Selling at Nespresso and 3M

Think Like a CEO: How to Manage and Grow a Disruptive Innovation Next to the Core Business Section 3: Six Insight on How to grow Disruptive Innovations next to core
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Transcript

Let's take the example of post its you may be familiar with this story. When the innovator came up with the sticky notes in three m, he tried to convince all the marketing people that this is a great innovation and they should, you know, sell this. But the marketing people were not convinced. After all three M was all about making something stick better. And why would you sell something like the post it note didn't even stick? Well.

They didn't like the product. They didn't think it was a good idea. But in order to make this a success, the innovator had to convince the marketing people. So what did he do? He basically asked his secretary to send free samples to old people in the marketing department with some instructions, how to use it. The people in the marketing departments then started to use it, and actually found it useful.

And then of course, over time, when they run out of supplies, they asked the secretary for more and over time when there was a reasonable demand for the postage, he told the secretary when somebody is calling and asked for a free sample, we tell them No more. And we forward all calls to the marketing director. And this is how they got his interest, basically data experimentation. And this is my message if you want to convince somebody of an innovation, use data, conduct a simple experiment and convince them this way. Data speaks louder than words. There's no better example than espresso.

Everybody knows about Nespresso and Nestle sells around 10 billion cups a day. And it's a very profitable business. But how many of us actually knew that in the mid 1990s, the Board of Nestle wanted to shut down this pressure because they simply thought it would never break even. So why do we have this pressure today, but basically, the managing director asked the board for six months, and he promised them a certain revenue number. And in this six months, he experimented with the new strategy, and he actually came back with data. And when he came back with the data, the board actually changed their mind and didn't Shut down Nespresso.

And there are many examples like this, but the punchline is data talks louder than words. You can talk about it and talk about it until the cows come home but you have to design simple experiments to collect data on what you want to sell. This is a way more effective method.

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