Making Innovation Happen: An interview with Costas Papaikonomou

 

Costas Papaikonomou is delivering the Keynote Speech at the LiT (Leaders in Technology) Summit on 28th June in Cambridge. An author of several books on innovation and the Co-Founder of the Amsterdam-based innovation agency, Happen, in this interview we ask him a few questions about innovation, the challenges, and potential of trying to make new stuff happen.

Costas tell us more about Happen?

At Happen we’re obsessed with innovation as a business tool for growth. So not innovation for the sake of it! Back in 2007, we wanted to set up an agency to put innovation in a different context as larger companies tend to find it harder to innovate as transformative innovation tends to come from new start-up businesses with nothing to lose.

Disruptive innovation usually doesn’t come from established companies as they have cash cows to protect, their chief worry being a loss of margin. The paradox: businesses often believe disruption is the only way to innovate, are paralysed by efficiency losses, yet completely overlook how small changes might help them gain market share as well. It is a funny fact that consumers are not necessarily triggered by ‘newness’, they’re triggered by solutions to their frustrations!

What is the best way to innovate?

By managing trial and failure in two simple areas: what are your customers’ real needs and what commercially viable solutions can be found to answer them. I guess the business that manages to achieve both is best positioned for the future. In order for this to be effective people will need to understand that managed risk is OK. But if you are only innovating to protect your market share then the innovation will only ever be minor.

By starting to innovate, you readdress your future. Large corporations shouldn’t bet their future on one big idea unless their back is against the wall. It’s way more effective to grow with a continuous stream of smaller bets.

Unfortunately, even with minor bets, many organisations still treat them as big risks. A lot of our work in helping business innovate is about helping them manage that risk correctly.

Your particular expertise is within packaging innovation, what do you see changing?

Consumer behaviour has really changed in the past 8 years or so. It began with the 2008 recession and a reduction in trust related to behaviour associated with bankers and so on. This distrust now extends to the largest consumer businesses and even brands to some extent – people just do not necessarily believe what they are being told in advertising these days.

In line with this, for the food industry, there is a big growth for ‘free from’ products where people want to avoid gluten for instance. This doesn’t necessarily mean people are much more informed but they have a belief in mother-nature and that all processed food is evil.

The interesting thing is that they are willing to pay more for these products so there is a commercial opportunity for this trend and it gives entrepreneurs a chance to enter the market in a localised way.

There is also a shift in people’s view of carbohydrate v protein. We have been told for years by the food and health industries that carbs and low fat are good. However new insight has challenged this received wisdom. Now, we are currently in the midst of a food revolution and some of the established large players are not necessarily set up to respond to this change.  The smaller companies can do it and this is where we are seeing smaller companies that do not necessarily have anything to lose in the industry disrupt and gain market share.

On the other hand, there is also a big growth in demand for value shopping of private label goods (private label brands are owned by the retailer). And this is where we see the rise of Lidl and Aldi. Shoppers are liking the lower cost, but also the simple experience when they shop. Typically Lidl will have 3,000 products in stock, and this is much lower than a Tesco’s for example which has ten times this and this sometimes presents the consumer with far too much choice.

So innovation is easier when you don’t have a reputation to protect in a particular market?

Yes. If you think about it, for Apple with the iPhone, they had nothing to lose as they had no phone in the market. Disrupting the phone category would not upset their core business. So perhaps people in packaging businesses need to look at digital printing differently and disrupt their own perception of the market. They tend to view things purely as mass packaging. They may think that if you have an analogue plant you are putting yourself at risk by cannibalising your own business but it goes to a really personal human level.

So for inkjet in packaging what will it take for people to accept this change?

As with any change taking hold it can be frustrating and requires patience but the reality is that one big name will take it on, and then everyone will shift. If you take digitally printed labels, once Coke did it then people started looking at it. So once we get P&G and Unilever adopting it then the revolution will really start.

How does Happen disrupt?

We are trying to disrupt the market research industry by using 100% data based online using a different, and we think a much more accurate way of analysing opinion and behaviour. This new model looks at all the conversations without the individual being prompted and this gives better less impartial data.

Whether it’s household cleaners, cough syrups or cookies, there are hundreds of thousands of mentions online. We can now effectively analyse this data, without having to prompt with questions. Therefore it is more truthful, honest and higher quality as people are not feeling they have to be polite or give answers about products they don’t care about.

Isn’t this currently available?

No, only the info going back is the number of likes and shares but not comments. Likes and shares is a fairly one dimensional way of measuring anything. Our new tools unpick what people are talking about, how they feel about them and why that is. It’s like being handed an innovation brief on a silver platter!

For more information on Happen

If you are interested in seeing Costas speak at the Leaders in Technology Summit on 28th June, in Cambridge, then check out the programme here