All project launches are attempts to change reality. It could be the launch of a new product, nonprofit organization, government program or an educational initiative. An organization bets that once it releases its product or service into the world, consumers will not only notice but will flock to it in droves. Yet the vast majority of launches fail. The new product goes unbought; the idealistic nonprofit falls short of its goals; the government program doesn’t reach the people it was intended to help. And the demand that the launch team hoped to elicit and satisfy never materializes.
Adrian Slywotzky (left) and Karl Weber
Although actual failure statistics for project launches are hard to verify, the estimates provided by knowledgeable industry professionals are distressing enough. Experts say that 60 percent of Hollywood movies fail to earn back their costs. Sixty percent of company mergers and acquisitions end up losing money, not making it. Information technology projects such as computer system upgrades fail at an estimated 70 percent rate. Venture capital investments fail at 80 percent. New food products die on the vine at 78 percent; new prescription drugs at more than 90 percent. You might call launch the Achilles Heel of demand.
The painful reality of launch failure must have been in the minds of the board members of Toyota when they were asked, in 1993, to green-light a highly risky new project—the plan for a hybrid vehicle of a kind no other automaker had successfully launched.
Crown publishing, 2011
In a world of steadily depleting petroleum supplies, the idea of an ultra-efficient hybrid vehicle was enormously appealing. But it would also be extraordinarily expensive to develop; estimated development costs would be at least a billion dollars. And the odds of commercial success for a car using this unfamiliar new technology were low, probably no better than 5 percent.
When asked why he would take a billion-dollar bet on such a long-shot product, Toyota’s Takeshi Uchiyamada, the leader of the project task force, replied by comparing it to one of the most audacious engineering feats of the past century: “If the Americans succeeded in going to the moon, we can succeed with this car.”
In the end, of course, Uchiyamada won his bet. The long-shot project turned into the Prius, the world’s first successful hybrid car, progenitor of an entirely new industry of fuel-efficient vehicles, and one of the products that helped make Toyota the world’s biggest car company.
Can other would-be demand creators follow Uchiyamada’s example and change the odds of success on their next project launch from 20 percent to 80 percent—or even better?
Yes, it can be done. But the story of the Prius, and of other successful product launches, reveals that success requires changing the genetic thought-code that controls—and dooms—the typical launch. It requires moving far beyond business-as-usual, and applying a unique organizational structure, an unusual mix of resources, and a healthy dose of fear.
Great demand creators have developed an array of distinctive mental habits that distinguish them from most launch practitioners. We’ve identified seven that appear to have the greatest impact on the odds of a successful launch.
1. Conduct a fatal flaw search. Seek out the crucial weakness(es) that will undermine a business design and kill the value of a launch. Finding the fatal flaw early—once, twice or even several times—is a key step in practically every successful launch. If you find it and can fix it, fix it. If you find it and realize that you can’t fix it, it’s time to ask: “Should the launch proceed?” And if the honest answer is no, then shut it down.
Unfortunately, this is the opposite of how we ordinarily think. The genetic code of business-as-usual conditions us to look for confirmatory evidence— data that suggests we’re on the right track. Success at launch requires us to recognize that dangerous reflex—and take conscious steps to reverse it.
2. Compete inside the organization. The idea here is simple: Make accelerated evolution work for you. If your launch team creates meaningful variations and has internal groups or alternatives compete, then it will be able to select the strongest to compete in the outside world.
This thinking shaped what became Toyota’s “excess-options” program for the engineering and design of the Prius. Toyota tested some eighty different types of hybrid engines early in the life of the project. Through extensive computer-based testing, the engineers narrowed the eighty possibilities down to eight, then to four. Then they had an intense bake-off among the four. The last survivor was a highly evolved and tough engine.
In similar fashion, Apple’s designers create ten pixel-perfect, unambiguous mockups of every feature for each new product. Their goal is to produce many very good, yet very different, implementations of the idea. Using specified design criteria, these ideas are narrowed down to three options. These three options are developed and perfected in parallel for months. One final option is ultimately selected for production.
