Pets: Spectacular Digital Failure or Model for Strategic Innovation
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PETS. SPECTACULAR DIGITAL FAILURE OR MODEL FOR STRATEGIC INNOVATION? Iain Langridge, General Manager, Petfinder VP, Digital Media, Discovery Communications
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While Pets.com was busy soaking up all the oxygen in the room as a dot.com failure, another pets business was busily doing everything right on the internet and gaining traction on its way to becoming a massive success and a proving ground for innovation. That business had started four years earlier. Six months after Yahoo! and two years before Google. That business has been the leading web property in the pets sector worldwide for over sixteen years. That business is one of the 250 largest websites in the US and is still growing at a double-digit rate. It has leapt from web 1.0, through web 2.0 and is still growing on the social and mobile web. That business has a 20% share of all new consumers entering the $52 B pet market, and is a (quietly spoken) household name. Astonishingly, if you go into a room with more than 10 people in the United States, statistically at least one of them has been a customer of this business. That business is Petfinder.
Transcript of Pets: Spectacular Digital Failure or Model for Strategic Innovation
PETS. SPECTACULAR DIGITAL FAILURE OR MODEL FOR STRATEGIC INNOVATION?
Iain Langridge, General Manager, Petfinder
VP, Digital Media, Discovery Communications
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IPET Stock Price (From IPO (02/2000) to Delist (01/2001)
Obviously, everyone wants to be successful, but I want to be looked
back on as being innovative,..
Innovation is the specific instrument of entrepreneurship. The act that endows resources with a new capacity to create
wealth
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Petfinder-Proven Rules for Innovation 1. Purpose is key (and money is not a purpose)
2. Break-through by surrendering
3. Finding the Win-Win-Win drives innovation
4. Bring innovation back to the model
5. Don't build your organization around an innovation. Build it to innovate
got purpose?
TABLE A-1
Investment performance of Firms of Endearment* companies versus the S&P 500, 1996 to 2011
Fifteen-year Ten-year Five-year
Return Cumula- tive
Annual- ized
Cumula- tive
Annual- ized
Cumula- tive
Annual- ized
FoEa 1,646.1% 21.0% 254.4% 13.5% 56.4% 9.4%
S&P 500b 157.0% 6.5% 30.7% 2.7% 15.6% 2.9% Note: company returns are total returns with dividends reinvested and compounded a. Companies from Firms of Endearment, updated by authors b. Standard & Poor’s index of five hundred U.S. companies
*The eighteen Firms of Endearment companies are Amazon.com, BMW, CarMax, Caterpillar, Commerce Bank, Costco, eBay, Google, Harley-Davidson, Honda, JetBlue, Johnson & Johnson, Southwest Airlines, Starbucks, Timberland, Toyota, UPS, and Wholefoods Market.
Source: Sisodia, Wolfe and Sheth, Firms of Endearment: How World-Class Companies Profit from Passion and Purpose, Pearson Prentice Hall, 2007, updated 2011
Creating responsible pet owners from adoption throughout a pets life
SURRENDER Success, however unlikely, requiring however much innovation is inevitable !
if you give in to what your purpose is telling you to do
Adoption Options
Before After
Generate as many ideas as possible about: • Who to target • What to offer • How to organize to
do all this efficiently
Evaluate these ideas and decide what to do and what not to do
Implement the choice(s) selected while remaining flexible enough to adjust to changes in the environment
Exhibit 10-1 The Process of Crafting Breakthrough Strategy
Question the organization’s mental models. Facilitate this questioning by creating a positive crisis
Create a questioning culture
Create variety in the thinking processes used during formal strategic planning sessions
Experiment with new definitions of who, what, and how
Find ways to make the strategy development process democratic and participative
Replicated from ‘All the Right Moves, by Constantinos Markides, HBS Press
Petfinder-Proven Rules for Innovation 1. Purpose is key (and money is not a purpose)
2. Break-through by surrendering
3. Finding the Win-Win-Win drives innovation
4. Bring innovation back to the model
5. Don't build your organization around an innovation. Build it to innovate
Purpose + Surrender + Win-Win-Win + (Expectation of Change + Stakeholder focus)
= Business that is always innovating
