Daily Archives: November 17, 2012

Innovating A Mature Product – The Sealy Case

We sleep on one every night.  But unless you suffer from chronic back problems, how many of us give this product (our mattress) a second thought?   Eighty percent are made from some coils, foam topper and some fabric.  Each manufacturer calls their version something different, and we can buy them with more or fewer coils, fluffier foam or softer fabric to suit our preferences.   Does it really matter which brand you buy?  Not to me.  I presume that Sealy, Simmons, Serta (not sure why they all begin with “S”) are all comparable, and I buy what’s on sale that feels comfortable for the 2 minutes I lie on it in the store. What’s the big deal?

Well, when you are in the mattress business, and the sales of your premium brand starts to plummet with new energetic competitors entering the luxury mattress segment around 2002  (made even worse after the economic melt-down of 2008) it is a very big deal.  That is what was happening to the Stearns and Foster brand of the Sealy Corporation.

Can you imagine a meeting at the corporate office where the Brand Manager stands up and says “Sales are in the toilet.  We think it is related to the economy.  Our plan is to RAISE prices by 40%!”   Can you imagine any sales leader in their right mind who would make that case?  Well, that is what they did.

To the credit of Sealy management, they decided to try a new approach, applying a creative problem-solving methodology called Design Thinking.   They partnered with the Boston office of design powerhouse IDEO (the people who became famous for inventing the first computer mouse for Apple).

Like many companies that have been around a while, their R&D/Product development department was a stand-alone group that operated in their own sort of ivory tower, bouncing bowling balls on mattresses, and such.  But the design thinking process approach they used with their Stearns and Foster problem called for a new way of working.

So, with IDEO’s help, their engineers from the Trinity, North Carolina headquarters were sent out with sales and marketing people to visit retailers in New York, Atlanta and Chicago.  They spoke to customers (yup, that’s a novel idea), interviewed retail sales clerks and they studied their competitors’ products not through the eyes of the technicians in the R&D facility, but through the eyes of the sales people who were talking to live buying customers on a daily basis.

When they watched customers on showrooms, they observed some who walked up running their hands along the mattress top, remarking about how smooth it was, or noticing the decorative patterns on the fabric.   (In some ways this seems counter intuitive when you consider that none of those attributes are ever appreciated by consumers when the product is in use.  After all, it is covered with blankets and sheets.) Yet, these things seemed to matter, no matter how irrational they may be.

The redesign team learned that unlike yours truly, many customers take their mattresses quite seriously and see them as reflections of themselves.   Mattresses needed to have a kind of personality, right down to the embossed fleur-de-lis pattern on the mattress cover that hearkened back to the early days when Stearns made seats for high-end carriages in the mid 1800s.

Armed with these new consumer insights, marketing and engineering managers from Sealy sequestered themselves in IDEO’s Boston offices for eight weeks to re-think their product design.

It was natural for Sealy – as they saw sales decline dramatically after the stock market crash and following economic downturn–to focus on cost cutting.  However, the process they followed kept the team away from the corporate bureaucracy and allowed team members to influence design not based so much on costs, but on what they were learning from customers and field sales people.   While other mattress manufacturers were cutting costs, Sealy’s creative problem solving team went the other way, adding material and labor cost, resulting in their raising prices a whopping 40 percent (from $1,000 to $1,400 per mattress)!

The results?  Since the newly designed products were launched at the end of last year, they broke all previous sales records for the product line.

Why did it work out so well? Here are some observations:

Immersion research is vital.   The final design version was pretty interesting when you consider how much effort went into improving the physical appearance of the product in the showroom. (These are insights not attainable any other way than by direct observations in the field.  You can buy your competitors products and reverse engineer them all day, and never understand how consumers FEEL when they are buying them.)  One of our biggest enemies is what we all think we already know.   We all believe we are good at our jobs (experts in fact).  We form opinions about lots of things over time, our customers, our own organization, competitor behaviors and so forth. Once we form our opinions though, we tend to hang on to them tenaciously – a dangerous thing in a constantly changing world.   So any creative process is aided by field immersion learning. Get out of your cube, your office, your building and even your industry to look at things through different lenses. I have never seen one such experience yet where observers didn’t learn important new things.

This cross-functional approach was crucial.  Getting sales, marketing, product development and R&D together to solve a problem seems so logical, but is yet too often avoided.  We never have time.  It will cost too much. It will slow us down. (Pick your favorite excuse.) Forming eclectic teams of diverse people is highly productive.  You want to surround yourself with people who don’t normally think like you do.  You then want to teach your teams to build on each other’s ideas rather than criticizing them.

As reported in the Fortune article referenced below, Allen Platek,  Sealy’s VP for new product development, reacted this way to the new way of working together to solve problems:  “[It] was one of the most fun times of my career.  Prior to this, what we did was in silos. Sales did their thing, marketing did their promotions and ads, R&D developed innovation, and then it was all thrown to operations. We had a disjointed effort.”

Get people away from the bureaucracy.   The truth is that when we are in our familiar work surroundings, we adopt many of the paradigms, biases and bureaucratic practices that normally accompany that environment.   This design work at Sealy was not done in North Carolina, but in Boston at IDEO.   There, they weren’t having people second guess them each day, posturing or trying to exert influence on the process for any reason.  They didn’t have to follow normal procedures, get approvals and so forth.  The result was speed and freer thinking. Outside facilitation can help here as well.

Senior leaders were willing to let go.  This whole process can be destroyed if senior leaders are too afraid, and decide to second guess or overrule their creative problem solving team.  Sealy executives were willing to let go and see this experiment all the way through.  They trusted their people to use their best judgment and to trust in the process as well.  An initial success encourages more experimentation and you can really build momentum.

I have been sharing in prior posts examples from public education, federal and municipal government, and now here in the for-profit sector.  We are in the throes of a similar bold experiment like this at Xavier as well, as we are guiding over 100 people in various cross-functional teams through this same creative problem solving process experience used by Sealy.  Xavier has assembled a team of globally experienced “innovation guides” and we are using Innovation as a transformative process for our entire organization.  For us it is too soon to demonstrate the success of our outcomes, but I can see that some exciting new ideas are already starting to emerge, and the we have not before seen such cross campus energy as we are working together across our own internal silos.

At Xavier we teach and guide external client teams through both Creative Problem Solving and Design Thinking projects.    So pick whichever case example I have written about as a starting point: NY Public Schools, the VA in Washington (and with the 100,000 Homes Campaign), St. Vincent’s Medical Center (Birmingham AL), Dartmouth Hitchcock Medical Center (Hanover NH), Google, or IDEO.   They all have some common threads.  Start with them, and see if you can add your own new improvements.

Finally, if you haven’t seen this before and want to see Design Thinking in practice, here is an 8-minute video showing how IDEO designed new shopping cart in five days.

Other Resources

Reinvigorating the Stearns and Foster Brand for Sealy, from IDEO

Next Generation Posturepedic for Sealy, from IDEO

Sealy goes to the Mattresses, by Daniel Roberts, Fortune/CNN

5 Innovation Secrets from Sealy, by John Kotter

IDEO helps Sealy revive its mattress sales via design, by Reena Jana, Smart Planet


Filed under Innovation, Leading