Innovation and ROI

How to Champion the Financial Benefits of New Package Design

By Robert Croft
I was recently asked to present any examples that our agency had worked on that proved a successful return on investment (ROI). I had never considered innovation as a capital investment-more of an absolute necessity. You might as well ask a shark how much energy it uses by swimming forwards, I thought.

The idea of quantifying an absolute necessity struck me as a sign of the times. Today's conventional wisdom seems to say: "If you can't quantify something, you can't manage it." And with the emergence of corporate titles such as Director of Innovation, there are literally thousands of executives out there who have the responsibility of delivering "the next big thing" within a strict budget. Indeed, the importance of communicating the ROI is a matter of duty to ensure that the relationship between client and agency is galvanized.

What's wrong with current corporate innovation policies

We've always considered innovation as something that should be part of a company-wide focus. Having a corporate champion of innovation who acts as a facilitator is fine. But looking at innovation as something that can be solved with a magic bullet by someone in a bean bag room is a very dysfunctional way of working. Indeed, this methodical approach is the leading contributor to the increasing trend of "innovation fatigue." Companies are sometimes disappointed by innovation due to a failure to understand that it's not a quick fix. Turning your company into an Apple or Nike requires a deeper understanding of what innovation really is, how it happens, and how it can generate a return.

Installing the director of innovation with the authority to install a holistic vision of a brand or business group is a masterstroke. This big picture way of brand building with a level of control provides "corporate design group punch" on a more modest budget. The combination of hotshot agency and corporate brand guru can lead to outstanding ROI results.

As a leading packaging agency, Swerve Inc (www.swerveinc.com) has seen hundreds of successful projects reach fruition. We've had the pleasure of working with some of the world's leading marketing executives and, conversely, we've seen many occasions when methodology and process could have been improved.

Why do we innovate?

The importance of innovative design as a precursor to mass production is massive. Design represents a period of contemplation and strategy that profoundly affects the manifestation of both product and package. Designers have a goal of communicating an epiphany of the brand message distilled as a package. Innovative design is a "flexing of the cerebral" that leads to communication of the brand in all possible consumer touch points. Innovation can shave ounces off plastic, reduce component counts, reduce assembly steps off a production run of millions and ultimately, seduce the consumer with aesthetics and functionality that conjure the emotion of desire.

Spending time and money on design is essential for effective innovation. However, some simple guidelines can ensure that the money is directed responsibly and effectively to yield the best ROI. Here are 10 innovation guidelines that contribute to a high ROI:

1. "There is never enough time - but there is always time to do it over" (Thomas Aldridge, package designer). An unrealistic timeline leads to poor innovation, missed opportunities, and a poor ROI. Start out with a realistic timeline and plan the project properly.

2. Build your creative stamina. Running a project is like running a marathon. Try to imagine a realistic vision of the end result. Then work backwards and make it happen!

3. What keeps you awake at night? Don't dismiss "unknowns" as something that will be sorted out in the end. Anticipation of pitfalls is key. If there is an untested or unproven element of the design it will always haunt you until the matter is addressed. Get to it sooner rather than later and everyone will sleep better.

4. To shape the future, get to know your past. Have faith in the fact that every good idea has already been done before in some other form. Study design history and develop an ability to recall mechanisms, functions, and shapes as part of your innovation resources.

5. False prophets lead to poor profits. Avoid over-elaborate design processes at all costs. Innovation is common sense and there are no two projects that are the same. If someone is trying to sell you a system, ask them why they need to rely on one in the first place.

6. Never stop thinking like a consumer. We are each a consumer, so why would we stop thinking like one at work? Freely cross-pollinate new ideas from other categories to your own. It's a must for innovation.

7. The art of good observation is interpretation. Avoid "Mr. Potato Head" research. Asking the consumer to assemble their ideal package out of a series of parts can lead to innovation purgatory. Use good stimuli and common sense and always try to understand the need that gives rise to a consumer's answer.

8. Invest in design! Cost is relative. Advertising budgets are massive in comparison to design budgets. Yet design has a biggest impact on the overall ROI. Understand that every dollar spent on design innovation will be returned many times over.

9. Don't underestimate the power of prototypes. Peers and respondents look to working models as the most accurate representation of a design. Both offer no concessions for inaccuracies or shortcomings. Accurate prototypes made at the right time will galvanize the team, provide a unification of a single vision and will provide outstanding consumer research results. Conversely, exposing a prototype of a design that is not properly matured can prematurely kill a great idea.

