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The Blue Elephants Institute
Teaching & Using The ‘New’ Experimental Method for
Social Sciences, Business, Law & Education
Howard Moskowitz, Ph.D.
Abstract of the proposal (Nov. 2007)
We propose to create the Blue Elephants Institute to specialize in promoting new
knowledge and business competitiveness using principles of experimentation. The
basics of the institute are well established, and are to be found in numerous
publications by Dr. Howard Moskowitz and colleagues, as well as in a recently
published, widely acclaimed book ‘Selling Blue Elephants – How to make great
products that people want before they even know they want them’ (Wharton
School Publishing, Imprint of Pearson Education).
The Institute becomes a center of excellence for RDE (Rule Developing
The Institute performs three main functions.
1. The Institute trains people in courses, and puts on seminars and conferences
for a broad spectrum of individuals in academia and companies.
2. The Institute contains its own a research center, funded by companies and
government agencies, to broaden the way RDE can be used as a business tool.
The research is, of course, publishable, and the research center may be
affiliated with various universities in different countries.
3. The institute executes custom, company-funded projects with its affiliated
1. Introduction – some observations & today’s need to re-
establish competitiveness in all branches of endeavor
1.1. The problem and opportunity – today’s pervasive lack of ‘innovative’
spirit and innovative discipline in America and in Europe
Some countries (really people, but countries really hit the mark) are innovative.
The people want to try things. I see this in Asia. Certainly there are skeptics, but I
don’t have this sense of skepticism. Where do I see it you ask (or may be you
don’t)? I see it in their willingness to experiment, to make different combinations
of products or concept ideas, test them, and see what wins. I see it in the eyes of
the marketers, the researchers, the product developers. I don’t see it everywhere –
but I do see it in the young, the under 35, the ones who will inherit our world. I
think its Asia, but I’m not sure. I don’t have a crystal ball. But I do have eyes and
ears. They’re hungry in Asia – hungry for what we in the west have done, hungry
enough to study all night, to live without expecting ‘what’s due them’, hungry to
bust away the comfort of the past for the challenge of the future.
And the other side, the dark side of this feeling. Unfortunately, and with profound
distress, I have to say that it’ us in the west. We have given away our hearts.
We’re not studying math, we’re really not particularly well educated any more
(no one reads), and we don’t welcome experimentation. We don’t relish doing
homework, and for heaven’s sake, we’re all busy on the next big deal, the next big
opportunity, or simply hiding from the hard work to be done.
I haven’t met a company in my 31 years of business life that I can really call
consistently ‘innovative’, Oh sure there are lots and lots of companies that I
would call ‘anti-innovative’. These are the ones that stand behind processes,
which pride themselves on norms, and which proudly proclaim their demanding
adherence to rules. Smitty Stevens (my Ph.D. professor at Harvard in the mid
1960’s) was fond of saying that ‘standardization is the last refuge of the
unimaginative’. I could help putting that phrase into this proposal – sort of an
underhanded blow, but it always warms me to use his phrase. It was and remains
so true, just like so many other things he said when he sat with me and taught me
to think, and write.
Back to the introduction. Okay, there is no company that I’d call
consistently innovative over 31 years. But .. and this is important .. there are
companies that I’ve dealt with which have done innovative things. We (i.e.,
Moskowitz Jacobs, Inc.) did Prego® pasta sauce with Campbell Soup in the mid
and late 1980’s. We did Grovestand® Orange Juice with Tropicana in the mid
1990’s. We’ve done novel credit cards, and interesting electronic technologies.
Some of these are downright innovative. So, what’s happening here? Why isn’t a
Tropicana, then, considered to be a highly innovative company? After all, it did
come up with the notion of pulp as a highly desirable, value add ingredient that
made it lots of money.
Well, when I think about these companies what strikes me is that the
episodes of innovation are just that – episodes, limited in time, with certain people
and not others, with certain needs and in a certain time. There’s no general rule,
so if you, the reader are expecting me to pontificate about what makes up these
special times, and what constitutes these special people, then you have a long wait
ahead of you. Right now I can just tell you that it’s not a company, but people in
specific situations. If we can harness this creativity, formalize it, put it into an
institute, and teach it for both academic and commercial ends, then we will have a
unique opportunity to create the future. Specifically we will establish a thought
leader institution, as well as provide it with a potential ‘evergreen’ source of
1.2 One solution – RDE (Rule Developing Experimentation)
Rather, it would be really wonderful is people started thinking, started
experimenting, trying to see how things work, not just taking things for granted.
Let’s go back to the days when people had it harder, when it was really gratifying
to invent something, to make it better, to make it work more efficiently. Try
finding rules, not just insights that come from a momentary, undisciplined, and
(heaven forbid) perhaps misleading inspiration. Try homework, try experiments,
and try to become a little more rigorous in work. And for heaven’s sake – do it
seriously. American’s well-being depends on it.
2. The vision of the Blue Elephants Institute and some
2.1 How the idea of BEI came to be – an institute patterned on Deming
The basic idea behind the BEI comes from our vision that systematics in
product development, in communications, package design, and even public policy
will make a company and perhaps even a nation more competitive. Just look at
the past fifty years, after World War II. W. Edwards Deming, the statistician, was
brought over by Japan to help them recover from the devastation of the war.
