“Often the best way to grow your business is not to do product innovation”
MARYLOU ANDREW: What has kept you busy since leaving Pakistan and Unilever?
TOM DARLOW: I left Pakistan in 2006 and Unilever in 2007 in Singapore. I have been working as a freelance trainer providing marketing training across the Asia region. Pakistan is obviously one of the key countries because having worked here it is always nice to come back and see how things are going.
MLA: And you have your own company in Singapore called 2-The-Point.
TD: Yes, that is the name I gave the company because what I didn’t like when I was in business were those complicated theories which sound good in books but are pretty hard to apply in the real world. So whenever I can, I try to keep things as simple as possible – not simplistic but simple – so that people can hopefully go back and apply the lessons.
MLA: How would you define non-innovation led growth (NILG)?
TD: It’s not a new concept but the interesting thing is that training is usually held on innovation and if you go on Amazon, there are apparently 45,000 books on product innovation. However, often the best way to grow business is not to do product innovation in terms of new formulations, packaging and benefits, but actually to work out how you can grow your existing business. The key thing to grow is the biggest part of your business, or what I call the core of your business, because any growth you achieve there will have a magnified impact on your financial results.
MLA: Is NILG just another term for old product development?
TD: NILG doesn’t mean you can just sit on your existing old business and do nothing, because obviously society changes and your consumers and shoppers change. However, rather than chasing new benefits and launching new variants – all of which is very sexy and interesting to a lot of marketers – is to ask how can you grow your existing business. Companies like Coke, Pepsi and Red Bull are experts at this.
MLA: Of course there is nothing wrong with innovating.
TD: Yes, and obviously you need both innovation and non-innovation led growth. In some categories you need more innovation than others but often people assume that innovation is the best way to go and sometimes it is not.
MLA: And innovation is expensive, isn’t it?
TD: Not only is innovation expensive, it is also high risk. Only one in five innovations works, so after two years nearly 80% of innovations have been delisted. Now obviously you cannot put your head in the sand and stay where you are, but when you are considering the growth options ahead of you, it is worthwhile having a hard think about your existing business rather than automatically going for innovation.
People buy what they buy for very sensible reasons, so to suddenly persuade them to do something differently you have to be pretty clear that you have a really strong benefit to make them decide.
MLA: Practically speaking, where do you start?
TD: The starting point is always to identify your best source of growth; the triggers and the barriers, and one of the points of the workshop was to make people think about the options they have. Again, people assume they know the best option to grow but they need to rethink that. One of the examples I gave was ice cream in the Philippines. Now when you want to grow in-home ice cream consumption, often the most obvious solution would be to target mothers to buy more, but in fact what they did very successfully was to target fathers because they had the insight that whereas mothers are pretty tight on the purse strings, dads are more willing to buy the family treats because they see themselves as the entertainer of the family at weekends. So by targeting men rather than women they doubled their business; but it is not the obvious route to grow.
MLA: Does this require going out and acquiring more data?
TD: Not necessarily, but it means having a tough think about the options and seeing what you know about the triggers and the barriers; what insights have you got which might help you decide. Sometimes it is about more data, but more data sounds a bit like going off and doing more research. This is not necessarily the case; it is about spending a bit more time asking yourself ‘do we really understand what is likely to change consumer behaviour’, because that is not an easy thing to do. People buy what they buy for very sensible reasons, so to suddenly persuade them to do something differently you have to be pretty clear that you have a really strong benefit to make them decide.
MLA: But a lot of times the problem is that businesses do not have the insights.
TD: Exactly, therefore the first thing to ask is have you got the insights to help you decide, and that is no different from innovation-led growth; it is just good business practice. The starting point for both is the same. The innovation route is very well worked and marketers feel very comfortable with it. Let’s re-launch or do a new variant, it is a fairly comfortable passage, whereas if you say you are not going to do anything on the product except thinking of ways to grow the business without major changes, it is a lot harder, so people tend to move away from it quickly. I made the point in the workshop that if Unilever had owned Red Bull there would probably be about 15 variants by now because every brand manager that came on the business would say, ‘right, what this needs is a new variant or re-launch!’ To be honest I would have been the same, so you have to admire these companies who have been far more disciplined in their thinking and have really built an existing core product.
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