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FEATURES

Retailers are squandering their most Potent Weapons

Marshall Fisher, Santiago Gallino, and Serguei Netessine | page 088

As they fight for survival in the era of online shopping, brick-and-mortar retailers are cutting costs by slashing head counts and budgets for training. But that erodes their biggest edge over e-tailers: a live person customers can talk to face-to-face. For every dollar a retailer saves on staffing, it may be losing several dollars in revenues and gross profits if customers leave stores empty-handed because they can’t find a knowledgeable salesperson to help them.

The solution lies in optimizing staffing and training for each store, but most retailers don’t know how to do that. This article offers them a step-by-step approach. It involves analyzing historical data, conducting experiments, and assessing the results, and when applied systematically can add as much as 20% to the revenues of existing stores. Even better, if staffing increases at some stores are offset by cuts at others, and vendors fund product training, those higher sales will cost retailers little or nothing to generate.

HBR Reprint R1901D

FEATURES

Cracking Frontier Markets

Clayton Christensen, Efosa Ojomo, and Karen Dillon  | page 096

With emerging-market giants such as Brazil, Russia, India, and China experiencing slowdowns, investors, entrepreneurs, and multinationals are looking elsewhere. They’ve been eyeing frontier economies such as Nigeria and Pakistan with great interest—and enormous trepidation. Can one find serious growth opportunities amid extreme poverty and a lack of infrastructure and institutions?

The answer, the authors argue, is yes. The key lies in market-creating innovations: products and services that speak to unmet local needs, create local jobs, and scale up quickly. Examples include MicroEnsure, which has made insurance affordable for 56 million people in emerging economies, and Galanz, which has brought microwave ovens to millions of Chinese consumers previously considered too poor

to buy such an appliance.What’s more, the essentials of development can be “pulled in” by market-creating innovators—and over time, governments and financial institutions tend to offer their support.

HBR Reprint R1901F

FEATURES 

WHEN YOUR MOON SHOTS DON’T TAKE OFF

Nathan Furr, Jeffrey H. Dyer, and Kyle Nel | page 108

Many companies looking for breakthroughs struggle to move beyond incremental ideas, because cognitive biases trap people in the status quo and prevent them from seeing big opportunities. But four tactics can help firms overcome biases and think far more creatively:

Science fiction. Sci-fi writers have foreseen all kinds of innovations. When Lowe’s invited some in to envision its future, it got ideas for augmented reality phones, service robots, 3-D printing, and other new technologies that boosted sales.

Analogies. These can help innovators make big leaps too. For instance, when Charlie Merrill applied the analogy of a supermarket to the brokerage business, he changed the industry.

First principles logic. Often it helps to reexamine foundational assumptions and rebuild from the ground up. That’s how Regeneron cut drug development costs 80%.

Exaptation. Why do we use something for one purpose and not another? Asking that question led to the creation of the Flex-Foot, a revolutionary prosthetic that doesn’t look anything like a foot but acts like one.

HBR Reprint R1901H