Tag Archives: innovation

Not all Innovation is High-Tech. Not all High-Tech is Innovation.

To borrow an old punchline, sometimes companies innovate around technology ‘because they can’.*

A recent visit to the Hertz facility at the Denver airport illustrates the point – – innovation can only work when it is designed around the user experience.  Innovation that requires the user to adapt to technology, at the expense of experience, is not usually a blueprint for success.

My key car rental criteria are price, convenience and how fast I can get my car. At the counter, I preemptively say I don’t need an upgrade, don’t need insurance, and will fill it up myself. I also tell them they’re on the clock and my personal record is out the door in 3 minutes (although I had a wonderful 1:30 experience just this past week). It works, and it’s not nearly as jerky as it sounds. (really)

photo-1

So I was eager to experience the Denver Airport Hertz facility, which is huge (2500 s.f.) and bristling with open format desks, high-tech kiosks, and bumblebee-colored employees. The car rental facility of the future, right?  I’d be out of there in no time.

It was a disaster.  First, 25 minutes in a standard Disney-style winding line; then left the line and went to the separate line for a kiosk on the recommendation of a Hertz employee.  10 minutes to get to one of the kiosks, which needed assistance to operate.  The disembodied head on the kiosk video screen informed me that while I had a reservation, my car would not be available for at least another 30 minutes.  Except, of course, if I wanted to upgrade (at extra cost).  (we’ve seen this before)

I got mad and tracked down a manager, who finally gave me an upgraded vehicle without the upcharge (duh).  That was 45 minutes of hell in a facility that was presumably built on research and smart engineering.

The expensive technology and fancy building did nothing to help this experience.  The difficulties I had (kiosk operation, being held hostage for an upgrade) were resolved with the human touch.  The same human touch that gets me in-and-out of low-tech counters in under 5 minutes (often with a high-five to the counter person).Hertz charging

(Perhaps I should have thought more when I passed the cute ‘recharge’ station – under what conditions would you be using one of these at a car rental place?!).

photo 3

On the other hand, a recent Delta flight showed how smart innovation made the experience much better.  This was on a newly refurbished plane.

The overhead compartments had signs asking passengers to load their rolling bags vertically rather than horizontally, which gets more bags on the plane, and therefore keeps me from gate-checking.  Smart!  I win!

photo 1-1photo 5

Facing me on the bottom of the seat in front was an electrical outlet. I’ve seen these before but they’ve been awkwardly placed in a hard to reach place around my ankles, presenting the constant danger of feeling up my seat mate’s leg.

In both situations there was an outlet on each seat.  Delta figured out it’s better when you can see it.  Smart! I win again!

Technology has transformed our world and has fueled amazing innovation.  But this innovation has only worked when it has improved the user’s experience.  

Technology with no benefit is usually not lasting.

*it’s a guy joke.  If you don’t know it already, you probably wouldn’t appreciate it.

Whither Apple? Can a brand be too strong?

Is there such a thing as too much brand strength?

This past week, Apple celebrated its 30th year in business and announced 1Q revenue and earnings above analysts’ estimates.  The reward?  Apple’s stock went down -8% in a single day.   The story was that iPhone unit sales were below expectations.
I suspect there’s more to it than that.

mac30

What’s going on?  Apparently Apple has so completely trained us to expect huge news, that merely growing a huge profitable business is seen as a negative, the ‘Microsofting’ of Apple, if you will.

Apple, of course, has brought this upon itself, introducing us to the Mac, iPod, iTunes, iPhone, iPad, and changing an entire industry.  As Apple’s legend continued to grow, this sort of pattern became expected, much like a sub-30 point game for Michael Jordan was greeted with a shrug.  The next cool thing?  It’ll come from Cupertino, of course.

More recently, Apple’s track record has been less spectacular (perhaps not coincidentally following the passing of Steve Jobs).  Solid growth, but innovation more of the incremental sort, compounded by previously unimaginable screwups in product (Apple Maps) and marketing (being ‘out-cooled’ by Samsung!).  Competitors have started to catch up – Apple actually is following by increasing iPhone screen size.  In a recent Forrester Research study, Apple dropped from second to fourth in a consumer electronics brand customer satisfaction survey, behind Samsung, Microsoft and Sony.  What the what?!?!

Apple Comp

Finally, as one measure of expected future profitability, Apple’s P/E stands at around 12.7, down from 22 or so a few years ago.

What should we make of this?  Has Apple set the bar for itself too high and is now entering a death spiral (#Sony)?

1) To be sure, Apple’s experience demonstrates that ‘what have you done for me lately’ is alive and well for investors.

2) However, to paraphrase Mark Twain, the rumors of Apple’s demise are greatly exaggerated.
– What is less visible is that Apple has built an enormously deep reservoir of confidence and mystique over the years.  Apple still commands our attention, and has retained its exceptional image as an innovator and cultural driver, the result of its exceptional record of success, and absolutely consistent, disciplined branding work over the years.

Ever notice how sportscasters lead with how Tiger Woods is doing, even when he misses the cut (as happened this last weekend)?  We are all still looking to Apple for the next surprise.  This is what branding can do.  And you don’t need a high-profile marital flame-out for it to work, either.

I would venture that Apple is still the one technology company that all others measure themselves against.

Apple absolutely needs to continue to drive category innovation.   But when this happens (and it will happen), its deep-seated brand equity will help to re-energize its consumer base, driving greater sales and loyalty than might be possible with the same product from a different company.   Personally, I’m waiting for the Apple TV…