How to Innovate
What do designing innovative jet fighters and shoes have in common? It’s an open secret that hasn’t changed in 80 years.
America’s narrative
Last week, I saw this headline: “Lockheed wins US missile defense contract worth $17 billion,” a day or two after the attack by Iran on Israel.
Typically, this is a type of news I pay little attention to nor am I interested in that much. However, when the airwaves are filled with news, analysis, and live updates about not just one but several wars, it does pique one’s interest.
It did mine, not because I’m interested in wars or military matters—I’d prefer there was no war—but because the business of war is about the business of innovation and information.
Governments work with corporations, institutions, and experts to manufacture an impossible reality possible by way of product innovation and perception management.
“The business enterprise has two–and only two–basic functions,” Peter Drucker famously said. “It’s marketing and innovation.”
What is happening between Russia and Ukraine, or between Israel, Hamas, and now Iran, is an unfortunate case study of who can outdo the other by demonstrating their military superiority, i.e. product innovation, and how that superiority helps create a perception, i.e. marketing.
In addition, war is a conflict between two individuals, entities, or sovereign states, both sides believing that they are right and have the right to attack. They cast the other side as the enemy.
This provides a fertile ground for a compelling story with tension, suspense, and drama. It is often applicable to many nations and citizens with direct, dire, and unfortunate consequences.
Humans are creatures of stories. Stories create perception, which then informs and forms, correctly and incorrectly, our reality.
“At my direction,” said US President Biden in a recent statement, “the U.S. military moved aircraft and ballistic missile defense destroyers to the [Middle East] region. [...] We helped Israel take down nearly all of the incoming drones and missiles.”
This is product innovation and marketing at work, together.
For the last hundred years, America has been at war constantly with someone somewhere in the world, often without being in one directly. Wars help America enforce its superiority through product innovation and marketing. With might, force, and fortune, it has the confidence and belief to pick a fight with any nation around the world and not lose. At least, that's the dogma we have been led to believe.
This template for America’s narrative hasn’t changed in decades. The above headline is history repeating itself time and time again.
I realize that I am taking an extremely serious matter and trivializing it. But this essay isn’t about war or geopolitics. It’s about innovation and marketing and how corporations can do them with more rigor and intent.
Skunk Works
More than 80 years ago, there was a similar headline in the news. The US government awarded Lockheed a contract.
Except that there was no headline in the news or a contract.
In the spring of 1943 during World War II, the U.S. government started to feel the threat of the Germans developing an advanced jet. The U.S. Army met with Lockheed Aircraft Corporation (now Lockheed Martin) to express “its dire need for a jet fighter to counter” the Germans.
The management at Lockheed nominated young Clarence “Kelly” Johnson to lead the initiative to develop a new fighter to prepare for the imminent attack. The only requirement, the management told Johnson, was the government asked the new fighter to be delivered within five months. In Corporate America, building anything in five months is a tall order. I’ve worked on a website project that took over two years to design and build.
Kelly agreed but had several demands to the management at Lockheed.
For one, he wanted complete control of his program. Two, he wanted to eliminate the layers between him and the management by reporting directly to the division president so that the approval was singular. In addition, he requested that his team be co-located and given their own lab space, which one of the engineers jokingly called Skunk Works as it had a bad odor from the adjacent tire factory. Kelly’s aim was to streamline work and operate with unparalleled efficiency. However unconventional his approach may have been at Lockheed, the management agreed to Kelly’s demands.
The contract didn’t arrive until four months into the project.
This way of working challenged the bureaucratic system that stifled innovation and hindered progress at Lockheed. Kelly documented his philosophy in what would later become known as Kelly’s 14 Rules & Practices of Skunk Works at Lockheed Martin.
In a mere 143 days, seven days fewer than the requested deadline, Kelly Johnson and his hand-picked team designed and built a jet fighter and called it the XP-80 Shooting Star by the fall of 1943. It was the first jet to exceed 500 mph/805 km/h.
Ironically, though, the Shooting Star never saw actual combat during World War II. In addition to the production delays, another initiative beat the Shooting Star to the punch. It was called the Manhattan Project, the deadliest product innovation initiative mankind had ever seen. Since then, the US has had the world under its thumb, making this project and the following military operations around the world—I might say—the most effective and costly innovation and marketing effort for any sovereign state. As a Japanese native, I have many feelings but let’s not get into them in this post.
The Skunk Works methodology sounds good on paper. However, this is difficult to execute for most hired CEOs of legacy corporations.
It’s no accident that some of today’s most valuable companies, such as Meta, Tesla, or Nvidia, are run by founders and superstar CEOs. They have more allowance to make drastic changes to their organizations. Those changes are not all successful, of course, but can be often radical, extreme, and aggressive. Most hired CEOs don’t have that license.
But when they do take the leap and execute the Skunk Works methodology, whether intentionally or not, with enough conviction, it can have an unexpected positive impact on the legacy organization.
ASICS, which I wrote about in my last essay, is such a case.
Losing the narrative
In the five years from 2015 to 2020, ASICS’s revenue shrunk from $3.7 billion to $3.1 billion. In addition, at the 2021 Hakone Ekiden Race, the most visible and prestigious long-distance running race in Japan, among the 250 participants, no runner wore ASICS shoes.
It didn’t used to be this way.
In 1964, Kokichi Tsuburaya won Japan’s first medal in the marathon event at the Olympics wearing ASICS shoes.
Tokyo 1964 may have been the single biggest milestone for Japan post-World War II. Winning a medal on an international stage made Japan more euphoric than anyone anticipated, including Tsuburaya himself. He became such a household name after the medal win that in 1968, months before the next Olympics, the pressure on him to win another medal weighed too much to bear and pushed Tsuburaya to commit suicide.
