"Innovation is the latest management mantra for a growing list of CEOs, especially at big, established companies who for years have fixated on reducing budgets," reports Carol Hymowitz in The Wall Street Journal (7/17/06). "At General Electric, CEO Jeffrey Immelt is telling managers that no matter how efficient their work processes, they won't achieve his goal of eight percent organic growth unless they have great products and services to sell (that's why they pay him the big bucks) ... At Procter & Gamble, the vice president of design and innovation -- a position that didn't exist before 2001 -- encourages engineers, designers and marketers to hang out together and pool ideas." And we've all read about Harrah's, which "is using innovative data analysis of customers and their game-playing habits to lure repeat business."

At John Deere, CEO Robert Lane, who spent much of his first six years at the helm focusing on "cost cutting and manufacturing efficiency," says "the company's ability to keep inventing new products that are useful to customers is still the key to Deere's growth ... He reminds employees that Deere was founded in 1837 after blacksmith John Deere invented a steel plow that worked well in prairie soil." Robert hopes to continue in that tradition -- to help its customers "work smarter and harder" -- with innovations such as "new forestry equipment" that "allows operators to select and cut trees in a way that fosters regrowth." Deere has also formed an "Agri Services group, which is developing and marketing new services to help farmers grow more uniform crops," via a database of "300,000 acres of cotton fields so farmers know precisely where to spray fertilizer." In another innovation, Deere's Agri Services "also aims to tell food companies and consumers more about what they're buying.

Dan McCabe, svp of Deere Agri Services, explains: "We'll be able to trace exactly what's in the food we're eating, where it was grown and what was done to it at every point in the food-production chain." Point being: "If a cereal company learns that certain crops make production easier or result in better-tasting product, it may pay more for them." Unfortunately, that level of commitment still tends to be the exception rather than the rule at most companies today. Thomas Kuczmarski of the Kellogg School at Northwestern comments: "Executives have to define what they want to achieve, and give their strategy muscle and guts by allocating finances and their best talents." Most of them still don't do that, apparently, but "...with just-in-time inventory, outsourcing and other cost-squeezing measures now widespread, executives know their companies must become more creative to capture customers in the global market."

Perhaps best known for designing "the sleek eight-ounce energy-drink can for Red Bull, London-based Rexam plc, "the world's top beverage-can manufacturer," sees its future in something other than aluminum-canned beverages, reports Camille Ricketts in The Wall Street Journal (7/17/06). "The can technology is fairly old, the shapes are defined and it's more about process development, reducing the weight" and "increasing the speed" of production, says Rexam ceo Lars Emilson. In addition, as noted by Merrill Lynch analyst Kean Marden, it's easy for other beverage-makers to "come along, set up a machine and start producing" copycat cans. That's not as true in other product categories -- such as pharmaceuticals and beauty products, he observes.

But, of course, beauty products usually don't come packaged in aluminum cans -- which helps explain why Rexam's plan is to expand into ... plastics: "Demand for plastic is booming worldwide because the material is easily customizable, pleasing companies that want distinctive packaging for their products, and it is also lightweight and recyclable." Graham Chipchase, head of Rexam's plastics division comments: "Innovation is essential to the plastic division. Customers always want to see something new, something that stand out ... You can't survive in this business without it." Merrill Lynch's Kean Marden adds: "Pharmaceutical and beauty products are niche areas with high barriers of entry and a degree of intellectual property that will give them an edge."

Rexam's new focus on plastic already has resulted in "new products, such as invisible tubing for perfume spray-heads ... a change Rexam believes clients will like because it allows for a classier bottle design." The company sees similar potential for innovation in beverages, although beverage-can sales still account for "as much as 66 percent of its annual sales," while plastics account for just 23 percent. But Rexam is investing heavily, "spending close to ... $735 million ... since September acquiring plastic firms outside of Europe ... Rexam says the global rigid-plastics market has an annual growth rate of as much as six percent, compared with four percent for its basic can division." In addition, the rigid-plastic market is "high fragmented ... the top 10 companies in the field claim only 16 percent of the market." And the price of aluminum keeps going up, too. Rexam's biggest clients, by the way, include Coca-Cola, Anheuser Bush, as well as Pfizer, Unilever and L'Oreal.

Tim Manners
editor

SK Mobile and Sony PlayStation thrive in an era of consumer-generated content. By Laurie Coots, cmo, TBWA Worldwide. (more)

Nissan vice president Jan Thompson on how a passion for "vibrant design" is driving a high-wire revival of a formerly faltering brand. A HUB magazine exclusive conversation, with Tim Manners. (more)

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IIR's 6th Annual Shopper Insights in Action. July 19-21, Chicago, featuring the newest methodologies for understanding why people buy, strategies for taking action and tips for ensuring survival in today's retail environment. Hear from top retailers including Wal-Mart, CVS, Best Buy, JC Penney, and top manufacturers including Unilever, E&J Gallo Winery, Coca-Cola, PepsiCo, Coty and more. Visit www.iirusa.com/insights today and when registering, please mention priority code: XM1815HUBB

PROOF: Market Research and Development for Package Design. September 25-27, 2006, Chicago, IL. This is the only event to focus on proving the value of package design through market research. Speakers represented include: Wal-Mart, Target, The Home Depot, Kraft, General Mills, Sony Electronics, The Coca-Cola Company, Bacardi, Nike, and many more. Early bird registration discounts are available. For further info visit: iirusa.com/proof

Focalyst Executive Forum. Innovations and Insights in Reaching Boomers and Older Consumers. Sept. 28-29, Lincoln Center, New York City. A Joint venture of AARP and Kantar Group, featuring a comprehensive study on the 42+ population and case studies from Best Buy, CBS Corporation, Clarins, General Motors, Intel, Kraft, match.com, MIT AgeLab, MSN, P&G, Southwest Airlines, Sprint Nextel, The Hartford, The Home Depot, and Travelocity, and more. For more information call: 203-966-0101 or visit focalystforum.com.

U.S. Hispanic Marketing Conference. September 26-28, Hilton Del Mar, San Diego, CA. Hear the latest success stories and best practices from McDonald's Corporation, Houston Astros, Nortel, Ford Motor Company, TodoFut.com, AOL Latino, Harley Davidson, Staples, CitiGroup and others. Be sure to register early to receive the best early bird pricing. Please visit USHispanicMarketing.com or call 800-882-8684 for full details.

The Research Industry Summit: Improving Respondent Cooperation. September 28-29, 2006, Chicago, IL. Your chance to see the most influential executives from all factions of the research industry come together around the same table, voice their opinions and recommendations, and come to a consensus that will serve to guide the entire industry towards improving cooperation. Visit: iirusa.com/respondentcoooperation

Entertainment & Media Forum. October 18 -19, Los Angeles, Beverly Hills Hotel. Join leaders from Film, Television, Music, Gaming, Digital Media, Marketing and Advertising for keynote presentations, case studies, and panel discussions examining content delivery, online strategy, mobile entertainment, VOD, podcasting, content creation, digital content and media, brand integration, and the latest in media research and trends. For more information, please call (305) 667.4705 or (866) 636.7350, visit trademeetings.com, or e-mail: emf2005@trademeetings.com.

92 stories about innovative retailers: Cool News About Retail by Tim Manners

Building Brands At Retail: Best Practices in Co-Marketing by Chris Hoyt

Start being remarkable: The Big Moo by the Group of 33