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Innovating Meaningfully
The need for meaningful innovation in the performing arts category is beyond important. Because we position ourselves as squarely in the center of the creative sector, we have to make sure that we can answer the question, “Where’s the beef?"
Is there as much innovation in our sector as is required for us to thrive?
I’ve been thinking a great deal about strategy when it comes to innovation in the arts, particularly about where organizations can most effectively invest limited resources for greatest returns. My thinking is, by no means, fully formed at this point. But I hope there might be some value in sharing my thinking on this subject.
For the purposes of making an effective example, I’m starting with Gillette, a company that is – in my thinking – a poster company when it comes to innovating for competitive advantage.
An Example Outside the Category
When I started shaving, I had a state-of-the-art stainless steel safety razor. Though the blade had two edges, I could only shave with one at a time. I thought it was a pretty good razor at the time, but looking back now, I know it’s not nearly so good as the Gillette Fusion I use now. The Fusion I use now has 5 blades, one for detail trimming and a 4-blade surface for regular shaving. I can barely feel the blades when I’m shaving.
So, some 35 years or so ago – in my frame of reference – a razor had one blade on its shaving surface. Competitive claims and product names were framed around blade sharpness. Remember Wilkinson Sword? Years later, when Gillette introduced the 2-blade Sensor, it disrupted the competitive framework (sharpness) and redefined – at least for me – what a razor generically was. Sharpness became taken-for-granted (an undifferentiated claim) and took a back seat to multiple blades. Today, after having passed through a period where a 3-blade system defined shaving, I’m now up to a 4-blade whisker-harvesting system.
I’m trying to imagine what’s coming next. Gillette keeps on innovating. I’m wondering how they will flank their competition next. In the world of consumer care products, they must. It is innovate or lose leadership position in the shaving category.
We must innovate effectively in the arts, too, are risk losing our leadership position. So how do we innovate most effectively? What are our strategy considerations?
A Useful Model
In his landmark article, Marketing Success Through Differentiation-of Anything (Harvard Business Review, 58, 1, (1980), Theodore Levitt introduced a very useful model to think about products, differentiation, and adding value. Levitt suggested that products and services actually compete at the expected and augmented levels, not at the generic level.
We certainly don’t operate like this is true in the performing arts, especially with our obsession with the art – which, when it comes to strategy, offers so little traction.
Are claims of qualitative differences at the generic level really effective? How many people can really apply substantive aesthetic and stylistic dimensions to meaningfully differentiate between Manuel Barrueco’s version of Bach’s 4th Lute Suite, and John William’s version? I’m a classical guitarist myself and I can argue for either of the two! At some point, quality of the generic product becomes so rarified in its comparative dimensions that there is no meaningful differentiation, except by experts – and how many of those are there in our audiences?
My point, using this example, is this: as innovations occur, they change what consumers expect. Innovations that are diffused broadly throughout markets will change what a product is in generic terms, as did Gillette with the razor. But, failing that, they absolutely change what the expected product becomes. Products become, in expected terms, whatever the best-perceived product is.
The same dynamic exists in the performing arts. Innovations shift audience expectations. For example, it wasn’t all that long ago that only large arts institutions had WEB sites. They were uncommon enough that they weren’t expected; they were in the augmented product level. Today, audiences expect even small organizations to have WEB sites.
Having one isn’t enough, either. It must be well-designed, easy-to-navigate, intuitive, and anticipate the information that audiences want to retrieve. As innovations become more broadly diffused throughout a category, these innovations migrate inward from augmented level to the expected level. A strong argument may be made that some innovations become so integral to a product that they become generic. Today, WEB sites (which were once part of the augmented bundle) are part of the expected bundle. You’re expected to have one. Period.
So, does creating a WEB site add value for audiences? No. But NOT having one destroys value.
Because WEB sites are innovations that are broadly diffused throughout the category, they are no longer effective strategies to add value. It is part of the expected product array – like programs, season brochures, advertising, and the ushers who take you to your seats.
Will having a particularly good WEB site add value? Only if a significant wow factor occurs. A particularly good example of a wow-factor WEB site is the Ashes and Snow site. Otherwise, quality improvements of components in the expected product bundle don’t add that much value.
Think about it: if you could get Andrew Porter to write your program notes – as brilliant a critical thinker as Porter is – would this add wow-factor value? Only to those who 1) read them; 2) know enough to appreciate Porter’s insights; and 3) experience enough qualitative difference between the former writer and Mr. Porter to experience the value difference.
At the expected product level, a non-offering (no program notes at all) or a quality deficiency (poorly written notes) are both more likely to cause value destruction. This is the problem: at the expected product level there is very little benefit from quality and significant value-destruction potential if quality is absent. In strategy terms, a good solid offering is most prudent. A big investment is likely to create a poor return.
As Levitt points out, significant competitive advantage is most likely to occur in the augmented product bundle. This is the toughest domain in which to innovate. By definition, it is the domain of insight and of surprise. By definition, it is unexpected.
Connecting Innovation to Meaning
Innovating in the augmented bundle requires ingenuity and a clear sense of the overall value strategy. The most successful product augmentations are those that add value to the rest of product value arrays. Some are more limited. Podcasts, for example, are not all that common, but if this innovation becomes more common among performing arts organizations, podcasts will migrate from the augmented product level to the expected level. This is a fundamental problem with technology. Consumers are quick to expect state-of-the-art. If one organization can offer it, why can’t others? Technology innovations – unless they relate to core value delivery – have a short half-life. How can they relate to core value delivery?
Innovations that matter to audiences are not innovations for innovation’s sake. They are related to the values that matter most to audiences. Research suggests that what matters most to audiences is: entertainment, inspiration, escape, insight, and time with loved ones and friends (social value). What innovations fuel our audiences’ ability to experience value where it matters most to them?
A performing arts experience begins before an audience member takes their seat. A podcast, by enriching and adding texture to the experience – before it occurs – can deepen the actual experience while it is occurring. The value, therefore, is not contained in the podcast (which is just an informational channel). The value is in the podcast producer’s ability to intuitively anticipate those insights that are embedded in the upcoming work to be performed, and then facilitate the audience member’s experience of their meaning. Meaning isn’t created. It already exists in both the work and the audience member. Meaning is 1) located, 2) revealed, and 3) evoked. The value appears to exist in the channel innovation (the podcast), but actually exists in the very human ability to locate, connect, reveal, and evoke.
Our audiences hire our organizations to fulfill these needs. How do we innovate in their fulfillment? How do we construct a value chain that delivers?
Posted on May 15, 2006 11:30 AM | Permalink
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Comments
Neill,
Thanks for this fabulous overview of the Levitt model. It's a model I keep coming back to, again and again, since you first introduced me to it years ago. A quick look at most performing arts season brochures will underscore how many organizations primarily emphasize qualities that are either generic or expected by their audiences.