Deming’s principles put into operation created a Japan that became a juggernaut.
These principles of quality, of treatment of workers, and of general policy in the
running of a production system, sufficed to turn a nation into a veritable
powerhouse. The Japan that was before identified with cheap items of poor
quality became the Japan to be feared. We are seeing that all over Asia, as the
low-cost producer becomes first the better-quality producer, then the
acknowledged quality and style leader.
China and India are, of course, two of the next frontiers. We at
Moskowitz Jacobs were visited 11 years ago in 1996 by the head of CITIC, one of
China’s largest state owned companies. The visitor’s request was simple – ‘share
with us your development technology, IdeaMap® and Product Engineer®, so that
we too may create ideas and make products like they do in the west. Our goal – to
create products that will make us self sufficient, that we can understand the
‘tastes’ of the west, bring some of them to our country China, and then create
factories to make these products’.
His visit was revelatory. Here was an opportunity to teach the world how
these approaches work. Over the years I have thought of how these approaches
might become the foundation of an institute so that all developing countries might
prosper. I’ve written many books and articles, and just recently have discussed
the grand vision of an Institute, which I call the Blue Elephants Institute (BEI),
after the book ‘Selling blue elephants; How to make great products that people
want BEFORE they even know they want them’.
The really big vision here is that BEI will jump start the developing
economies, by providing them with the tools they and their companies need to
compete world-wide. Just as Deming helped Japan transform into a juggernaut by
production systematics so we hope that BEI will transform the developing
companies into economic and competitive juggernauts through applying
knowledge and experimentation systematics.
2.2 The three components of BEI – an overview
Basically, BEI comprises three parts:
2.2.1 Education. BEI as a training institute. Companies can be trained on the
approach at an academic as well as short course level, as well as contract with the
Institute to solve specific problems, using the knowledge-enhancing approach of
‘Rule Developing Experimentation’, the core of BEI.
2.2.2 In-house research, with graduate students and professionals. The
research methods (e.g., Rule Developing Experimentation) create knowledge-
bases. Some of these are proprietary for clients. Others can be larger-scale, such
as those dealing with social policy. BEI will have this research capability as well,
with funding from the government and from companies. The goals for the
research are landmark studies that are published as complete books, articles in
journals, as well as presentations at seminars and professional conferences
2.2.3 Project and consulting management. Attached to BEI are qualified,
trained consultants who can use the BEI methods, among others, to accelerate
development, create better messaging, and better package design.
2.3 The Institute itself – what should it be – In detail
2.3.1 – Teaching. Everyone loves an institution that teaches. If the Institute is
going to teach then it will be somewhat academic. How will it get the money?
Clearly teaching may be valuable for business, but who will fund it? Will I or the
managing director have to go hat in hand to different businesses to get funding? It’s
pretty unlikely that already-suffering businesses or start-up companies will
voluntarily give money to an organization that’s likely to benefit its competitor as
much as it itself. It’s also unlikely that a big company will be generous either,
without lots of strings attached. Probably the astute manager will counter with an
offer to teach a short course at a low level, for little money, on the company’s
premises. Scratch the idea of teaching as the primary focus of the Institute. It will
turn out to be a bunch of disconnected ‘gigs’ at local companies, for no money, and
a lot of heartache. Not to mention a lot of work for a modest payout at best. On the
other hand, if the Institute can do something else, then it might feature some
optional classes, as long as it doesn’t have to depend upon enrollment in those
classes for its very survival. You can’t live on love it that’s all there is.
2.3.2 - Funded Research. This direction creates the Institute as a research group.
The individuals in the group may have to bring in their own salaries and research
funding. The goal of the research is to create knowledge available to all. The
Institute provides a physical location, a professional identity, and a potential center
of excellence. The Institute could be affiliated with a university or another research
institute, but would not be affiliated with a company. This is an interesting
direction. The key problem here is that again the Institute lives and dies by the
vagaries of corporate largesse. Find a willing sponsor of research and you find an
‘angel’, like the angels who back theater productions. The one problem is again the
competitive nature of the research sponsors. Many will fund research that is trivial,
esoteric, or inapplicable. Everything else is just too ‘close’ to home, too fraught
with the potential that it could give the competition an edge. So scratch funded
research as the key direction. It’s too hard, and the value of RDE is that it really
provides solid data about a product or messaging that a company can use to manage
for profitability and competitive advantage. No one wants to let that cat out of the
bag, and let competitors in.
2.3.3 - Consulting Projects. This direction seems most reasonable. The Institute
becomes a center of excellence, a virtual home to consultants, and a publicly
identifiable entity that represents an approach to enhance business competitiveness.
Consulting projects make a lot of sense. They are private so that a company should
have no problem working with the Institute in the way that it works with private
companies or consultants. The assignments are private, and the results are used for
competitive advantage. The only question is why have the Institute? Doesn’t the
Institute become just another company? This is the sticking point.