For over 40 years since the first Tokyo Games, ASICS shoes have been omnipresent in the marathon race at the Olympics, producing multiple gold medal winners over the years. Between 1964 and 2008, out of the possible 57 medals in the marathon, 20 were won by runners wearing ASICS, more than one in every three winners.
Things started to look a lot less shiny in 2012 in London. Both at the London and Rio Games, no medal winner wore ASICS. The decline of ASICS had in fact started prior to 2015’s start of the brand’s decline.
It was in 2019 when I started working with Mr. Yasuhito Hirota, then the COO of ASICS. The business was in a downward spiral at that point.
ASICS had lost its narrative.
The natural reaction when an organization needs to course-correct its narrative, marketing is an easy thing to fall back on. As we quickly realized, that didn’t seem like it would do the trick. Symptoms were present and deep in various organs of the organization.
The narrative of an organization depends on much more than just marketing, especially in the post-COVID era.
In one of the workshops we organized and facilitated at ASICS, I shared the earlier story about Lockheed and how it developed the Shooting Star by way of organizational design. It’s a romantic story and a good case study to share with business leaders.
At the same time, however, it’s a classic, said-easier-than-done case. Forming a special unit within an organization can cause unhealthy envy among the unchosen employees. I knew this from my firsthand experience. I also knew that when such formation produces results, it can provide much-needed inspiration for an ailing organization.
By the winter of 2019, when the Olympic Games in Tokyo was less than a year away, Mr. Hirota and his team had a come-to-Jesus moment: Not only had ASICS not managed to support any runner to win a medal in a marathon at the Olympics since 2012, the company didn’t think it was ready for the upcoming Tokyo 2020 either. They didn’t have a product that they thought could help runners win in the marathon. It was clear they needed to take some unusual measures.
Mr. Hirota ordered what is equivalent to Skunk Works at ASICS.
He formed a SWAT team of young talent across different functions at the company and had them report to him directly to eliminate the multiple decision layers. In addition, he asked the team to have a real-time feedback loop with the world’s top runners ASICS still had relationships with and get their input as often as possible.
This approach also led one of the senior scientists at ASICS’s Institute of Sports Science to find a simple and insightful formula: runner’s speed = stride (length of a runner’s step) x cadence (number of steps per minute).
In the course of a marathon, an elite runner would take about 25,000 steps. If the shoes could help the runner gain 5mm (0.2in) per stride over 42.195km (26.2 mi), that would mean 125m (410 ft) at the finish line, enough to make the difference between a medal and no medal.
They then concluded that the approach wasn’t to make one perfect shoe that would suit any runner. Instead, they decided to develop two different shoes: MetaSpeed Sky for what they called “stride runners” and the other, MetaSpeed Edge for “cadence runners.”
This eventually helped ASICS regain the trust and confidence of not all but some elite runners. At the Tokyo Marathon in March of 2024, ASICS managed to secure one medal out of the possible six, between men’s and women’s races. The other five were split between Nike and Adidas. It’s not the dominance or the number one spot ASICS is aiming for. Far from it to be honest. But considering there was not even one runner wearing ASICS shoes at another prominent running event in 2021, this is a commendable step forward in less than 3 years.
The role of design
Thanks to the one-year delay in the timing of Tokyo 2020, ASICS was able to announce two marquee running shoes just two months ahead of Aug 2021. These products became one of the key drivers to turn ASICS’ business around in late 2021 and helped ASICS reach its highest revenue in its corporate history in 2023.
However, MetaSpeed Sky and Edge are not dominating the market like Nike did with the meteoric success of its ZoomX Vaporfly released in 2017.
The missed opportunity lies in how ASICS positioned and presented its products.
While the idea of “the ‘stride vs cadence’ runner is fascinating biomechanically,” says Chris Stepanek, a product designer turned YouTube content creator specializing in running, and an old colleague of mine, “it's a nearly impossible story to tell a consumer without a lot of hand-holding.”
The official press release photo, as seen here, from February of this year doesn’t help: It showcases MetaSpeed Sky and MetaSpeed Edge, supposedly two distinct models, and they look almost identical.
Before having worked with ASICS, I worked with Nike for more than a decade and specifically, on Nike Running for multiple years. While I’m not an expert runner, I probably have slightly better-than-average knowledge about running and running shoes. The cleverness of MetaSpeed Sky and MetaSpeed Edge is that they solve subtle but detectable tendencies of runners in meaningful ways.
After having watched detailed product presentations from ASICS as well as several user videos on these products, I still have trouble remembering which version of MetaSpeed is for which. I also can’t figure out why ASICS chose to make the two models—again, aimed at two distinct types of runners—have exactly the same look.
Let’s say it’s intentional. At a major sporting event, shoemakers may provide different shoes to different athletes but in the same, vivid colorways to make them visible and recognizable on screen. It’s a visual merchandising tactic that Nike has been leveraging for almost 40 years at the Olympics, the World Cup, and other major events. In the case of these ASICS running products, it could have been just some small visual cues to differentiate the two and make the innovation more visible without sacrificing the recognizability on screen.
Not only is this “a classic product marketing problem” as Chris says, it’s also a design miss. It’s one skill to solve a problem. It’s another skill to frame and present an innovative solution in a way people can understand with little effort.
Marketing can’t do its job well without a meaningful product. Product innovation isn’t meaningful if it doesn’t get understood and adapted. An organization needs both to build its narrative and create value.
But even before that, what brands and organizations need to understand and interrogate is the weight of their own bureaucracy.
That may be the hardest weight to shed.
Thanks for reading. This one also took a while to write. Thanks for your patience.
Please hit reply with any feedback, thoughts, or questions. I’d love to hear from you.