Assuming this is truly the end of the recession, we can all look forward to a spate of product innovations unlike any since World War II. These products will solve previously unknown problems in brilliant new ways and make their manufacturers millions. If you’re in the business of designing, making or delivering products, the anticipation can be thrilling . . . or daunting.

After all, how exactly do you innovate? Tons have been written on the subject, and yet innovation still comes off as requiring either genius or black magic. If your company lacks a systematic framework for doing innovation, it’s not prepared for this new global economy.

Here’s ours. It’s not really magic: it just works that way.

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Buyers are complex, goal-driven analyzers and organizers of the world around them who are uncompromising when assessing their own experience. Our machine lets you design or adjust that experience by turning a few metaphoric dials.

Here’s how it works. People buy products to achieve outcomes. But rarely can they achieve those outcomes with a product alone. Products often need other products or services to form more complete systems, which in turn may need some kind of infrastructure (e.g., electricity, a road, etc.) to make the product go. Even then the user may need other requisites to use the product — anything from additional people to specialized skills. And of course, not all users are the same. They may use the product in very different contexts — for different purposes, in different environments, in different time frames.

When people evaluate a product, they weigh the outcomes achieved against the requisites required. Whether you’re a product manager, CEO, engineer or whatever, your job as an innovator is to maximize the outcomes while minimizing the required requisites. You do this by modifying the product, the system or the context in which it’s used.

Let’s take an easy one, Coca-Cola. Coke didn’t come in bottles until someone imagined users consuming it in a context other than the soda shop. That idea led to eliminating the requisites of a soda fountain (infrastructure) and the skills to use it — dramatically changing the outcome-requisite equation. Questioning the system comprising grocery stores led to vending machines. Rethinking the purpose led to Diet Coke.

Innovation can be hard to come by if you try to ideate too much at once. Instead focus on very discrete aspects of the user experience as defined in our innovation machine. It works, like magic.

I was having a heated discussion (and a few margaritas) with dear friend about the merits and perils of entering a category after it has fully formed. On one side, you have the opportunity to be a fast-follower. On the other, you can just as easily become a failed-follower. In the end, I believe there is nothing inherently good or bad about being a late entry, provided you position yourself according to your timing.

Almost every product or service exists in a category along side similar products or services.  Just as products have a life-cycle from introduction to discontinuation, so do categories. The goal of positioning should always be a move toward category dominance (Technically, that’s when your product has twice the market share of any competitor).  Your positioning strategy should be guided by the timing of your entry into the category.

The following illustration shows the relationship between positioning strategy and timing. I’ve borrowed the adoption life-cycle curve from Geoffrey Moore’s Crossing the Chasm. It describes the number of new buyers entering the market for products in a category — not the lifespan of the category. (A category can go on for decades even if no new buyers are entering the category.)

On top of Moore’s lifecycle curve, I’ve overlayed four different positioning strategies — each coinciding with a specific point in the category’s maturation.

A new product can be launched (or repositioned) in a category at any point in the lifecycle.  How you position the product should be based on when it’s launched.

Market-forming strategy:  A useful definition of a market is “a group of people with a common problem who reference each other.” A market forming strategy identifies groups of people who don’t yet realize they have a problem and may or may not yet reference each other, but they have the potential to come together around an innovative idea and form a market — e.g, FedEx or Starbucks.

Category-creating strategy:  Most new products are clumsy, incomplete, flawed in ways that contribute to their getting stuck in what Moore called the Chasm.  If the shortcomings are real, a second-mover might exploit them and turn a quirky technology with limited appeal into a significant new product category.  I can think of no better example than the iPod. It isn’t just an mp3 player: along with iTunes and the iTunes Store, it’s an entire personal music system, the like of which never before existed.

Benefit-surfacing strategy:  Once the category has caught fire, you can’t expect to get in front of it without offering a fundamentally different reason to buy.  Amateur golf was enjoying a surge in popularity about the same time Callaway introduced the Big Bertha.  While other clubs touted distance and control, Big Bertha offered forgiveness — exactly what the amateurs needed, even if they previously didn’t realize it.

Delivery-differentiation strategy:  New products can be launched even when the category is fully matured and the number of new buyers is waning.  But the focus needs to shift from the product to the way it’s delivered. Laggard buyers often lag because the product benefit doesn’t outweigh the hassle of getting and using it. This is not the time for a faster, better, cheaper product; but faster, better, cheaper system for acquiring and using it.  In other words, Amazon.

Late in the lifecycle, new benefits and even better delivery systems tend to take a back seat to price.  The goal should be to so significantly change the user experience that it’s no longer comparable to its original category.  For example, Miller Lite is not a beer; it’s a light beer.

It’s an old story…

Guy goes into the hardware store looking for a drill bit. Every marketer in the world will tell you: this guy doesn’t have a drill bit problem, he’s got a hole problem, just like we all learned in Marketing 101 — you don’t sell features (drill bits), you sell benefits (holes).

Only thing is, that’s not the whole story.

Focus solely on features and benefits and you might be blindsided into offering products that, for all their “superiority,” don’t add up to a superior brand experience. For that, you need to understand context:

• Who are the users of your products?
• What purposes do they use them for?
• What are the systems your products are used within?
• Do you own these systems as well?

By understanding context, you can provide a balance of features and benefits that add up to brand success. How do you get there? It takes a methodology that pulls together the elements of context, systems, products, requisites and desired outcomes to create a blueprint for user experiences that push your product way up the x axis of Brand Significance.

The iPod is a great example.

