Innovation- Using The Art of War

To Sucker Punch the Powerful

Chip Evans, PH.D.

Chip Evans, Ph.D. www.theevansgroupllc.com

1

Innovation- Using The Art of War To

Sucker Punch the Powerful

Murky Shire is a company that patented a unique product that was immediately a hit in four distinctly unique core markets.

Murky aggressively pursued any patent infringements and aggressively advertised in print, media and by field sales people located worldwide.

Murky used every method to gain specification and brand recognition, from “ladder based incentive pricing” to “consulting fees”, “rebates”, and “private labeling”. They sold both “direct” under other Murky names, or sold “only” to distributors.

Their reputation was superb, although their clients often saw them as “the only choice” and “arrogant about their position.

Their core product they coated with chrome, despite knowing the environmental issue and knowing it was not conducive to wet environments without rusting or peeling, chrome being toxic when peeling and rusting twice as quickly.

Other safer finishes were available but offered only at much higher prices (although no higher in cost to produce).

The patent ended and many competitors emerged with similar products. None were innovative, but mere copies of Murky shire at lower prices.

Murky shire maintained 80% of the market even after the patent expired, based on the 20 years of name brand build up and creative “back end” pricing.

A classic entrepreneur famed for “fighting the war” noticed. His strategy was always built on The Evans Group premise: “steal the power by acts of honest larceny”.

This entrepreneur hired The Evans Group LLC for any new venture or turnaround and gave the keys to the car and said, “DRIVE”.

Chip Evans, Ph.D. www.theevansgroupllc.com

2

Using our 4 legged stool concept we defined our “attack “ using innovation built around The Art of War by Sun Tzu

Researching, defining issues, outlining steps all helped innovation, not invention, create. Invention is a part of innovating ONLY after the method of innovating is defined, and we

saw “go after the soft unders” as key. We recognized Murky Shire had:

The brand

The bribe

The core client

The buying groups

The specifiers What they did not have was:

Integrity

A great product; it could be easily improved-they did not know their clients

A true knowledge of their core competencies and weaknesses

An action plan “in case of fire”

Our new company was born. We located in a southern non-union market and bought second hand equipment, highly refurbished, but no productivity cost investment.

We paid factory workers low wages and high “Pay per quality piece” incentives so that they earned more, had loyalty and produced quality.

Instead of multiple finishes and styles we limited to one finish, not chrome, but a higher quality epoxy that did not peel or rust, was 200% safer, and could be used everywhere. Our costs were cut by mass-producing one style.

We changed four key “inventions” from client feedback (first step made) and patented each “invention” immediately.

Each invention was “little stuff” that all clients wanted or learned to want and set us apart from the other competitors.

Easy stuff so far, and no brain science

Chip Evans, Ph.D. www.theevansgroupllc.com

3

First we innovated:

Made the warranty 50% longer

Lowered costs by 50%

Made “one finish for all” and guaranteed the reasoning.

Created “invention” add ons that the clients wanted and added no real cost to the product

Created a catchy name for the product and unique color

Then we went to war:

Pull through/push thru

We approached every buying group directly with better programs, only to be turned down

All clients of size we met, including specification architects, and “pitched” the brand; no one would make the change from the “brand or the bribe”.

Advertising was aggressive at trade shows and in print, proving that many of Murky shire’s claims of value were false.

Only a bit of armor was chinked.

Now in innovation within The Art of War we practiced the most bloody of moves: we “pulled through” and went direct to each client end user and offered “factory direct pricing”, “pulling through” and breaking every part of the distribution chain’s “rules of proprietary”.

To the direct clients we added to warranty, gave major “testing concessions’ and treated them like Gold. Slowly large clients began moving, one after another.

The traditional distribution channel was horrified and saw “pulling through” as marketing against them. It was.

Yet, we “saved” a discount to offer to all the many buyers who had turned us down before and went back with “programs and incentives”.

In two years the primary brand spec had changed to our product, and Murky shire was caught trying to patent and invent new and more innovative products. Again, not researching their market they found out too late that the product needed no more innovation and “new and different was too costly”. And… a few clients were beginning to wonder about being over charged for “unsafe product”.

In five years David beat Goliath and sold out to a large public company, selling as the # one producer in the U.S.

Innovation, invention, and The Art of War