3. Getting Buy-In: Tapping the emotions
People aren’t aware of what systematic design in product, messaging and packaging
can do, and even when you bring them along in explanation they still don’t really
want to believe the possibilities. So what do you do? How do you show them what
might be a really good approach for them? What appeal works?
3.1. Appeal to their need to succeed – good idea but the linkage of life success
with systematic homework is at best tenuous. To me, the success gambit is
probably the most obvious appeal. From all the business motivation books I’ve read,
the need to succeed, to make oneself a success, continues to emerge again and again.
The key problem is that there is always a gap between systematics as a way to
approach business knowledge, and success or a way to approach life. People just
don’t see the connection between homework and long term success. They see
homework as solving a momentary problem, and dismiss the idea that long-term
homework has anything to do with this life success. Scratch that. Sounded like a good
idea, and works for some. In general, hard, and if overdone could be a tear-jerker.
3.2 Appeal to their need to make money. I can’t help thinking that this is a venal
way to get to them. Even if in the end they become better people by running better
business, the appeal to ‘you’ll be rich’ is reminiscent of Gordon Gekko’s motto
‘greed is good’. On the other, for some people this appeal works. It hits them with a
no-nonsense, cannot-misinterpret message. I use it a lot more these days. It’s pretty
easy, and I don’t have to qualify my statement with endless restatements in different
phrasings. Money is money is money. By the way, upper managers like this a lot.
Maybe they feel a link between what they do and the money they get.
3.3 Appeal to fear. This ploy is not as powerful as I had thought. I’m always looking
at companies, saying to myself ‘Don’t you see the barbarians at the gate, the
competitors who will eat your lunch?’ Sorry for the mixed metaphor – both of them
just came out at the same time. I’m beginning to believe that in fact our business
colleagues in companies are pretty immune to fear. They must have suppressed it
over the years, so that everything is just wonderful all the time. Sometimes they
actually appear that they believe it. Perhaps the denial is what keeps them sane, when
all they have to do is look around and see that the barbarians are knocking at their
3.4 Appeal to a bigger vision. This works. It’s a bit longer build, and appeals
intellectually, especially the top management. It makes sense to them that they will
succeed more frequently and more financially if they know their product, messaging,
and packaging. There’s nothing to escape from. The lower level managers don’t find
this particularly interesting because they’re always putting out local fires. The top
managers, however, those in the so-called C-suite, want to hear about it, and seem
really to accept the notion that knowledge is power, power brings business success,
and finally business success brings money, security, fame, and even fun.
4. Next steps
4.1 Why the Institute is important – teaching structured discipline with tools
The key to all of the success is discipline with a structure. The Blue Elephants
Institute will provide that structure. Thirty plus years in business suggests that the
structure plus discipline works. For example, some companies do homework,
whereas other companies talk and talk, have rules, but don’t do homework. In my
company’s business of creating winning messages/ideas (concepts), products and
package design, doing homework means creating lots of combinations or test stimuli,
not just one. Then, homework means testing these combinations among consumers,
looking for what wins, and for a pattern of why winners win, and losers lose. Finally,
homework means going beyond these test stimuli (concepts, products, package
designs) to create newer and better stimuli based on the learning, and then re-testing
to make sure that the winners is improved upon.
This strategy of ‘test – discover – reengineer – validate’ or TDRV (not easy to
pronounce) wins again and again. In fact, if the testing is done with systematically
varied stimuli, rather than with ‘best guess rifle shots’, then the company (or maybe
you) end up knowing ‘how the world works’. The company knows exactly which
messages, which product features, which package colors and shapes ‘drive
acceptance’. It becomes pretty easy to create winners, and to know why they are
winners. So just testing lots of stimuli puts the company way ahead, on the way to
But, there’s more. Now let’s suppose that there are different mind-sets in the
population --- namely people with different wants and needs. For instance, there may
be some people who want a product because of its strong ability to do the job (like a
cleaning soap), whereas others who want the product because of its aesthetics
(fragrance, look/feel, even image). If the company systematically varies the product
on a number of characteristics (e.g., 6 or more), makes lots of prototypes and tests
them, then all of a sudden these prototypes will cover a broad range of characteristics.
The company is likely to appeal to the different mind-sets, not with one product, but
with several. It’s a matter of discovering these different mind-sets or preference
groups, based upon the pattern of responses to the stimuli.
All of a sudden the homework pays off.
1. First, the company gets to explore a wide range of features and sensory
characteristics (for products), ideas and emotional statements (for concepts), or
graphics (for package design).
2. Second, the company identifies winners, and what aspects under the company
control drive those winners
3. Third, the company identifies new groups of people, with different preferences,
and what aspects drive those groups or segments. The company can now create
new products, designed specifically for those groups, making the company
4. Fourth, when the company knows what drives both acceptance and other
impressions of the product/concept/package, then it’s straightforward to engineer
new stimuli featuring aspects that both differ from what’s on the market (the
innovation part), and also promise high acceptability (the business hurdle part).
Knowing the rules helps make newer, better, different, even unique products.
Making this systematic knowledge a company priority, doing it for every product or
service that the company offers, is quite likely to convert the company into an
innovative company. It’s hard to fail when the homework itself produces the
knowledge-based key to new product innovation, time and time again.