Growing The Core – Innovating With Constraints – Riffs on technology, marketing & culture

In his latest book called Grow The Core, David Taylor makes a definitive case for companies to bring back focus to their ‘core’ business and thereby SMS (Sell More Stuff that is already being made). He identifies 3 key drivers for this ‘core growth’:

Distinctiveness: Creating a distinctive marketing mix for the core to strengthen and drive brand salience
Distribution: Boosting distribution / ‘go to market’ via new and relevant channels
Core Range Extension: Launching value added extensions to the core-offering

This ‘back to basics’ exposition has been featured as cover story in the latest edition of Market Leader magazine. Don’t s miss it.

Successful companies are seen to be doing this really well. For example Kethcup & Sauces with sales of more than $5 billion globally (FY ’12) constitute the ‘core category’ for Heniz (source). In the 2012 Annual Report William R. Johnson CEO of Heinz proudly states (as if to prove the theoretical underpinnings of ‘Grow The Core’ framework)

Notably, we are proving that Heinz® Ketchup is far from mature after 136 years. In Fiscal 2012, our Global Ketchup business delivered excellent sales growth of 9.7% through innovation, increased distribution and continued expansion in Emerging Markets.

Implication for Innovation

The key insight for me here is about the possible implication that this “Focus & Grow The Core” strategy has for ‘innovation’. I guess focusing on the core and driving its growth needs an innovation strategy that is driven by tough and uncompromising choices. Tough choices based on questions like: “What should we stop doing?”, “What should we further strip away from our new offerings in the pipeline”, etc. This might require what is called as “Innovation with Constraints”.

2 Examples:

1. Lego

A decade ago, Lego‘s balance sheet was in ‘red’ and part of their problem was doing too much – Lego had over diversified by moving into theme parks and clothing. And the once primary coloured bricks now came in a palette of 100 colors.

In 2005, one of the first questions the new CEO Jorgen Vig Knudstorp asked was,“What should we stop doing?” Lego sold the Legoland theme parks and halved the number of colours of bricks they were making. They began asking their designers to innovate with constraints, but to leverage those to become even more creative. Lego returned to profitability that same year. (source)

2. The Economist

With the advent of iPad (and tablets) while many magazines were quick to launch their iPad Apps that were decidedly rich in their interactive multimedia possibilities (videos, hyperlinks, gifs, dynamic graphs, audio etc), The Economi st tok a dramatically different approach to appeal to its target group – The Mass Intelligent.

They defined their strategy as Leanback 2.0 and went about designing a magazine App for iPad that facilitates a real, simple, unfettered ‘Lean Back’ experience for its readers. What does it mean? Andrew Rashbass – CEO of The Economist Group says this meant a conscious editorial decision to strip out even the their basic web innovations from their iPad App (let alone introducing something new).

(Source)

Result: A reading experience that is more focused, uncluttered and distraction free. Go through this insightful presentation by the CEO and read how radical simplicity and ‘finishability’ constitute the cornerstones of their Leanback 2.0 digital strategy.

Do you know of any other examples where a brand chose to focus on its core and made tough choices on its offerings or where a brand innovated within constraints to remain truthful to its core?