What’s all the Buzz about the Buzz Word: Innovation

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By Sue Brady

Brain Lately, every other article I read is about this ‘new’ concept of innovation. And of course it’s an important topic. Companies that don’t innovate grow stale and ultimately go out of business. Innovation is not a new concept. Light BulbGreat innovators are a part of the history of the world: Eli Whitney, Henry Ford, Hedy Lamarr, Charles Goodyear, Madam Curie, Steve Jobs. There’s no reason that the next big idea can’t come from you or from someone at your company.

How can companies get better at it? It takes the right environment. I’ve written about improv in the work place before (here). In improv, the actors are making up funny skits on the fly. The key to good, funny, successful improv is teamwork. It’s where the expression ‘yes and’ comes from. It means you always support your fellow actors. You build on their thoughts and ideas with a ‘yes and’ attitude. For instance, if a fellow actor points to the ground and says my feet are getting wet, his teammates don’t say ‘that’s impossible’ or ‘no they’re not.’ They say something like ‘yeah, it’s sinking faster than I thought it would.’

How does this relate to corporate life? Fairly easily. If you want to promote creativity, you need an environment where that kind of thinking is encouraged. And you do that by educating employees on what it means to act as a team, support the ideas of others, and expand on the ideas of others (yes, and…). No judgements allowed.

It sounds easy but in order to make it work, employees need to feel safe and free from ridicule. You need everyone to speak up. The next big idea might start as a seed from something someone says or suggests.

Here’s an example from AOL. Remember those annoying pop-ups? Why did AOL keep those? Bottom line is, they were profitable. Sometimes, as a user, you saw something you were really interested in buying. Not all of the time, but sometimes. And AOL figured out not just that an online store was a good idea, but that it could be better if it was ‘pushed’ out to users, rather than waiting for them to come to find it themselves. What an innovation! Did some people hate it? Yes, and that created an environment where innovators came up with ad free services, pop-up blockers, better targeting to ensure you did see ads you were interested in, and remarketing based on where you’d been searching online. See how that works?

Try it at work. Set up a brainstorming meeting to innovate the next thing to offer your customers. Keep the room free of judgment. Try some exercises where you teach the room how to be a ‘yes and’ participant. This link will open as a word doc and this article has some improv exercises as well. Embrace free thinking and don’t judge. You can evaluate the ideas later.

Learning how to use improv in a work setting will have long-term benefits that will show up as creative business innovations. Give it a try!

What Shake Shack Can Teach us About Marketing

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By Sue Brady 
Shake Shack

Shake Shack came from humble beginnings, just like so many successful businesses. Starting out as a hotdog cart in 2001, it took 5 years for the owners to open up their second cart. Last week on January 30th, 2015, Shake Shack launched a successful IPO and raised $90 million with a company valuation of $1.63 billion. There are now 63 shacks in 9 countries, and they plan to open 10 stores a year.

Their food is high fat and high calorie in a time when consumers are demanding healthier choices. Yet they are unquestionably successful. Did they use marketing to hype up the brand? Did they buy space ads and DRTV spots to let the world know they were coming? Did they buy a TV ad to run during tonight’s Super Bowl? The answer is pretty much a solid no.

So what’s driven their success? It seems to be almost 100% grassroots marketing. They value neighborhoods and community, and mostly, they seem to have figured out what their customers want (customer obsessed!). They integrate with the neighborhood when they open a store front, using neighborhood businesses as suppliers (including items from the local bakery in their frozen custard for instance). They use reclaimed materials to make their tables.

Word of mouth and social media has been and will continue to be Shake Shack’s friend. Per an email from their Marketing Director sent to Ad Age:

“We began at the time when social media really took off. We focus on fun and engaging social media, in-Shack messaging, PR and selective advertising.”

If you scan their Twitter feed (a modest 36,000 followers – compare that to McDonald’s almost 3 million followers), a large number of their tweets are in answer to questions about the possibility of opening a Shake Shack in an area where they don’t currently do business. They use Facebook as well and have over 130,000 ‘likes.’ They have giveaways and live tweet where their carts are in Manhattan.

Shake Shack launched with no plan. They opened their first cart to support a local art project in Madison Square Park, with no idea of a future. Long lines lead to more carts (the 2nd one opened 5 years later) and eventually to brick and mortar locations.

One of their key differentiators from other fast food joints is that their meats are organic and antibiotic free. They use 100% Angus beef in their burgers. They don’t precook their food to make the lines move faster. And that seems to be why customers will wait an hour, or longer, to order and consume a burger.  (They have a webcam so that fans can view the line in Madison Square Gardens before heading out -though it’s not up at the moment.)

Another differentiator from say a McDonald’s is that they don’t franchise. Their strategy is to be the anti-chain. The New York Times called Shake Shack the “anti-chain chain,” in Dec. 2009.

The CEO has acknowledged that they are likely to spend more on marketing in the coming years as they expand into new markets. They currently use in-house designers for their creative, though I expect that’s likely to change as they get bigger.

Generous employee benefits certainly are helping with the buzz. They pay better than minimum wage, with starting salaries in NYC of $10/hr (and at least $9.50 elsewhere). They offer health care benefits (health, dental, vision, disability and 401k ) for employees who work over 25 hour/week. They pay Shack Bucks each month to give employees a share of the company’s topline sales for that month (up to 1% of total revenue). These strategies breed loyalty. The managers all received options in the IPO and could all purchase stock at the IPO price.

And let’s not forget. Their customers love their food. From the fresh meats, the secret menu items, the vegetarian option or two, to the beer and wine they also sell, their formula is working. They even sell Shake Shack doggie treats. Plus, it doesn’t hurt that in the US last year, almost 9 billion burgers were ordered by hungry burger fans.

One of the CEO‘s mottos is:

The bigger we get, the smaller we need to act.

And that for certain is a part of the charm of this unlikely success story.