Tuesday, April 24, 2012

Lessons in Innovation: Peter Drucker Goes Bananas - Rick Wartzman

In his latest column for Forbes.com, Drucker Institute Executive Director Rick Wartzman examines an investment by Dole Food in a company called Healthy Foods LLC, whose so-called Yonanas machine turns bananas that are starting to turn soft and brown—consumers’ No. 1 complaint about the fruit—into a tasty frozen dessert.

With its investment, Dole is illustrating a principle that Peter Drucker “thought every company should aggressively seek to implement: finding ‘hidden opportunities’ in problems or threats,” Wartzman writes.

“Any threat to a business or to an industry is an indication of a change in the environment: in markets, in customers or in knowledge,” Drucker wrote in his 1964 book Managing for Results. “If a business continues to stick to the existing, traditional, established—or denies that anything else is possible—a change may destroy it in the end. But a change should always be an opportunity to do something different and profitable.”

Wartzman notes that “for Dole, the fact that bananas become mushy may not constitute a truly dire threat, but it certainly hasn’t helped business at a time when per-capita consumption of the fruit has been declining.” “In most households,” Wartzman quotes Dole executive Marty Ordman as saying, “bananas with brown spots are relegated to the wastebasket, and Dole research has shown that consumers abhor waste.”

“Once they own a Yonanas maker, however, consumers actually seek out bananas that are already quite ripe or even spotted,” Wartzman explains. “Grocers can now continue to display older bananas as ‘Yonanas-ready’ or package and sell frozen bananas as a value-added product. All of this is expected to drive higher banana sales, along with sales of other Dole frozen fruits.”

According to Wartzman, among the machine’s top fans is Dole Chairman David Murdock, “who obviously understands what Drucker meant when he wrote: ‘Dangers and weaknesses indicate where to look for business potential.’

“Are you actively hunting for such potential?” Wartzman asks in conclusion. “As the folks at Dole can attest, you’d be wise to keep your eyes—if not your bananas—peeled.” via thedx.druckerinstitute.com

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