One of the motivations to write The Power of Little Ideas came from Stephen, the guy who painted my house. We hired Stephen and his crew because he had done great work on many neighbors’ houses. We weren’t disappointed – he did an excellent job on mine, and I would recommend him to anyone. He not only painted the house but also helped my wife and me decide which colors to choose, fixed the gutters, and did many other small repairs around the house. But hiring Stephen and his crew also illustrated something about innovation.
When Stephen submitted his estimate to me for the work, he told me he planned to use Sherwin Williams paint. He explained that it was a good, high quality paint, but also that he preferred Sherwin Williams because of the service they provided him. He told me how easy it was to work with Sherwin Williams, how close the local Sherwin Williams store was, how they would help us with color selections, and that they gave him free same-day delivery if he ran out of paint or supplies.
I did a quick map search of Sherwin Williams and was surprised by what I found. Within a five-minute drive of my house in suburban Philadelphia, there were five Sherwin Williams paint stores (six, if you count one dedicated to automotive finishes). There are only three Starbucks within the same distance.
I stopped by the Sherwin Williams store in my neighborhood and met Tom, the Sherwin Williams sales rep who works with Stephen, to understand why Stephen liked the company. Beyond the many locations and good quality paint, Tom and others from Sherwin Williams also support Stephen throughout the process. Tom will come out to the job site to help Stephen estimate the job. He’ll help Stephen develop an accurate plan for each phase of the project, and estimate how much labor and material will be needed at each stage. He’ll check Stephen’s proposal to make sure that all the necessary materials and equipment are included, then make sure that the right amount of material is available when needed. Tom starts his day an hour before his store opens, because that’s when his customers – the painting contractors – start their days.
During the job, Tom allows Stephen to adjust the amount of paint as needed. For example, if Stephen buys 50% too much primer, he can return the unused cans for a full credit, and Sherwin Williams will adjust the amount of finish coat paint for the job, preventing waste and extra expense (while primer paint can usually be returned, custom colored paint for the finish coat can’t). Tom will check the daily orders and suggest items that Stephen might have forgotten. At the end of the job, Tom will help Stephen write up an estimate for the next job (and, as any homeowner knows, there’s always a next job).
As I looked around the Sherwin Williams store, I saw the expected paint color displays and marketing brochures. By the door there was an offer for a color consultant to come to my house to help me choose paint colors. On the wall was a full range of brushes, tools, and gadgets to help painters. While I was waiting for Tom, the sales clerk showed me a device that makes it easy for painters to cover the bottom of their shoes when they come in the door, and told me about a tool that automatically applied mud to drywall tape, reducing materials use and labor cost. Tom told me about the annual show he goes to in order to learn about new devices, techniques, and products for painters. He explained the contractor program that rewards painters like Stephen with increasing discounts as his volume of business increases.
Sherwin Williams is proud of the quality of their paint. But my house isn’t covered with Sherwin Williams paint because I thought their paint was better. In fact, the consumer ratings magazine I trust recommended a slightly higher-rated paint at half the price. But Stephen explained that only about 15% of the cost of a painting job was the paint itself, and if I wanted him to use a different paint the cost of the project would be higher.
Sherwin Williams isn’t selling paint. They’re selling a complete service to small painting companies like Stephen’s. They support those small businesses with a complete end-to-end service, and they’re doing quite well in the process: sales in 2015 are up 46% over 2010, and profits are up 128% in the same period. They’re constantly innovating in their core product – including a microbicidal paint that kills common bacteria like Staphylococcus and E. coli on contact. But they’re also innovating in the services they provide to painting contractors and the complementary products that they sell in the stores.
This approach to innovation doesn’t fall neatly into the usual categories that we see in the business press. Sherwin Williams isn’t disrupting the paint industry, nor are they sailing for blue oceans or acting like a lean startup. They’re not revolutionizing the future of house painting. But they’re also not simply improving their core paint products. Their approach to innovation is unique, and it’s different.
In my previous book, Brick by Brick: How LEGO Rewrote the Rules of Innovation and Conquered the Global Toy Industry, I told the story of how LEGO adopted a similar innovation approach in 2003 to recover from their brush with bankruptcy. Like Sherwin Williams, LEGO’s success hasn’t come from just offering a better core product, and hasn’t come from reinventing the future of its industry. In fact, LEGO tried both of those strategies and failed. The successful strategy for both companies was to go back to the company’s core product, understand what the customer wanted from that product, and innovate around it. This approach to innovation, neither incremental improvement in current products nor revolutionary disruption of those products, has proven to be a successful innovation strategy for Sherwin Williams, LEGO, and many others.