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Why innovation is not everything - The differing fortunes of Philips and GTP

By By Elorm Desewu
Business & Finance Why innovation is not everything - The differing fortunes of Philips and GTP
AUG 31, 2015 LISTEN

On June 18, 2015, Royal Philips, the global big name in electronics and electrical products, launched a big initiative against the counterfeiting of its products in Africa. It was a huge affair, and made all the big headlines.

According to Ghana News Agency reports, Philips’ General Manager of the Consumer Lifestyle Division, Chioma Iwuchukwu, said the Anti-Counterfeiting Initiative would empower African consumers and also disclose the scale of the counterfeiting problem.

In the same reports, Felix Darko, the General Manager of the Lighting Division, was even more excited. He said to the GNA that the initiative was based on a 16-digit code on a hologram sticker on Philip lighting products that could be sent by customers through SMS to a shortcode, 3110, for immediate verification. This innovative system, he said would not only comfort consumers about the originality of the Philips products but also inform key stakeholders in Africa about the dangers of counterfeits and help reduce the problem in Africa.

GTP’s Earlier Eye-Catching Innovation
It is interesting that exactly three months and two weeks before Philip’s exciting launch of its initiative, GTP, a division of textiles giants Premium African Textiles (itself part of the global Vlisco group) had announced an almost identical program in partnership with a group called Goldkeys.

According to a congratulatory post on GTP’s official blog: “GTP now makes it even easier for you to identify genuine GTP products from fake ones with a new authentication program known lovingly as “OGA” (or Original, Genuine, Authentic).”

It is anybody’s guess whether the launch of one program influenced the other. But there were some significant and interesting differences in the angles that both companies took to their launch of these smart and eye-catching innovations.

Different Strokes
While GTP was taking a branding and customer-focused approach and targeting its language to big up its brand in the customer’s eyes, Philips seemed to be focusing more on ‘stakeholders’ and concentrating on the general problem of counterfeiting in Africa.

Seeing two major brands launch massive innovations and public campaigns within three months of each other naturally caught the attention of many journalists, commentators and bloggers like myself, and the companies enjoyed lots of media coverage. This clearly shows that innovation or being perceived as ‘innovative’ is a major way to position a corporate brand and refresh the image of a company.

What this article will show though is that there are both risks and opportunities, and a company that tries to use the ‘innovation’ approach to achieving any of its goals, whether for marketing or for operations, needs to understand that ‘execution’ is as important as ‘communication’, and that ‘communication’ needs to be supported by constant execution.

With all the focus nowadays on "innovation", and "African innovation" in particular, companies are under growing pressure not to be left behind. Not a day passes by without an announcement of a competition or "hackathon" to find great innovations in Africa. Most of these competitions and contests are expected to be funded by big companies that want to be seen as innovation-friendly. These companies are often funders of the many hubs springing up all across the continent claiming to be promoters of innovation. Innovation has really become fashionable. But being trendy can easily lead to companies leaping before looking.

To get the full meaning of this point, let’s look at how the two companies differed in their approach in rolling out their innovation.

More On GTP’s Strategy
Like Philips, GTP also started out with a big launch at a plush location in Accra before an audience of registered textile dealers from all over. In a smooth speech by its Marketing Director, Stephen Badu, the company spent time extolling its brands and created the impression that the new anti-piracy technology they were launching was all about “the next stage” of the growth of a highly innovative brand.

In attendance were models from top agencies, and some of West Africa’s fashion luminaries. Members of the press came from TV, radio and print, and all the big broadcasters and newspapers were present. Interviews were conducted on the sidelines even as the launch was happening.

Every journalist there was made to try out the SMS and online verification service live. In most cases the responses were immediate.

The whole program looked really slick.
Customer-Centric & Continuous Execution
A simple message was distributed using infographics all across the print and online media:

1. Find the new silver stickers on the top left-hand corner of all GTP variant labels

2. Buy and scratch panel on the sticker to reveal a 12-digit code

3. Text the code to 1393, toll-free on all telco networks

4. Receive a response within seconds confirming whether the product is genuine GTP or counterfeit.

One may notice that it far more convenient for consumers to send 12-digit codes than to send 16-digit ones.

The next day, interviews continued on various local language radio stations. People who had been able to verify their textiles using SMS called in to praise GTP. The buzz was rising.

Exactly two weeks after Philips launched its anti-counterfeiting program, GTP upped the stakes. It launched a follow-on initiative called OGA Plus. This time not only can consumers verify their textiles by SMS but they could win instant prizes immediately they checked.

Once again, the media seemed to have been mobilised to convey messages across the region. GTP’s social media outlets, especially GTPFashion Blog, started to interact with buyers and dealers on Facebook. A call center was immediately up and running, taking buyers and dealers through all aspects of the promotions.

