Best Buy used Strategos Innovation Practitioners to create a disruptive innovation model. Strategos laid out a model based on discovery and rapid-prototyping that Best Buy adopted after pulling in 35 different senior managers and directors from various parts of the organization to work on the discovery, action, and realization phases.

Innovation Style

Best Buy’s innovation style was based on pushing the limits of an idea to find out how far it could be taken before it ceases to be effective. However, the drawback with this approach is the cost of failure, as was demonstrated by failing to integrate into its core business the high cost acquisition of MusicLand. It is imperative nowadays to validate the assumptions before stretching the limits of the idea in the field- a pure trial-and-error methodology will tend to burn more cash than it will bring in the long run.

Size and make-up of Innovation team

People were too high up in the food chain- directors and senior managers. Why not involve retail managers, or even customer support representatives from the different product lines? Does not seem to be participatory bottom-up, but is more oriented towards strategy formulation by senior management without significant representation of the lower ranks.

Generally, speaking

1.     35 is too many for a static team, however, this was a dynamic team that reconfigured itself at each new step in the innovation process

2.     Multiple viewpoints from a large team from cross functional domains serve the process better

3.     Even a single new idea coming from this team would have served the purpose for a new business innovation

4.     More people might have been better from a product development standpoint- diversity is key here. Operational viewpoint also reflected in addition to business development

Strategos role

Strategos coaches played an advisory role, and from a strategy-input perspective- a rather perfunctory role. They laid out the innovation and achievement model, but did leave the gory details to the teams. Consultants are viewed as experts and are usually the ones not only setting the overall direction, but also working alongside the firm’s employees in achieving the first-level milestones. Strategos did participate more at the end of the Action lab cross-questioning the venture pitches from the various teams. This would have been extremely useful to the teams.

Future of Innovation at BestBuy

Best Buy must continue with the innovation capability internally built, maintained and improved by its own employees, who now get a direct stake in the success as they are assigned key responsibilities in leading the charge. Advantages of going with the 35 innovation mentors that worked with Strategos include strategy/task-ownership on part of the employees, purpose behind putting the necessary hard work for identifying, prototyping, presenting, defending and realizing the ideas.

Cons of acquiring innovation externally via acquisitions or via consultants include problems with integrating these into core capabilities; especially, since these germinated outside Best Buy. Ownership of managing the integration, acquisition will come to be seen as administrative overhead by those who are creatively inclined and are passionate about the innovation model Strategos introduced.

To this effect, Best Buy should discontinue Strategos, but not its innovation methodology. It is beneficial to have the venture-funding type model for germinating and realizing new ideas- creates a young-startup type feel for the firm, senior managers take interest in implementation of the new ideas more than simply maintaining the old business models. Expands the pie eventually. An option is Use the 35 people and consult with Strategos periodically. It is also wise to start from a hypothesis for each SBU, however, the drawback is entirely new ideas will have difficulty surfacing soon enough. One option is to start from a current failure- why did integration of MusicLabs fail? It is okay to focus on hypothesis driven problem-solving, however, lasting innovation has been proven to result following a process of discovery.

An option is to involve Strategos to help fix the problem using a generic innovation solution- figure out why integration failed. Leverage the innovation mentors- 35 count- to lead the charge for similar projects throughout the firm. However, check in with Strategos periodically to determine suitability, best practices and use their general know-how in the process. The problem facing Best Buy is the classic bottom up vs top down strategy formulation- should it look at what is already used in the trenches and try to improve upon it- by drawing from it, or should it start fresh and diverge as much as possible using brand new visions and ideas, before it converges to a few business-worthy ones.

Strategos did teach Best Buy how to catch their own fish proverbially by remaining hands-off to a large extent. This made the idea adoption is easier because the ideas came from Best Buy leaders.

Best Buy needs to be patient. Whirlpool gave itself 5 years to bring innovative ideas to market- takes time- but drove 25% of sales from the new ideas.

And don’t forget to de-risk the new ideas. DE-RISKING is the last phase of the innovation process. More on de-risking on this blog site!