Food Innovation Lessons from Droid Cell Phone Manufacturer

Food Innovation Lessons from Droid Cell Phone Manufacturer
Tags: Business Strategy and Profitability, Food & Beverage, Operations Management
September 6, 2010

How could the manufacturer of Droid cell phones have anything in common with food innovation in the QSR industry?

In fact, we can learn a lot from HTC (Taiwan, South Korea), the company that manufacturers Droid phones – as well as 90 percent of all phones today according to a recent article in Investor’s Business Daily (IBD).

HTC started only 13 years ago after the co-founder attended the Advanced Management Program at Harvard Business School. Michael Gartenberg, partner at research firm Altimeter Group, said “They’re (HTC) not afraid to innovate and push the envelope forward. The result is a company steamrolling ahead with the fastest growth in the cell-phone market, better than even Apple!” Now if that business success summary doesn’t inspire QSR CEOs and Executive Teams, then they need to step aside for another individual who is passionate about innovation. In fact, I wouldn’t want to work for a company that didn’t drive a culture of innovation.

So, let’s think through a few lessons that any CEO or Executive Team could start applying tomorrow.

First, change the culture, and communicate to the entire company that we are going to do new things. HTC’s co-founder stated, “I don’t see us as a big risk-taker, but we are committed to taking up a challenge and doing new things.” And their challenge was not for the faint of heart, because the founder challenged his company to transition from a maker of electronics for other firms to building a global brand and becoming a major player in smart phones. Almost 10 years later, HTC expects third quarter revenue of $2.2 billion, up 106 percent from a year earlier. It also expects device shipments to soar 132 percent. Embedded in this story is a recurring theme – innovative companies are very profitable growth companies.

Second, the co-founder of HTC never viewed his company as a big risk-taker. I am sure that a lot of CEOs might perceive a shift to an innovative culture as taking a “risk”, but apparently HTC’s CEO didn’t see it that way. After looking at the sales results Peter Chou has shown, I am putting my money on his approach to risk-taking. He padded his risk-taking with a calculated measurement of the mountain of opportunity in front of him. The IBD story goes on to say that Peter was not afraid to ask others for advice. In fact, he reached out to British Telecom and Qualcomm and asked them for tips on how to build the best phones. I guess that’s another innovation lesson, be humble enough to ask others for help.

Third, HTC embraced new technologies. IBD reports that “They (HTC) made a big bet on Android before the operating system was fully finished and it paid off extraordinarily well. HTC was an early and strong supporter, and still is, of the Microsoft Mobile platform, which has been sputtering in the market the past few years.

Fourth, Peter Chou, CEO, credits HTC to several things that the QSR industry can also benefit from. They started with highly competitive manufacturing, excellent engineering, and strong customer partnerships. He listed other ingredients for success as innovation and marketing. Chou stated that “I’ve been working on innovation for a long time … hiring top individuals, embracing them, and setting them free to innovate.”

He also said, “When they (HTC) face difficulty, it can be easy to compromise. We encourage people to take risk and encourage and challenge them to create something exciting. You need to have passion and set high standards to achieve that.”

It's stories like HTC and the encouragement of Dr. Dipak Jain, recent Dean of Kellogg School of Management, that motivated me to start The Food Innovation Institute last year as a venue for helping QSR companies create and cultivate a food innovation culture that reaps profitable results.

The apparent HTC takeaway lessons for the QSR industry are simple:

Make a commitment to create a “culture of innovation”
Define the calculated “business risks,” and take them on
Embrace available new technologies
Seek outside advice when help is needed
Require innovation from every department
Hire people who have a passion for innovation, and cull the ones who don’t
Wear innovation passion continually in front of all employees
Set high standards for innovation, like the founder of HTC

I will never forget my first interview with CEO of Church’s Chicken. It only lasted 5 minutes in a hallway, but he managed to include the phrase “think out-of-the-box” four times. There was never any doubt about his passion for innovation!