Many customers and observers like myself were very impressed to see how the various GTP outlets all over the country had become converted into redemption centers overnight so that consumers could claim their prizes immediately they won. If the reader lives in West Africa and has won something in a promo before he or she would appreciate how huge a simple act like redeeming your prize can be.

I talked to a couple of people who had won prizes such as phones and saw the respect in their eyes as they talked about how excited they were that redeeming their prizes had been hassle free. A visit to the redemption center showed that GTP had uploaded the winning details online immediately the winners got their text messages so that everything was happening instantly. In a country where simple initiatives get bungled daily by ineffective operators, the skill with which the OGA Plus campaign was being executed was simply impressive.

ROYAL PHILIPS CHARGES IN
Philips too did an amazing launch program.
Rather than use a locally catchy title like ‘OGA’, Philips opted for something more universal, ‘BUY ORIGINAL’. It also chose to launch in multiple cities: Accra, Nairobi, Lagos. Which was obviously wise and smart as it gave it more mileage in the press on launch day.

Situating the launch in a global context, Philips distributed information to participants highlighting the $250 billion trade in physical counterfeits globally.

Philips took its time to show how seriously counterfeiting is affecting reputations, economies and lives, and how critical it is for the problem to be addressed urgently. This was also simply brilliant. By aligning their corporate goals with a wider social challenge they were banking on greater support from, as they put it, ‘stakeholders’.

After setting the scene so brilliantly, they then turned their focus on their own program:

Felix Darko was quoted by the Press as saying: “Philips wants to work alongside consumers, government authorities, other multinational corporations and relevant organizations to see how we can collaborate together to enlighten and inform the consumers on matters relating to counterfeiting. We urge the public to become more vigilant and question products that seem to be unusually cheap, appear poorly made, or have generic packaging; especially when shopping at more traditional trade stores. We would like to encourage consumers to shop from approved Philips distributors and retailers and look for the “Original” security holographic sticker on our products.”

Everything looked and seemed masterful and on point at the launch. But some key ingredients were missing, and in the weeks following the launch those ingredients completely derailed the initiative, leaving important lessons for any company seeking to use innovation as a way to promote its image and brand as well as solve real operational challenges and problems.

How Philips Tripped and Fell by the Roadside
Firstly, there was no real communication outside the launch itself. Nearly all the communication about the program happened through the launch. There was hardly any follow up in the press.

Secondly, there wasn’t any real effort to drive any kind of social media engagement. I searched in vain for conversations about such an important move by such a big brand and drew blanks everywhere.

Thirdly, despite all the big talk about counterfeiting and its impact on Philip’s business everything seemed very high-level and the consumer, Philips’ customers, was completely lost in the picture. Very little of the communication seemed to have been designed for ordinary Africans worried about buying fake light bulbs.

Fourthly, and most strangely, there was no demo of any innovation to support the claims Philips was making. What in the hologram made it an innovation? After all, holograms have been around for decades and have proved virtually worthless in protecting brands from counterfeiting. Nothing was said. How does the SMS verification work? Nothing was said. So what exactly is anyone to do about the problem apart from get worried sick about all these dangerous counterfeits? Nothing much. Yes, there was some talk about consumers looking out for authorised dealers, but absolutely nothing about how a consumer would know who is or isn’t an authorised dealer.

To cap this strangeness, the shortcode – 3110 -announced by Philips throughout the event and by many press outlets following the launch didn’t really work. In fact, it has never worked. Most of the Philips baby-care and lighting products in town don’t have these new innovations, and the ones that do have this malfunctioning shortcode that has not worked in the two months since the program was launched. I have talked to several dealers who are completely baffled by this strange behaviour by Philips.

Conclusion: Lessons
Why should a big company like this announce an innovation that turns out looking like a scam? For what?

Most marketing experts I talked to about this strange incident were of the view that this is an example of a PR initiative launched with fanfare by the marketing part of the business but with little support and understanding by the operational part of the business. The choice of an innovation as the way to garner attention does not mean that the whole company is fully willing to go along as innovation is very hard and internal resistance is often high. So whilst for marketing the process is fairly straightforward like hiring an agency and preparing brochures, for the operational team there is a lot of change management work that has to go into it. This is why for many companies, innovations get launched and then die slowly or quickly.

Innovation comes with risks and opportunities. And for big companies with enviable brands in particular, innovations only work if the whole company is on board and the different parts of the company, especially the parts that work on execution are fully aligned with the goal of those in marketing. Simply coming up with a concept and pushing it out there is NOT innovation. Innovation requires that a company’s actual day to day activities and investments are shifted to support whatever new process makes up the innovation, and that every part of the company is investing accordingly to roll out the necessary changes required for the innovation to work.

When companies take shortcuts to obtain PR benefits, they get a short-lived high, but embarrassment would surely follow, and what sounded like a great innovation suddenly becomes a messy albatross around the company’s image.

Elorm Dewesu is a journalist and a public communications practitioner

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