Longtime industrial companies address ‘innovation’ at mPlanet conference

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Orlando, Fla.—Four marketers from large industrial companies—including three representing companies each more than a century old—spoke about innovation in b-to-b markets in a session Friday at the American Marketing Association’s mPlanet conference.

“The popular media would have you believe we need to innovate or die,” said session leader Dan Henson, VP-CMO of General Electric Co. But, he said, most of the examples of innovation come from the b-to-c realm, such as Apple Computer’s wildly popular iPod.

“At GE, we’re not bad—we did that whole lightbulb thing,” Henson quipped, adding that 70% of GE’s current businesses were launched in the last 30 years.

Still, Henson said, the emergence of a “truly global economy,” compressed product life cycles and a very high penalty for low growth rates were challenges GE and other industrial companies had to confront. In GE’s case, long-range (three-year) planning and “innovation labs” involving employees, customers and partners helped the company innovate, he said.

Kathy Button Bell, VP-CMO at Emerson Electric, touted her company’s use of a “very disciplined measurement process” but said that at least one metric—new-product introductions—turned out not to be aiding innovation or growth goals. While the company was hitting its new-product introduction targets, it might have been missing some big opportunities, she said.

“The No. 1 problem is around climate, culture,” Bell said, adding that “the older you are, the more successful you are—the harder it is to change.”

Emerson took a deep look at its customers with an extensive survey asking about the qualities of a “perfect supplier,” she said. Interestingly, 70% of respondents ranked service, rather than technology or product innovation, as the most-desired characteristic. The company is now making sure to fund service and customer education initiatives around its new-product launches, she said.

Innovation has driven 204-year-old DuPont Co., especially in the past 60 years, with the invention of nylon and Teflon. But the company was somewhat stuck in a “big bang” mentality, said Michael Kullman, director of corporate marketing. Now the effort is to push for incremental innovation as well, he said.

One organizational improvement at DuPont has been the creation of market teams that can look across product categories. This, Kullman said, has been “a huge cultural change” and “a little bit messy.” Another big change, he added, has been the decision to partner with other companies around new products. “Holding this together is our knowledge of these market segments,” he said.

At IBM Corp., under new Chairman-CEO Samuel J. Palmisano’s leadership, one change has been to embed junior staff within strategy teams that formerly only included senior managers, said Anil Menon, VP-marketing and strategy. This helps imbue these groups with a customer focus, he said. Like DuPont, IBM has embraced the strategic value of partnering. “Can we develop these things in-house? Yes,” Menon said, but often not at the price point, or as quickly as or in a way that customers want.

—Ellis Booker

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