Innovation Motivation: A Quick Analysis

BottleOne-PET-Bottles-Sustainability

Written by Bill Duelge

May 28, 2024

As a primary package, BottleOne technology lives in a world of high stakes brand management and brand equity. Brand management is a very sophisticated, complex, and nuanced profession that supports and grows brand equity. Asking a brand manager to change their primary packaging is a big ask, and is never done lightly.

I’ve recently watched a client in Puerto Rico successfully innovate with their Cristalia family of water products, and thought their success was deserving of deeper analysis of the motivations that come into play when primary package innovation is under consideration.

Before I tell the rest of the Cristalia story, I’d like to break down the three motivations a brand manager may have when thinking about adopting innovation.

The first motivation is Ambition. I would define this motivation as a willingness to innovate even if there is a risk of self-obsolescence. Ambition motivated leaders have the vision and insight to innovate in order to attain a different and better future for their enterprise.

Their calculus shows a manageable risk for a disproportionately high reward.  Ambition motivated enterprises innovate because they can, not because they must. From their perspective, innovation is worthwhile because it is what should happen. Examples abound.

Henry Ford is quoted as saying, “If I would have asked people what they wanted, they would have said faster horses.” A more modern example is Apple, who created entirely new categories of personal electronic devices by creating the iPhone, the iPod, the iPad, and the Apple watch. There was no unfilled demand for these devices. These innovations created their own categories of users who themselves constituted consumer demand.

Return on investment for enterprises driven by ambition is orders of magnitude higher than those of enterprises with alternative motivations. Growth in market share and earnings for these enterprises is nearly always above historical benchmarks.

It takes a lot of courage to innovate when there is no external pressure.  Every great company has faced an inflection point that required leadership and vision and ultimately recast their future. In spite of those results, innovative change for ambition motivation is shockingly rare. Risk tolerance is simply too low.

The second change motivator is Fear. Fear is a powerful motivator, though almost never a driver for innovation. Enterprises that recognize a threat to their business, product, or service are motivated by the fear that they will be forced to change at some point in the future.

Delay is often the first reaction to fear. That’s not an indictment, but what the fear motivated enterprise needs above all else is “more time.” More time for analysis, more time for diagnosis, more time for decision making, and if necessary, more time for executing change.

More time to raise capital, more time to overcome obstacles, and more time to reinforce the bunker from which they operate. The hope is that more time will stall, and perhaps even eliminate, the need to change.

If I sit in front of a potential customer to discuss my new-to-the-world technology and they spend the first 30 minutes talking about why it won’t work, I know they are operating from a foundation of fear.

Notice that I have not yet mentioned confronting and overcoming the fear that would precipitate change. Those actions won’t happen until the can is kicked all the way to the end of the road. It is futile to try and bring this type of customer to a decision. The focus should be on education and building trust.

The overwhelming number of companies fall into this category culturally, and they will eventually become large scale adopters of innovation. It is quite likely; however, that these companies will be victims of innovation before they themselves innovate. Company cultures that are fear motivated are worthy of ongoing education and relationship building, but resource commitment should be done cautiously.

No one wants to be the can that gets kicked down the road.  Return on investment for innovation at these companies is always denominated in terms of break-even analysis. In that spirit, when the clock runs out on fear motivation and the threat remains, these companies have only two choices at their disposal. They will change, or they will exit.

The enterprise becomes Crisis motivated to change. This crisis can be internal to the business operation, including things like loss of a major customer, loss of price competitiveness, or loss of a market opportunity.

We saw this kind of crisis change motivation quite often during the pandemic. Companies adapted or they died. Often, crisis comes from external sources such as regulations and laws, even geopolitical events.

Crisis motivated companies are always open to innovation. They have already decided to change. The question comes down to whether they adopt an existing solution or whether they employ a new innovation.

Time was the goal of the fear motivated enterprise, but time is the enemy of the crisis motivated organization. The singular focus of the crisis motivated enterprise is execution of a solution, making them excellent candidates for innovation. Measures of success are typically limited to compliance and continuity of business operations.

My business, plastic containers, offers a perfect example of how fear turns to crisis and precipitates change. For the last twenty years or so, there was a looming threat that packaging would be mandated to include a defined percentage of post-consumer recycled content.

The technology to meet these requirements was settled early on, and has been built upon aggressively throughout this period of time. Adding post-consumer content to a package today is routine.

Against the backdrop of recycled content mandates, ambition motivated companies purchased equipment capable of using recycled content as a normal course of their capital spending even if they did not use recycled content. This spending provided motivation to OEMs to offer systems capable of operating with recycled content and pushed all parties further along the development curve.

For companies with ambition motivations, the threat was mitigated because they operated with deliberate intent to mitigate the threat if it were to materialize. Fear motivated enterprises did due diligence on the threat of recycled content mandates. Some even put together contingency plans in the event the threat became actionable.

Today we wake up in a world where a half dozen states are rolling out recycled content laws and another dozen are considering similar legislation. These laws will prevent the sale of products in packages that do not have the required level of recycled content.

The fear motivated cohort immediately petitioned for exemption, and in some cases got one. Every day the clock moves one tick closer to their transition from fear to crisis motivation.

For some packagers, especially those in the food and beverage categories, this is now a full blown crisis. The decision is now whether to walk away from 10-30% of their market opportunity, or to make a change to get compliant.

Keep in mind that industry innovators solved the technical challenges of this problem twenty years ago. Fear motivated enterprises spent the last twenty years in fear of the mandate and have now become the crisis cohort. Many are still in material classes that were identified as problematic decades ago.

Regardless of the appetite for innovation, there is no shortage of companies in need of partners to navigate a successful future. That is where we come in.

Allow me to return to my initial focus, the inflection point faced by the leadership at Pac Tech, the Diesco company that bottles Cristalia. Organic growth at Pac Tech necessitated relocation to a larger facility, but the one gallon HDPE bottles did not generate reinvestment economics.

There was little motivation to put the old equipment into the new facility. Having attended a press conference featuring BottleOne back in 2019, the leadership had long held a vision for the technology in their market for water gallons.

Some companies would have figured out a way to salvage the HDPE production line from the old factory. Some companies would have bought new HDPE production equipment, the equivalent of Henry Ford’s “faster horses.”

Pac Tech decided to leapfrog every competitor in their market by launching Cristalia in BottleOne technology. No more HDPE bottles in brown boxes to manage, no more me-too price competition. Just the most beautiful and sustainable water gallon in the business.

It is said that the best way to win in the future is to create a future in which you win. Pac Tech, applying the finest attributes of ambition motivated change, has done just that. If early returns are any indication, there will be some new motivations amongst their competitors in the near future.

Where does your company fall on this scale of innovation motivation? Does your answer have more to do with company culture, or is it something bigger? Is internally generated innovation treated differently than externally generated ideas? Is there a discrepancy, when viewed through the lens of innovation, between the way your company sees itself and the way it behaves?

I’ll take a closer look at these questions and more in my next blog, please stay tuned.

0 Comments

Submit a Comment

Your email address will not be published. Required fields are marked *

Pin It on Pinterest