Innovation Lesson from The Apprentice

January 7, 2008  

Innovation Lesson from The ApprenticeI’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?

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8 Responses to “Innovation Lesson from The Apprentice”

  1. David Zinger on January 7th, 2008 4:33 pm

    This post has been chosen as one of the top 5 Management Zingers on Slacker Manager for Saturday January 12th. Thanks for the heads up on the hot dog and innovation.
    David

  2. Stephen Shapiro on January 7th, 2008 5:39 pm

    Thanks David! Your website rocks. I am honored to be on the Top 5 Management Zinger list. Keep up the good work.

  3. karl Staib l Your Happiness Matters on January 8th, 2008 8:45 am

    Not being afraid of sticking your neck out there and telling the boss that you want to try a new idea is difficult. I think many of employees are afraid to do this because of the backlash it can create. It’s up to management to allow mistakes to be made, so employees aren’t afraid to try something new.

  4. Stephen Shapiro on January 8th, 2008 9:42 am

    Karl, you are correct. Sticking your neck out can be difficult, especially if you are concerned that it will be chopped off. Yes, management must encourage risk taking (or as I prefer to think of it, “encourage acting like an owner”) if innovation is to occur. Equally, if the employee is “less attached” to his or her job, they will do a better job.

    Doug Busch, former Chief Information Officer at Intel once told me, “The best things I have ever done in my career came shortly after I decided that the best thing that could happen to me is that they fire me.”

    You, as an employee, can add more value (innovation) when you are doing what is right rather than what will keep your job. And yes, that is easier said than done.

  5. Anne Truitt Zelenka » links for 2008-01-08 on January 8th, 2008 10:23 am

    [...] Innovation Lesson from The Apprentice : Stephen Shapiro “Is your organization measuring how many hot dogs it sells? Or are you looking at creative ways to make as much money as possible?” (tags: innovation business making-money) [...]

  6. Mark Riddle on January 8th, 2008 2:13 pm

    Another lesson in innovation is shown by the selection of the project manager.

    “Empresario” chose their project manager by traditional methods reasoning that since Omarosa has been on the series before she would have a inside track on how to play the game.

    “Hydra” selected Stephen Baldwin because he wanted to see what he could do.

    Many times companies select the choice that looks best using traditional methods, and ignore candidates with a fresh perspective.

    Innovation comes alive when the boundaries of traditional habits are broken.

  7. 5 Management ZINGERS - Vol 1. No1 on January 13th, 2008 2:01 pm

    [...] Innovation Lesson From the Apprentice by Stephen Shapiro. I always enjoy reading Stephen. This post based on a recent Apprentice show focused on selling hot dogs. You will learn a hot dog is more than you think: 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. [...]

  8. Measure Innovation NOT InnovationS | Business Innovation Speaker and Consultant Stephen Shapiro on March 24th, 2009 4:22 pm

    [...] one of my favorite blog entries, “Innovation Lessons from the Apprentice,” I discuss how measuring hot dog sales, stopped one team from being creative. As a result, their [...]