This means that Apple throws away 90 percent of its design work. Wasteful? Not really. This system gives Apple’s designers enormous latitude for creativity that breaks past traditional organizational and psychological restrictions. When you know that the design you are crafting is one of ten rather than the one, your willingness to cut loose and try something a little wild—and perhaps a little brilliant—is much greater.
Competing internally requires a large pool of variations, and an unreasonable degree of iteration. But it is that endless iteration that leads to perfection— and is quite contrary to the business-as-usual genetic code, according to which organizations compete externally only.
3. Imitate to be unique. Launch masters understand the selective role of innovation. Great demand creators don’t innovate in everything. Instead, they lavish creativity on the most critical variables; everywhere else, they borrow and steal shamelessly.
The reason is simple: When you’re running a launch, there is never enough time, money, talent or emotional energy to analyze, master and control all the thousand-and-one details that you have to get right to create significant demand. This is true even when a major corporation like Toyota or Apple is involved. After all, even a big company is really made up of a thousand tiny budgets—a million dollars here, half a million there—each of which is run by a manager who is under scrutiny and pressure to be as cost-effective as possible.
So investing resources in reinventing the wheel is a formula for failure. This is why great demand creators ruthlessly prioritize the handful of crucial elements when planning a launch and invest their resources in those. Everywhere else, they creatively recycle, reinvent, and reuse and so save money, time and effort. Developing his first movie on a stingy budget, Orson Welles rummaged the back lots at RKO in search of old sets, props and furniture he could adapt to his purposes, concentrating his efforts on developing an audacious script and eliciting brilliant, unconventional acting from a company of relative unknowns. The result, as critic Pauline Kael explained, is an epic historical drama produced at a fraction of the normal cost—Citizen Kane.
Following the same principle, because Uchiyamada and his engineering team at Toyota knew they had a near-impossible array of technical problems to solve in designing the hybrid Prius, they opted to use the familiar and successful Corolla body design rather than creating a brand-new platform. They also collaborated with Matsushita on the crucial battery design rather than trying to develop it in-house.
4. Emotionalize the offer. Most executives and directors behave as if customers and their behavior are rational. But in truth, the soft and fuzzy elements—emotions, impulses, urges, tastes, aesthetics— are often what separate winning offerings from their almost-but-not-quite-equally-cool competitors. Emotionalizing your offering turns “very good” into “magnetic.”
Zipcar, one of today’s fastest-growing companies, started off promoting itself as a “car-sharing” service. Problem: Nobody really wants to “share” a car. Zipcar got traction with customers when it began promoting its super convenience instead. Who doesn’t love convenience? Honda engineered a great hybrid—but people didn’t fall in love with it the way they fell in love with the Prius. Sony produced a technically wonderful electronic reader—but it didn’t excite people the way the Kindle did. The ZEN music player was nice, but the iPod was cool. Nokia made great smartphones for years, but the iPhone turned people on.
Product design is a powerful emotional trigger. That’s why, when Samsung wanted to vault past Sony and Matsushita in the world of electronic devices, it tripled the number of designers working on its products. What’s more, it officially gave the designers precedence over the engineers—a gutsy move for an engineering company.
5. Create a unique organizational equation. This means looking for the managerial, structural, and communications strategies that are especially appropriate for this launch, at this time, under these circumstances. It’s an important corrective to the business-as-usual genetic code that leads people to employ their existing organizational structure as the default choice, even when a launch project absolutely demands organizational innovation.
At Toyota, for example, a successful launch for the Prius meant, among other things, creating the obeya, a big room equipped with personal computers and two computer-assisted design workstations. Team members assembled in this room daily to collaborate on the Prius project—the first time this had been done at Toyota. The idea was to raise the odds of success by getting all the relevant talent working together, sending off creative sparks and generating an intense sense of focus. Toyota also harnessed fully two-thirds of the company’s design capabilities to the Prius project, and sent advance teams of resident engineers into its factories to solve manufacturing problems for the Prius in the design phase, long before those problems even had an opportunity to take shape. None of these organizational steps was business-as-usual for Toyota. But they were the rights steps to make the long-odds bet of the Prius pay off.
6. Maintain an artful balance between confidence and fear. Think of Michelangelo’s David in the Galleria dell’Accademia in Florence. It depicts a beautiful male nude in the prime of his youth. It is, of course, also the classic depiction of an underdog—the inexperienced David, armed only with a slingshot, about to challenge the heavily armored Goliath, the giant Philistine warrior.