10. Business is warC$and wars are won with strategy. The gathering and synthesis of information and the use of effective pre-design preparation leads to a better project foundation and ultimately, successful product entry that can harpoon your competitor or change the rules of the game.

Validation of these points is probably best demonstrated by case studies and press releases that support the impact of various product entries. According to the Mintel GNPD, 156,000 new products are launched each year and 93% of them fail. Swerve Inc has had the privilege of working on some of the more successful entries that went on to win awards and redefine the category, such as the following examples.

Windows Vista debut

The structural packaging for Windows Vista was designed and engineered in a multi-phase research and design program in the U.S. and Asia during 2006. According to a recent Microsoft press release, Vista debuted on January 30, 2007, with more than 20 million licenses in the first month of availability, more than doubling the initial pace of sales for its predecessor, Windows XP.

A new operating system is a considerable consumer purchase and we were staggered by the lack of innovation that had been applied to media packaging. Software packaging is a stagnant category with most offerings available only in large, disappointingly empty paperboard boxes. Swerve was confronted by a series of structural "non-designs" that compete solely on a graphic basis. The project represented a huge opportunity for our designers and Microsoft to rethink the future of software packaging totally, and thereby to redefine the category.

Swerve Inc has strived to create a reputation for designing packages that reveal the contents in a logical and pleasing way. The resulting package for Windows Vista is no exception. Opening the Vista package is like opening the gull-wing door to a Lamborghini. Excitement is generated. Immediately, the consumer is exposed to the disc presented beautifully on a versatile hub with the instructions stored in a neat compartment behind. All of this magic takes place within a front panel that is no bigger than a regular DVD box.

The packaging also represents a major deterrent to counterfeiters. It's probably the most advanced example of PET injection molding ever. A feat that is extremely difficult to duplicate, and a credit to Microsoft and its molding partners. The four components that comprise the multi-curved form snap together using a series of meticulously engineered snaps that manage the stresses within the articulating package. The package also manages the graphic card that lies within-taking the paperboard from within the glossy plastic form out to a fifth panel, which offers additional valuable real estate.

Microsoft's switch to PET represents a conscious change to use the world's most widely recycled material. Although the Vista package is intended to be a "keeper," it can also be tossed into the household recycle bin with soda bottles.

Dreyer's Dibs and Xbox 360

Dreyer's Grand Ice Cream asked Swerve Inc to participate in the development of the structural package of Dibs, hailed as "the next little thing in ice cream." It was a great opportunity to be a part of a revolutionary product entry that introduced ice cream as a finger food. Swerve was aware of the benefits of portion control for particular products. The family-sized carton holding 60 pieces features a removable, closable lid and an attractive oval cross section.

According to a Dreyer's press release, the Dibs product had sales of over $40 million in the first six months of 2005. The entry went on to win a silver medal from Merwyn Benchmarking Research and a 2005 Editor's Choice for Best New Products. In a sea of paperboard tubs, the revolutionary package really stands out and communicates the innovative product that lies within.

Swerve Inc had previously worked with the Xbox 360 team on the development of console and peripherals packaging that shared a unified and ownable aesthetic. The introduction of a revolutionary steering wheel game controller, though, deserved a package that showcased the sleek design of the components inside.

Swerve Inc arrived at a general arrangement of parts that displays the wheel and controls, facing the consumer at the angle that they would actually be played at. The packaging could also engage store shoppers from the lower shelf of a store display. The breakthrough came with the introduction of a close fitting, vacuum formed bezel that actually allows gamers to put their hands in the racing position at retail.

Innovation = patents; patents = beachfront property

Finally, packaging innovation creates the opportunity to thwart the competition with design and utility patents. This point stands out as one of the greatest tangible benefits of investing in the development of a proprietary package. The cost of building a brand and developing a product is huge in comparison to the cost of designing a package with an ownable aesthetic or delivery system.

All your hard work is meaningless if a competitor can go to the same stock package manufacturer and clone your structure. Members of Swerve Inc appear as inventors on over 70 of its clients products and packages. It's difficult to imagine Coca-Cola without the iconic bottle shape and equally difficult to put a price on that particular piece of intellectual property.

As we move forward into an age with the value of innovation coming under increasing scrutiny and design budgets appearing as an essential line item, designers should continue to strive to provide the best ROI. This way U.S. brands can continue to compete with confidence on the world stage.

Robert Croft is managing partner at Swerve Inc, a New York City design agency bringing innovative design concepts to market. He can be reached at 212-742-9560 x12 or through www.swerveinc.com.