Mind the BRIC – how to successfully conduct open innovation projects in BRIC Markets

Delivered at the MRS UK New Product Development Conference, March 9th 2011

Esther Garland, Associate Director, Face and Marilena DʼAmone, CMI Director Emerging Markets, Reckitt Benckiser

Introduction

Many of the largest global businesses are headquartered in the Western world, often with innovation activities centralized and driven directly from these headquarters.

There is a problem with this approach. Itʼs a fairly obvious point to make, but an important one, that the emotional and rational needs, the state of the category, and the level of consumer sophistication differs in each market. And this means Brand Owners canʼt simply take centralised innovations or concepts, “translate” them and expect them to work or perform in the same way as they do in our Western markets.

This is why increasingly these global companies are recognizing the need to adopt a more bespoke innovation strategy.

This is particularly important when it comes to the new “hot” markets such as BRIC that are ever increasing in terms of significance, power and opportunity with the seductive combination of huge populations and rapid growth in consumer spending power.

As brands enter new markets, the need to develop and communicate new products against new consumer needs and innovating with consumers becomes ever more important. And getting innovation right leads to big prizes.

But categorizations like BRIC are themselves misleading, and hide a myriad of important cultural differences. The approach taken to innovation has to be different in each market; itʼs not a one-size fit all approach however the global pie is sliced.

This paper focuses on the differences inherent between these markets based on Faceʼs experience of innovating in developing markets over the last couple of years. It will talk about our experiences gleaned from working in 3 of these BRIC markets specifically – Brazil, India and China, and show the lessons learned about the crucial differences in approach and mentality required to co-create successfully NPD breakthroughs in these markets.

Innovating the Face way

As the co-creation planning agency, Face uses co-creation not only to create new products for our clients, but increasingly insight, communications, brand positioning and brand strategies.

We believe in working with people, not at them; working directly with consumers, clients, agencies and experts in the innovation process as equal and active creative partners, with each party bringing their own specialist expertise to the table.

To work with consumers in this way does require the right type of consumer. We work with people who are creative, articulate, enthusiastic, skilled abstract and conceptual thinkers, but who are ultimately consumers, representative of the category target market demographically and attitudinally and are not professionals (unless of course that is the target audience!)

We work online and offline, with a process that typically encompasses individual, small group, “crowd” level samples and back again. (See figure 1)

Figure 1: Faceʼs Innovation Process

4 cultural differentials impacting innovating in BRIC markets

This paper will talk about the differences in approach and mentality required to run successful co-creative open innovation programs in BRIC markets like Brazil, India and China.

There is obviously a level of generalization required in order to pull out the differences between these markets, and as such it is worth recognizing that not all of the learning and principles will be true in all cases and with all consumers.

However we believe that there are 4 key areas of cultural difference that impact the approach required to run open innovation projects in these BRIC markets:

1. Openness to innovation

2. Natural interaction dynamics

3. Creative processes

4. Working style

1. Openness to innovation

It once again sounds obvious, but for open innovation to work, a market needs to be open to the idea of innovation at a cultural level.

Many of the large global brand owners have been so very successful in innovating in our western markets because as a culture our recent consumerist history has lead us to believe mostly that new is better; that there is always a bigger, better deal out there.

That is not always the case.

Our experience has shown us that Brazil is similar to our Western countries when it comes to openness to innovation, but that it can be more challenging in China.

There are three main traits that lead to a less “innovation open” Chinese environment.

Firstly we have found it to be difficult for Chinese consumers to challenge the status quo; their communist social history, and Long Term Orientation1 conditions them to accept willingly what they are offered as the best option available. Making things better is simply counterintuitive to many.

Secondly we have found that Chinese Consumers can tend to have a more linear and rigid thought pattern; the Chinese consumer tends to think about one thing at a time, and once they get into a particular thought pattern or direction it can be hard to shift them out of it.

And finally as a product of an education system that emphasizes rote memorization over creativity, knowledge over ability, we have found they also have a natural tendency to imitate or copy over innovating – copying both what is already out there on the market, and what others in their group might come up with.

As a result when working in China the natural scale of innovation is often quite polarized; the Chinese consumerʼs “creative range” is not very developed. Typically what comes easiest are either small, simple and very incremental innovations or something completely tangential (i.e. science fiction or completely out of category or scope). It can be challenging to get the Chinese consumer to think anywhere in the middle.

Implications

These points are really most relevant when thinking about the stimulus you use as part of the creative process, as this can be used both to help stimulate creativity and bridge the gap in the innovation scale.

Stimulus in China needs to be more abstract and left field in order to give the Chinese consumer permission to think differently, to knock them off track and get them challenging the status quo. We have found that using tools such as cross category and cross culture ideas and experts, random objects textures and images, counter-intuitive and unrelated words, and imaginary scenarios (often generated from global trends or the “state of play” in other markets) can be very effective in helping the Chinese consumer make the required creative leaps.