The statue reveals Michelangelo’s insight into the drama of the confrontation between David and Goliath. When you enter the gallery, your first view is a side view. From this perspective, the larger-thanlife David exudes total confidence, bordering on arrogance. But as you walk to the right, you gradually confront David face to face. Now you see that his eyes are turned upward, to a point in space about forty feet above where you are standing. He’s gazing at the unseen adversary—Goliath. And you see in David’s eyes a look of total, abject fear.
Contrast that with the genetically coded optimism that many people carry over to business from the world of sports. (You might think of it as the “You Gotta Believe!” approach to leadership.) Confidence is important, but fear is critical. Fear helps you to fully develop the imagination of disaster—at a time when you can actually do something about it. Fear gets the adrenaline pumping and forces you to double down on every element to ensure survival— and success.
7. Think in terms of series, not one event. Launch masters know that a successful launch is rarely a one-day or even one-month affair. They prepare for multiple assaults on the indifference of the market. Do you recognize the following lines of poetry?
To be or not to be, aye, there’s the point
To die, to sleep; is that all? Aye, all.
No, to sleep, to dream, aye, marry, there it goes,
For in that dream of death, when we awake,
And borne before an everlasting judge,
From whence no passenger ever returned,
The undiscovered country, at whose sight
The happy smile, and the accursed damned.…
Your reaction might be, “Well, some of the phrases are vaguely familiar. But it sounds goofy—a bad excuse for poetry.”
And you’d be right. Because what you just read is Version 1.0 of what theater-lovers often call the greatest speech in any play ever written. You’re more familiar with Version 3.0:
To be, or not to be: that is the question:
Whether ‘tis nobler in the mind to suffer
The slings and arrows of outrageous fortune,
Or to take arms against a sea of troubles,
And by opposing end them? To die: to sleep;
No more; and by a sleep to say we end
The heart-ache and the thousand natural shocks
That flesh is heir to, ‘tis a consummation
Devoutly to be wish’d.…
This soliloquy from Shakespeare’s Hamlet has mesmerized generations of theater-goers. By contrast, Version 1.0 was just awful. But it was a start. The first version of your product is likely to be no better than Shakespeare’s. Practically all great products are built on a foundation of failure. Fortunately, you can use the same technique Shakespeare used to unlock his own genius: Relentless, repeated revision.
The first version of the Prius produced underwhelming results. Sales were disappointing, but Toyota kept redesigning the car, improving its efficiency as well as going beyond the functional to the emotional. It created a new design that stood out, that let everyone know that it was a Prius, not a Corolla look-alike—which meant highlighting the green sensibility and forward-thinking mind-set of the driver. The new model was launched in 2004, and sales took off. In 2009, 16 long years after development began, the Prius became the bestselling car in Japan for the first time.
The Toyota story illustrates a truth that all the best demand creators recognize: the power of second chances. If a new product doesn’t create waves in the marketplace, great demand creators keep talking to customers and redesigning. As a result, their products often reach escape velocity on the second or third try.
Many great products are built on a solid foundation of failure—but it must be organized failure, as Toyota and other launch masters exemplify.
The seven modes of thinking examined above are just a sampling of the “how to think” DNA found in great demand-creating organizations. Think about the companies you advise, and the way they approach a new product. Is their mental DNA closer to business-as-usual, or has it mutated to resemble that of the launch master? Perform this analysis point by point. Do you like what you see?
For an even simpler way to check your organization’s readiness to mount the kind of launch that makes demand creation possible, answer these four questions:
- How strong is the leader?
- How strong is the team?
- How strong is the resourcing?
- How strong is the fear?
The better the answers, the better your odds of success.
Adrian Slywotzky is a partner at Oliver Wyman. Karl Weber is a writer specializing in business, politics and social issues. This article is adapted from their new book, Demand: Creating What People Love Before They Know They Want It (Crown Business, 2011). Follow the Demand blog at www.demandthebook.com.
A Good compilation with examples. If thats from your book, I would definitely givve it a read.
Thanks,