Apple didn’t simply provide a cool music player (features). And it went well beyond providing an anywhere/anytime personal music system (benefits).

Apple understood how people experience music in the context of their daily lives, and provided an entire system that delivers the experience in three, seamlessly integrated products whose features are perfectly suited to their unique needs: listening (the iPod), organizing (iTunes) and acquiring (the iTunes store).

The result is unparalleled brand experience that enriches people’s lives — and Apple’s pocket book.

It’s easier than ever to satiate our needs and wants. There are more products in more focused categories delivering higher quality for less cost than ever. We’re less willing to offer our allegiance to any product when a better one is likely in the offing.

Product or category leadership is an increasingly specious objective. Simply deliver a superior product, and you’ll be rewarded with an onslaught of competitors and the pressure to make your product both cheaper and better — a battle for market share where margins are the casualty.

Those who do become leaders are increasingly hard to categorize. Apple Inc. dropped the word “Computer” from its name in January 2009. Rather than pursuing leadership through product excellence within the commoditized computer category, it pursued a strategy of bringing enrichment to people’s lives through creativity, music and self-expression.

Similarly, after Harley Davidson successfully petitioned the International Trade Commission for a 5-year tariff to protect its outdated motorcycles against low-cost Japanese imports, it did very little to make its products technically competitive. Instead it took the opportunity to make cartilage-compressing vibration and oil leaks an identifying part of the brand experience, and gave a market of Reagan-era white collar professionals something more — a culture they could proudly belong to — one that artfully melded Reagan’s 50s-era patriotism with an outlaw rebel persona.

We call the kind of loyalty enjoyed by Apple and Harley Davidson “brand significance.” Brand significance is not the result of branding. It is achieved by a combination of two, uniquely integrated accomplishments:

1. inventing a culture that brings meaning to people’s lives; and
2. providing a personally enriching experience that reinforces the culture.

The relationship between meaning, enrichment and significance can be illustrated as follows.

The company’s goal is to push its coordinates up and to the right by finding ways to make the brand more culturally meaningful (y axis) and personally enriching (x axis), resulting in the highest possible brand significance score.

The mechanisms for doing this work will be explored in other posts. First it’s important to see that significant brands go far beyond serving the needs of individuals and their current cultures. Equally important: brands should pursue this by design, not hope to get there by magic.

There was an e-marketer named Sam
Who didn’t know “opt-out” = SPAM.
His customers rebelled
And his goods didn’t sell
And now there’s nothing left of his brand.

We were all so excited when the Russian market opened up.  Then after a few containers of Levis and Marlboros set sail, it seems like the party was over.

The Chinese people will soon be buying a lot of stuff.  I’m just worried it won’t be American stuff.  Much of what they need they can make themselves, for less. Some would say, if we are becoming a service economy, we don’t need to make anything anymore.

I would argue, if we want play in a global economy anchored by China, we need to make something — specifically, the one thing we know how to make better than anyone in the world — brands. But not American brands. We need to make Chinese brands. Things Chinese people want to buy because they represent being Chinese.

That means understanding the needs and motivations of people unlike ourselves — which doesn’t come naturally to most Americans.  But it does to American marketers.

Felix Hoenikker, the world-famous scientist in Kurt Vonnegut’s “Cat’s Cradle,” shirks his duties as “father of the atom bomb” because of…turtles.

You see, Felix had a tank of pet turtles in his laboratory, and he just couldn’t tear himself away from them. Playing with turtles was such a big draw for his attention that the Manhattan Project staff removed them from the lab so he could focus on work.

Applying that metaphor to the real world, let’s examine some of the turtles in today’s marketing tank: Facebook, LinkedIn, Twitter, YouTube, blogging.

I’m not proposing these things are not valid work. It’s just that, in a 3.0 world, the foundations of a business relationship system lay elsewhere, and are more important than ever…

• Understanding the company value proposition  —before blogging about it
• Attending to customer service — before setting up a Twitter channel for it
• Making products truly great — before setting up FaceBook fan pages for them

It’s worth remembering that turtles can be dangerous; if you’re not careful, you might get bitten.

Now, if you’ll excuse me, I’ve got to get back to Mafia Wars…

One of the great things about starting Dangerous Kitchen is the opportunity to reinvent our methods and approaches to marketing. Today I’m rethinking the creative brief.

The template I use is a compilation of ideas from some truly great strategists and creative directors. I like it because it’s tight: just 5 questions.

1. Who are we talking to?
2. What do they currently think?
3. What do we want them to think?
4. Why should they believe it?
5. How is the message being delivered?

But it has a major flaw, specifically question 3, What do we want them to think? This could imply that the creative should change the consumer’s mind. That’s not only impossible, it’s . . . well, dangerous. It is the marketing equivalent of arguing with your customer.

For example, I suspect people will continue to think Toyotas are more reliable than Fords — despite the recalls. And the 30 years of “Quality is job one” advertising won’t help Ford usurp that spot. Ford stands for found on road dead and fix or repair daily because Ford argued with consumers — telling them their perception of poor quality was wrong.

Here’s my fix, and I welcome your feedback. Our job is not to change what people think; it’s to ask them to think something new. In other words . . .

3. What would we like them to think — that they haven’t already thought of?

If the message is remotely plausible, they might just believe it.

Like this: Tell me the company that makes powerful Mustangs and F-150 trucks also makes the most powerful hybrids? I’ll buy that.

Welcome to the kitchen.

There’s not much to this post.

It’s a simple test to make sure our engines are purring, the windscreen is clear and the seats are comfy yet firm.

Enjoy the ride.

- The Management