By way of comparison, in Brazil, where consumers have a naturally more conceptual and dynamic thought model, we have found that stimulus needs to be used more to direct and set the parameters for them to create within. We have found that here it is a case of increasing, rather than decreasing the relevance for example using more adjacent categories, relevant words to avoid generating ideas that are hard to tie down into a workable idea. Brazilians, as a highly stylistic culture have a natural tendency to focus on creating abstractly new and exciting concepts in co-creation, rather than things that actually directly solve an unmet need or desire.

2. Natural interaction dynamics

The importance of group dynamics when conducting research is well documented, but once you throw the need to create together into the mix as in co-creation, creating the right group dynamics becomes of critical importance.

There are some crucial differences in how people in each market approach both the idea and experience of co-creation that drive the need to flex project design and approach.

Brazil is by nature a collective and highly social culture and this means working in teams, even with strangers, is in no way daunting or uncomfortable. Opportunities like taking part in research are often in fact seen as an opportunity to meet new people and learn new things. Groups will naturally adopt an equal and inclusive communication pattern, regardless of status or role.

Chinese social culture by comparison is quite formal, reserved, respectful of status and role, and research can often be seen as “business”. As such we have found that consumers donʼt naturally and spontaneously interact with one another in these open innovation sessions, instead preferring to focus the majority of their communications on the moderator.

Furthermore there are important differences in how people naturally relate to each other when they do talk in these cultures.

In China, stimulating debate is hard; opinions are kept to themselves unless explicitly asked for on an individual basis; maintaining harmony and balance is the prevailing norm.

In Brazil, the intellectual cut and thrust that allows ideas to develop and grow happens naturally; argument and debate is the standard mode of social communication and interruption is viewed as enthusiasm!

Implications

This means in China the workshop agenda and exercises have to be designed to structure a group building process necessary for open innovation.

We have found that including a mix of individual and group exercises all the way throughout the sessions helps with this as it both forces the Chinese consumer to challenge thinking and gives them permission to do so without losing face or disrupting group harmony.

The more reserved and status aware, natural interaction dynamic in China also requires that when working face to face with consumers in the way Face often work, in a number of small co-creative teams, each team needs “internally facilitating” to help foster and normalize that dialogue and group dynamic.

This has obvious implications in terms of the resource required to drive the program forwards both from an agency and client perspective. Itʼs crucial from a client team not only to have people who are personable and able to suspend being a “client” and engage on an equal level, as in all co-creation, but people who are also capable of using their clients skills in a consumer friendly way.

However even though we have mentioned the fundamentally Chinese issues around individuality and their place in groups and society, it is worth making clear that we experienced none of the issues around working directly with clients in China that one may have anticipated.

We believe that this is due to the type of consumer that Face typically involve in their co-creation programs. For these creative, articulate, forward thinking consumers, the respect for status manifests itself in more sensitive way than providing a handicap to the process.

Figure 2: Natural interaction dynamics

The above learning around natural interaction dynamics in both cultures also teach us something about the best way to interact with these cultures in open innovation.

In Brazil the best stuff comes from working face to face. Brazilians are of course a culture that share and interact by their very nature; a culture where touch and body language are as important facets of communication as words. Online tends to lack the emotion or engagement characteristic of their culture; itʼs effectively asking a Brazilian to communicate with their hands behind their back!

In China on the other hand online is the perfect medium. Where Chinese consumers are colder, more reserved, more closed off to the facilitator and each other face to

face, the exact opposite is true online. The anonymity affords permission for the Chinese consumer to express themselves more openly without the fears of “losing face” or being judged. Through working with Chinese consumers on our Mindbubble platform, we have found you can get fantastic, emotional stories, verbal imagery and language, and a real honesty and interaction between participants that is incredibly insightful and helpful in building concepts and innovations.

3. Creative Processes

The outputs required in innovation are typically the same wherever in the world you are doing it, but in order to get there clients and agencies need to recognize the difference in how consumers think and tailor their approaches accordingly. This is perhaps the biggest area of significance when it comes to thinking about how to approach open innovation in these markets, and areas where some of the biggest differences exist within consumers in BRIC (Figure 3).

Chinese consumers have a tendency to be very rational and literal, and Mianzi (saving face related to personal prestige) is still a strong cultural influence. We have found that the Chinese consumer tends to be extremely diligent and fearful of misinterpreting instructions or not being able to do the task required of them.

By comparison the Brazilianʼs natural start point is more emotional and abstract; their natural thought process more dynamic and fragmented. However they are still goal orientated and have a low tolerance of uncertainty.

In India there is less of a focus on logic at all; the Indian consumer is much more open to unstructured ideas and situations than either Brazil or China. Additionally the Indian consumer tends to be much more task orientated, with the enjoyment of a process derived as much from the inherent tasks as the achievement of the end goal.

Implications

The above findings have significant implications on how agencies need to structure projects and agendas in each market.

