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“Innovation” has become such a common word in the business lexicon that it is as if we have forgotten the true meaning of what it means to introduce something new to the market. Yet, as leaders, we face heightened challenges every day with plentiful opportunities to a breakthrough in our industries. Perhaps, it’s simply about seeking a new angle of perceiving these opportunities.

In the article “Cultural Innovation: the secret to building breakthrough businesses,” Douglas Holt shares the steps to the cultural innovation model. Delivering something truly remarkable will require going outside bettering products (what Holt calls “better mousetraps”) and appealing to the “eye of the beholder” (i.e., your customers). A cultural innovation approach shifts the focus from product betterment to identifying a weakness in an existing category and reimagining the value proposition by truly understanding what is considered valuable.

As we will explore in this article, value is delivered to new value propositions as well as new identity propositions. For example, look at how zeitgeists like Starbucks, Patagonia, Jack Daniel’s, Ben & Jerry’s, Vitaminwater changed the dynamic of their categories by reinventing the category’s ideology and symbolism. Ben & Jerry’s founders Ben Cohen and Jerry Greenfield, imagined their ice cream company as healing the wounds of capitalism. In a summer interview with the New York Times, Greenfield said, “Ben and I are sometimes asked, ‘Why has Ben & Jerry’s been successful?’ We usually say it’s because of three things: really high-quality ice cream, great ingredients, very unusual flavors – and also the activist social mission of the company. Some other company could start making ice cream with big chunks the same way Ben & Jerry’s does, but Ben & Jerry’s having this activist, outspoken social mission — other companies can’t copy that. It’s not something you can just say. It has to be who the people are.”

Cultural innovators know that better mousetraps in the secondary part of the equation. Cultural innovation leads first with captivating hearts and minds. To illustrate this concept, Holt shares the cultural innovation steps with a case study of how tiny start-up Blue Buffalo outwitted giant incumbents Nestlé Purina, Mars, and Procter & Gamble in the dog food category:

The Cultural Innovation Model

Step 1: Deconstruct the category’s culture. The belief systems of companies, consumers, and the media create markets. To better understand a category’s culture, examine organizing principles and the dominant ideology. In the cited case of modern industrial dog food, the market shifted in the 1970s when branding refocused on performance-centric ingredients (thanks to Iams and Hill’s Science Diet). Dog food value changed and included considerations for nutritional benefits and offer “proven” quality nutrition.

Step 2: Identify the Achilles’ heel. Fatal flaws eventually emerge in all categories’ cultures, which is catalyzed by emerging vulnerabilities. In the case of the scientific dog food, it was the emergence of wheat gluten contaminated with melamine; customers all of a sudden paid attention to the presence of this ingredient and that it was imported for China.

Step 3: Mine the cultural vanguard. A cultural vanguard is a movement that breaks through a crack in a category’s culture before the big companies arrive. Blue Buffalo acted as the cultural vanguard by emulating canine cuisine before domestication (e.g., real meat, poultry, fish, and whole foods).

Step 4: Create an ideology that challenges the Achilles’ heel. The vanguard provides the inspiration for cultural innovators to create a new concept. Blue Buffalo challenged pet owners to consider ingredients over industrial products, using the founder’s late Airedale terrier Blue has an inspirational story.

Step 5: Showcase symbols that dramatize the ideology. Cultural innovations are illuminated by symbolic concepts, which are strategically curated from marketing to making the innovation as compelling as possible. The most effective symbols attack the Achilles’ heel and draw a clear contrast with the category’s dominant culture. Blue Buffalo’s new value proposition offered new nutritional benefits (ingredients) and a new identity benefit (for the owners).

To wrap up the case study, it’s important to examine why the incumbent counterattacks failed. Iams stumbled on their own new product launch because of cultural incoherence; Purina’s new natural dog food brand effort embraced unrelated purposes which the consumers subsequently ignored, and Mars mismanaged an acquisition that they hoped would challenge Blue Buffalo. All of the brands missed the boat because they didn’t grasp the power of Blue Buffalo’s cultural innovation.

If companies wish to move past the better-mousetraps mindset and through successful cultural innovation, they must avoid the following pitfalls: working eternally in the present within their category’s existing culture; being wedded to a product’s features which are often construed in building-block terms; and finally, ignoring the value of identity.

The mantra, “Think like a cultural entrepreneur,” writes Holt, is the only way incumbent companies can anticipate cultural innovation maneuvers. By serving customers with the best products, while also anticipating cracks in the category’s foundation and embracing new opportunities for cultural value propositions, it is possible to be a leader in a new regime as it transpires. Link to Article