Imagine a group of executives huddled around a board room table. They are staring so intensely at their annual sales figures that they could burn a hole through the chart. Their flagship product – one that had carried the company for over 50 years – was tanking! What happened next transformed the company into a century-long market leader. In fact, very few product innovations have done as much to re-shape (literally) customers in the marketplace. Of course I am talking about one of the greatest inventions of all time – the Double Stuf Oreo cookie.
Double Stuf Oreos are unlikely to come to mind when thinking about transformational acts of creativity. In fact, management scholars often specifically single them out as a counter-example, ‘when we say strategic innovation we are NOT talking about Double Stuf Oreos.’ But, beneath the chocolaty surface of this top-selling cookie are some lessons to learn about what creative leadership is and how it can be leveraged.
Double Stuf Oreos represent a model that all organizations can follow – a clear and systematic path to progress: for uncovering an unmet market appetite, for unlocking a winning recipe, and for unleashing the product in the marketplace – which is the icing in the cookie. Moreover the Double Stuf Oreo example stands in direct contrast to the oft-cited Silicon Valley stars Google and Facebook. These companies are masters of singular invention, whose meteoric rise captures the ire of corporate managers – yet whose path to progress is exceedingly elusive. Creative Leadership asserts that reinvention is a more important, yet less emphasized capability that organizations can actually develop.
A 50 year mainstay in the Nabisco portfolio, Oreos represented an iconic symbol of American capitalism. The need to change a winning product is usually an inconspicuous choice. Doubling down on marketing spend, expanding to new markets, or seeking production efficiencies all seem to be less risky. However, in the case of Circuit City extreme cost cutting measures – rather than reinventing a new service-based business model – marked the beginning of its demise. In order to begin the creative process you must first UNCOVER the need for a creative solution. Nabisco recognized the need for a new Oreo and moved aggressively to explore its options.
Determining exactly how to change a product that flirts with perfection is no small task. In the 90s GM attempted to regain its market dominance by designing bigger cars. Toyota correctly read the future direction of the market and invested in smaller, more fuel efficient automobiles. Several years later Toyota became the number one car maker in the world. With this misstep, GM has taken nearly a decade to catch up. The Oreo team no doubt faced many competing alternatives – perhaps a softer cookie, or a new flavor. Alas, through market discovery, pilot testing, and rapid experimentation – the Double Stuf combination was UNLOCKED. The Oreo prototyping program created the bridge between market needs and financial returns.
The final ingredient for creative leadership is to UNLEASH and capitalize on the winning idea. Xerox invented the first laptop, but didn’t see the market potential. Xerox finally commercialized its product several years later, only after Apple and IBM brought personal computers to the market. It was too late. Organizations need to be willing to move boldly on their inventions in order to truly impact the marketplace. And they even need to be willing to cannibalize mature offerings to do so. Production for Double Stuf Oreos quickly scaled. While Double Stuf ate into sales of the original Oreo, the Oreo brand further distanced itself from low cost rival Hydrox, which eventually went out of business.
The Double Stuf Oreo may never be fully extolled as a symbol of creative leadership, but it’s path to progress – uncover, unlock, and unleash – all explain why the Oreo brand – and its now 64 varieties – still sits on our shelves nearly 100 years after its inception.