Innovation’s Game; or, Do it or Don’t

“Every man is said to have his peculiar ambition. Whether it be true or not, I can say for one that I have no other so great as that of being truly esteemed of my fellow men, by rendering myself worthy of their esteem. How far I shall succeed in gratifying this ambition, is yet to be developed.” - Abraham Lincoln in first political announcement, age 23. He came in 8th. “I grew up quick and I grew up mean. My fists got hard and my wits got keen” - A Boy Named Sue, Shel Silverstein, Johnny Cash “Do it or don’t.” - Marlo Stanfield, The Wire

In the HBO series The Wire, there’s a rising, psychopathic drug dealer named Marlo Stanfield. In his first scene two men struggling with addiction crash a shopping cart into the prize car of one of Marlo’s henchmen. The henchman pulls a gun and threatens to kill them. Marlo, calm and cold, says, “do it or don’t.” That is, kill them or don’t, but don’t make me late.

There is a simplicity of purpose to Marlo’s mind. With his madness, he takes control of the Baltimore drug trade. He’s a monster, but I’ve always loved that simplicity of purpose–do it or don’t.

Stay with me a moment.

Innovation is dreaming, realizing, and implementing new ideas. Large corporations that dominate the consumer goods market do not value innovation. They are organizationally, creatively, culturally, and financially obtuse to innovation. They don’t have the values or pluck. They don’t put their dollars toward innovation. I speak from experience in the wellness industry, but the rot is broad in consumer goods. The reason is simple–big companies do not innovate because they do not try.

I’ll show you the receipts to back my claim.

Big multinational corporations are bad at innovation for many reasons. I’ll highlight only three.

Big companies are beholden to tradition. This is reasonable. Tradition has piled billions and still yields shareholder profit. Why rock the boat? Moreover, we measure profit quarterly. In consumer goods, if you quantify success or failure every ninety days you won’t try to innovate beyond plastic. Government funded basic research has yielded many promising candidates to replace plastic–all the function with none of the human-ecological harm. But at the end of ninety days, any effort to replace plastic will only be a sizable loss. The worst plastic offenders–Coca-Cola, Pepsi Co. and Nestle–face the choice to do it (pursue good innovation) or don’t. They choose don’t.

Big companies don’t invest in innovation or much else. According to economist William Lazonick, between 2008 and 2017, companies in the S&P 500 spent 53 percent of their profits on buying their own shares to inflate their stock price. Prior to the Reagan administration this was illegal market manipulation. In the same time period, big companies gave another 35 percent to shareholders and executives. This means that for every dollar earned, eighty-eight cents went to shareholders.^[1] It did not go to research and development, worker training, pay or benefits. It did not go toward equipment, facilities, partnerships, or process improvements. Eighty-eight cents of every dollar did not go to things that drive innovation! And the coup de grâce–we tie executive compensation to stock price. The goal for executives is one figure–stock price, which they purchase their own stock to inflate. We have chosen a perfect storm of nothing.

Prioritizing stock price over everything else is greatest in–you guessed it!–consumer packaged goods. Don’t expect much from us. We don’t have the heart to try. We and, most unjustly, those who follow will bear our harm.

For a contrast, let’s look at DHB. This is self-serving, but it’s also true. We take a longer timeline to free our minds and passions to innovate. Our shareholder (me) cares about good acts upon earth in this fragile moment of life on earth. And we commune with an indomitable bee. Say the word “don’t” around her. Be prepared to flee. DHB and a wee bee choose do.

And what are the results? Drew’s Honeybees innovated. We innovated with new honey products. We innovated in farm laborer treatment. We innovated in the chemistry of antioxidation–longer lasting natural products. We made a better lip balm tube–a better outcome you can hold.

If you will, ponder a moment that we made a better lip balm tube without any of the advantages of a large multinational corporation. None. We have precisely one thing they don’t–an abiding desire to deliver better products to you and realize the better outcomes of healthier products. We’re fiercer than they are too. Two things, I guess. 🤷

When pursuing innovation, we cared that our innovation was actually better. Notably, Drew’s Honeybees did not sign onto the cardboard tube. The problem with cardboard is that it’s cardboard; the oils in lip balms make cardboard gross. We did the barest of due diligence–we asked what manufacturers treat the tubes with. The way to make the cardboard tubes less messy is to bathe it in per- and polyfluoroalkyl compounds (PFAS). PFAS is a forever chemical, it’s toxic, and it builds in our bodies to no good end. My values don't allow me to choose that for you. I could choose it for me, but I wouldn’t. Aye, that’s the rub.

We failed too. In those heartbreaks, two things kept me hopeful. The first was a bee. She buzzes forth in such vigor, intelligence, and willing sacrifice. My second hope was you. My fondest hope has long been a moment of your time. That we might say, “hey, Ya know what? We oughtta do some good. When future generations look at us, it’ll be our shame if we just dimly dawdled and dithered.”

Without money, relation, contacts, education, expertise, or partners, we innovated because we care to innovate. Let’s say the feared thing. We’re willing to fail. We had the courage to try. That’s a proud thing, methinks.

In a free, efficient competitive market any company that does not innovate–deliver meaningfully better–authors its own irrelevance. Innovation is the wellspring of profit. Pick up ya game, Goliaths. Or don’t…

Imagine for a moment the gritty reality of how a handful of nobodies beats corporate Goliaths with a meaningful innovation. Where does the money come from? Who leads in a material science design? How do they get a moment of peoples’ time? How do they keep hope alive? As gritty as you may imagine I bet the reality was far harder, more vulnerable, more maddeningly perplexing, and less hopeful. By grace, we are here. Our fists are hard and our wits are keen.

We did what Clorox (Burt’s Bees) and all else didn’t do because we went after it with our whole soul. We now invite them to join us in broadening a good thing.

[1] Lazonick, W. (2015, April). Stock buybacks: From retain-and-reinvest to downsize-and-distribute. Brookings Institution. https://www.brookings.edu/articles/stock-buybacks-from-retain-and-reinvest-to-downsize-and-distribute/