasping the needs and possibilities better than others and trying to positively contribute to the ecosystem and community roadmap This book comes with the complimentary Course Frontiers in Product Innovation Strategy: https://sn.pub/RcnzV5.  The 35mn Espresso course includes some highlights for each chapter, as well as a quiz and a certificate.

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References Açıkgöz, A., Demirkan, I., Latham, G. P., & Kuzey, C. (2021). The relationship between unlearning and innovation ambidexterity with the performance of new product development teams. Group Decision and Negotiation, 30(4), 945–982. Adeyanju, O. (2022, September 23). Binance appoints two Africans to its global advisory board. Forbes. https://www.forbes.com/sites/oluwaseunadeyanju/ 2022/09/22/binance-­appoints-­two-­africans-­to-­its-­global-­advisory-­board/ Al-Khusaibi, M., Al-Habsi, N., & Rahman, M. S. (Eds.). (2019). Traditional foods: History, preparation, processing and safety. Springer. AML. (2022). Home | AML Holdings Limited. http://www.automatic.com.hk Boni, A., Velasco, D., & Tau, M. (2021). The role of transformative innovation for SDGs localisation. Insights from the South-African “living catchments project”. Journal of Human Development and Capabilities, 22(4), 737–747. Derval, D. (2022). The right sensory mix: Decoding customers’ behavior and preferences (2nd ed.). Springer. https://link.springer.com/book/10.1007/978-3662-63795-1 Gerdsri, N., Sivara, K., Chatunawarat, C., Jaroonjitsathian, S., & Tundulyasaree, K. (2022). Roadmap for future mobility development supporting Bangkok urban living in 2030. Sustainability, 14(15), 9296. Gola, L. (2021). Unlearning. Netflix Stand Up. Gousgounis, Y. Y. L., & Neubert, M. (2020). Influence of packaging decisions on purchasing intention for home use medical devices-a multiple case study. International Journal of Teaching and Case Studies, 11(3), 223–237. Hope, G. (2022, August 14). Smartphone maker deploys 140 self-driving cars, demos humanoid robot. IoT World Today. https://www.iotworldtoday. com/2022/08/14/smartphone-­m aker-­d eploys-­1 40-­s elf-­d riving-­c ars-­ demos-­humanoid-­robot/ Horan, D. (2022). A framework to harness effective partnerships for the sustainable development goals. Sustainability Science, 1–15. Horng, C. S., Lee, M. Y., Palike, H., Wei, K. Y., Liang, W. T., Iizuka, Y., & Torii, M. (2002). Astronomically calibrated ages for geomagnetic reversals within the Matuyama chron. Earth, Planets and Space, 54(6), 679–690.

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Hu, C., Arvin, F., Xiong, C., & Yue, S. (2016). Bio-inspired embedded vision system for autonomous micro-robots: The LGMD case. IEEE Transactions on Cognitive and Developmental Systems, 9(3), 241–254. Isakhani, H., Xiong, C., Chen, W., & Yue, S. (2021). Towards locust-inspired gliding wing prototypes for micro aerial vehicle applications. Royal Society Open Science, 8(6), 202253. Jodlbauer, H., Tripathi, S., Brunner, M., & Bachmann, N. (2022). Stability of cross impact matrices. Technological Forecasting and Social Change, 182, 121822. Jung, S. H., Kim, H., Kang, Y., & Jeong, E. (2022). Analysis of Korea’s green technology policy and investment trends for the realization of carbon neutrality: Focusing on CCUS technology. Processes, 10(3), 501. MAIF. (2022). Notre histoire. Entreprise MAIF. https://entreprise.maif.fr/entreprise/notre-­histoire Milne, A. (2020, February 26). George Clooney ‘saddened’ over Nespresso link to child labor in Guatemala. U.S. https://www.reuters.com/article/us-­britain-­ slavery-­coffee-­idUSKCN20K20X. Noodelist. (2022, May 19). Celine Haga – Pro MMA fighter powered by Noodelist. https://www.noodelist.com/blogs/news/celine-­haga Pandaily. (2022, September 2). Xiaomi’s first car will use Hesai’s LiDAR. https:// pandaily.com/xiaomis-­first-­car-­will-­use-­hesais-­lidar/ Shah, H. (2022, August 25). Forbes China recognizes Xiaomi for ESG practices. Pkrevenue.com. https://pkrevenue.com/forbes-­china-­recognizes-­xiaomi-­ for-­esg-­practices/. Singer, B. S., Jicha, B. R., Mochizuki, N., & Coe, R. S. (2019). Synchronizing volcanic, sedimentary, and ice core records of Earth’s last magnetic polarity reversal. Science Advances, 5(8), eaaw4621. Tan, T. (2022, May 1). How to cook ramen noodles: 15 steps (with pictures). wikiHow. Retrieved October 18, 2022, from https://www.wikihow.com/ Cook-­Ramen-­Noodles Tanaka, Y., Nagano, H., & Taimura, A. (2020). Body cooling effects of immersion of the forearms in high-concentration artificial carbonic acid water at 25° C. Journal of Physiological Anthropology, 39(1), 1–9. The Nobel Prize. (2021, October 4). The Nobel prize in physiology or medicine 2021. NobelPrize.org. https://www.nobelprize.org/prizes/medicine/2021/ press-­release/

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Conclusion

Frontiers in Product Innovation Strategy invite us to look at the market from a fresh angle and suggest different ways to solve business challenges, notably by: –– Innovating with impact to deliver people and planet-friendly solutions –– Understanding customers’ deep needs to unveil hidden opportunities –– Thinking by analogy to locate profitable markets –– Growth hacking to define sustainable strategies –– Arranging a cohesive range of products to optimize the product portfolio –– Designing a visionary innovation roadmap to predict market outcomes and create winning products for people and planet-­ friendly futures I hope the business cases, scientific findings, market insights, and frameworks shared throughout the chapters will inspire you, your team, organization, and eco-system to slightly change the path and build a responsible Product Innovation Strategy together.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 D. Derval, Frontiers in Product Innovation Strategy, Business Guides on the Go, https://doi.org/10.1007/978-3-031-25823-7

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Ethics, sustainability, adaptive management, biosciences, science, fiction, quality, risk management, bricolage, SDGs/ESG/B Corp/[you-­ name-­it], biomimicry, anthropology, unlearning, and neurosciences, are as many tools that can help you reach your destination taking the most responsible route, that often ends up—in a major plot-twist—being the most rewarding route too. This was my tiny contribution to your huge effort in perspective and I look very much forward to hearing about your great initiatives!