The Wall Street Journal‘s Dennis K. Berman wants to know if “innovate” just means “stay competitive.”
When Hewlett-Packard executives addressed shareholders on an Oct. 9 conference call, they used innovation 70 times.
At a Nov. 20 presentation by Red Robin Gourmet Burgers Inc., executives, speakers mention the words innovate or innovation 21 times to describe, variously, pepper hamburger buns, beer-can cocktails and beer milkshakes.
What initially caught Berman’s attention was Kellogg’s Gone Nutty! peanut butter Pop-Tart, which CEO John Bryant described as an innovation, as opposed to “a product extension or upgrade.” In a way, innovation has become a proof point of sorts.
During my research into the vodka industry, a top advertising executive mentioned to me “proof points”—words that consumers supposedly are drawn to and that help them make purchasing decisions. In the spirit world, proof points include “single-barrel” and “five-times distilled.” You gotta have them. Likewise, products have to be innovative, even if they aren’t (at least by definition), in order to bolster investor confidence.
By definition, “there aren’t a lot of breakthroughs,” says John Hoffecker, a managing director at turnaround firm AlixPartners who has spent years around the auto industry.
A product extension “is different colored diapers. You haven’t changed the functionality, cost or quality. It affects nothing in a significant way.”