In order to run a successful co-creation in China, agencies need to design very clear, concrete, discrete tasks, and help the Chinese consumer build up to the final output logically and sequentially. Project and workshop design needs to take them on a journey, step by step. Additionally agencies need to design the agenda and exercises such that they allow the Chinese consumer to be literal and functional first, and then add on the emotional to those building blocks.

In Brazil by comparison, agencies need to use techniques and tools to allow consumers to build in the rational and tangible; to ground the emotional and abstract in real needs and benefits.

In India an agenda comprised of discrete but seemingly unrelated sections can work well as not only does it play better into how they naturally think, but it helps keep the more task orientated Indian consumer engaged.

Figure 3: Creative processes

We have found that using a series of templates that build up to a final output works well in China. It not only provides a framework that allows the consumer to feel completely safe to create within, but it also provides a tangible output and roadmap for them which removes anxiety around performance and achievement.

Perhaps counter-intuitively, we have found templates can work well in Brazil, as they force the naturally abstract and conceptual Brazilian to structure their thinking and build in the logic. However it is key to position them as a way to capture the overall idea at the end of the process rather than a framework for telling the story used throughout (Figure 4).

Figure 4: Templates help structure thinking

The outlined differences in creative process and nature also contain some learning for the final outputs from co-creation, be that NPD or brand.

In China when it comes to developing and writing concepts rational, functional substantiation is key for the Chinese consumer – very emotionally focused or expressed concepts struggle with believability.

However, in Brazil often the rational substantiation is less necessary. Brazil is a very high context culture2, meaning a strong emphasis is placed on the overall presentation rather than on the words used alone. As a result, for many Brazilians, the eloquence with which you present your position becomes a part of the message. So, often, as long as it is interesting, emotive and inspiring it will be received with warmth.

4. Working style

The final section of our paper deals with the different approaches to task completion in the different markets.

A workshop should always be fun and creative (in our opinion, whatever the market or brief) but itʼs worth stating here that the more rational and literal mental style and approach of the Chinese consumer does not mean that agencies should run equally rational and literal sessions. The Chinese consumer can be highly creative, with conditions created to help them get to where you need them be.

But even with the most playful and dynamic workshop in the world, differences in approach to task completion will have knock on effects for facilitation style.

Chinese culture places a strong focus on achievement and success, and consumers are task committed with a strong sense of personal responsibility to the group. However their fear of losing face, means that unclear instructions or expectations related to a task will not be challenged or questioned by a Chinese consumer, and this will create anxiety and discomfort that can hinder the process more than it would in other cultures.

Brazilian consumers will attack each and every exercise with passion and gusto for as long as it is fun and stimulating. Brazilians naturally talk and think quickly and dynamically, meaning that boredom has a tendency to be quick to come by and will not to be tolerated well. Interestingly, and perhaps in contrast to Geert Hofstedeʼs findings around the Brazilianʼs low tolerance for uncertainty, we have found that the Brazilian consumer also appears to like the ambiguity of how to reach an end goal as it allows them to be more creative and more naturally suits how they think.

In India however we have found itʼs harder to keep consumers focused on the task, both in terms of time and depth of thought and interrogation, before descending into the natural social chatter that is characteristic of Indian culture.

Implications

These differences in working style mean that Facilitators have to adopt different roles and styles in the different markets.

In China, the role of the Facilitator is to direct and support the consumers clearly through each stage of the task not only to ensure the objectives are achieved, but also to ensure the Chinese consumer feels comfortable and empowered to be creative.

In Brazil the role of the Facilitator is to set the overall goal of the task but then step out and let the Brazilian consumer get there however they see fit – negotiating the journey seems to be half the fun (as evidenced by the very Brazilian Jieto)!

When working in India we have found that the role and approach of the Facilitator should be more akin to a coach or school mistress; keeping the Indian consumers focused, encouraging them to probe and push further as they may not naturally go there themselves.

Conclusions

The speed with which you can negotiate co-creative innovation programs in the markets differs, as does the amount of planning, and resource required (particularly when working face to face). As such agency and client teams need to be realistic both about how long a co-creation project will take to yield, but how much time and energy they will have to commit to the process itself.

Conducting open innovation programs take significantly longer in China, or India than in Brazil.

In Brazil they think and talk fast and groups need less internal facilitation, however the more structured and logical path you need to go through in China means that things just take longer. While in India itʼs a case of a slower pace of thought and life overall, and it is harder to keep them focused – and of course the numerous food breaks!

It is undoubtedly tougher in China and India than in Brazil as you do need to plan more carefully and devote resource. But instilling that diligence in planning and, particularly in China, utilizing online methodologies can bring huge rewards both emotionally and physically.

Co-creating in developing markets is definitely possible, despite their developing status, and with the right approach, the rewards for any agency or Brand owner can be significant.

References:

Edward T. Hall, Beyond Culture, 1976

Geert Hoffstede Cultural Dimensions www.geerthoffstede.com