Innovation Lesson from The Apprentice
I’ll admit it. I, unlike most people in the United States, did not watch Donald Trump’s “Celebrity Apprentice” the other night. But in a conversation with some people who did tune in, it sounds like the winners applied an important innovation concept.
As I understand it, the task for the week was to see which team could sell the most hot dogs to raise money for charity.
The first challenge for each team was to set the price of the hot dogs: low enough to sell large volumes yet high enough to maximize margins. This is a challenge that all companies face when pricing their products or services.
Each team started selling their dogs for about $5. Then they started to ask their customers for more money using a variety of creative gimmicks. Their plan worked so they continually increased the selling price by bundling in extras (e.g., pictures with the celebs).
One team continued to focus on these “traditional” business techniques, selling as many high priced hot dogs as possible. In the end, they sold about $17K. Not bad for a day’s work.
But the winning team figured out something quickly. The hot dogs were not the end game; they were a means of getting to the objective: raise the most money for charity.
Instead of selling $200 hot dogs on street corners, they called their high-roller friends and asked them to buy hot dogs for $5,000 or more. The result? Over $52K in sales. Over three times the profit of the other team.
Can you imagine how many hot dogs you would have to sell to make a $50K?
This highlights one of the mistakes that organizations make when thinking about innovation.
Although top executives typically keep their eyes on the end game (usually some variation of short- and long-term stock price), as you move down through the organization this changes. The focus shifts to measuring and managing tasks and products (such as selling hot dogs). The reality is, these are only a means to an end.
The solution? Stop micro-managing activities and make sure that every employee understands – and keeps their eyes on – business fundamentals and what matters most. This will enhance both creativity and overall business performance.
Is your organization measuring how many hot dogs it sells? Or are you looking at creative ways to make as much money as possible?