The brand power of risk and pizza
“Organizations that shy away from creative risks may find themselves falling behind”
To state the obvious, risk is…well...risky. Businesses don’t like risk because they tend to assume the worst possible outcome, and in fairness, it has served them well. However, risk exists on a spectrum. There’s good risk, and there’s bad risk, they key is to know how to distinguish between the two and how to avoid bad risk.
Risk can be good, but it is also fickle. Knowing good vs. bad risk is an art, but one that is (perhaps) a little easier than you might think.
A key avenue to foster innovation is through the cultivation of a culture that encourages and supports creative risks. While the term "risk" might sound daunting, businesses that willingly venture into uncharted territories often reap substantial rewards.
Creative risks inherently push businesses out of their comfort zones, prompting employees to think outside the box. This fosters a culture of innovation, where individuals are encouraged to experiment, explore new ideas, and challenge existing norms. The ability to adapt and respond swiftly to changing market conditions is crucial in today's dynamic business environment, and creative risks serve as a catalyst for cultivating organizational agility.
Innovation driven by creative risks can set businesses apart from their competitors. When companies take calculated creative risks, they introduce novel products, services, or business models that capture the attention of customers. This differentiation not only attracts new clients but also retains existing ones by demonstrating a commitment to staying ahead of the curve.
A workplace that encourages creative risks empowers employees to feel a sense of ownership and agency in their roles. When individuals are given the freedom to explore new ideas without fear of retribution, it fosters a positive work environment. This, in turn, boosts employee morale, satisfaction, and engagement, creating a more productive and innovative workforce.
Creative risks involve a degree of uncertainty, and with uncertainty comes the opportunity for learning. Businesses that encourage taking risks foster a culture of continuous learning and adaptation. Even if a creative endeavor does not pan out as expected, the insights gained from the experience can be invaluable, contributing to the organization's overall knowledge base.
Taking creative risks often involves a deep understanding of customer needs and preferences. By actively seeking out and responding to customer feedback, businesses can tailor their innovative efforts to align with market demands. This customer-centric approach not only increases the likelihood of successful outcomes but also builds stronger, more lasting relationships with the target audience.
Organizations that shy away from creative risks may find themselves falling behind. Embracing a culture that values and encourages innovative thinking not only fosters a dynamic work environment but also positions businesses as industry leaders. The benefits of taking creative risks extend beyond immediate financial gains, contributing to long-term sustainability, adaptability, and success in an increasingly competitive global marketplace. Ultimately, the ability to balance calculated risks with strategic innovation is a hallmark of thriving, forward-thinking businesses.
Case Study: Domino’s Pizza - the turnaround
Let’s look at Domino’s pizza. Remember when Domino’s flat out said that its pizza was bad? Talk about risky business!
“Executives watch focus groups berate the product — “the sauce tastes like ketchup,” says one — and admit that in the past, their pizza had its failings. “That’s hard to watch,” says one Dominos exec with a lump in her throat. “When you first hear it, it’s shocking,” says another.”
But this was a turnaround of the company and from this position Domino’s effectively positioned itself to win while simultaneously lowering expectations. When the campaign went live the company’s fourth-quarter profit more than doubled, and since the campaign launched, Domino’s has grown from around $33/share to around $422 in 10 years at a CAGR of 29% per year.
From the launch of campaign, Domino’s Pizza (DPZ) has seen their share price soar at 29% CAGR.
Full-term view of Domino’s Pizza (DPZ) stock price. Rubber really starts to hit the road after Domino’s launches its turnaround campaign.
There is no denying that Domino’s did something right about 10 years ago. They risked their brand’s reputation, operations, franchisees, and value on the fact that it could turn things around by simply stating that their product was bad.
I would imagine that there were many an executive leader inside the organization who could not find themselves onboard with an idea like this.
The agency that worked with Domino’s on their turnaround was Crispin Porter + Bogusky, stylized as CP+B (who had its own turnaround recently). Domino’s started their march to pizza delivery dominance by not only changing their pizza recipe with more fresh ingredients, but it also started innovating the method by which customers could get their pizza.
The company that pioneered the 30-minute or free guarantee in the 70s and 80s, and The Noid in the 90s, was now the company that—again—was risking it all to win customers back. Since embarking on their turnaround, Domino’s has helped cities fill pot holes so that the pizza doesn’t get too jostled while being delivered; a brilliant scheme that not only positions Domino’s as a brand that understands the issues of modern living, but also is able to do some good in the communities that they serve.
Domino’s has unleashed the Chevy Bolt as their updated delivery vehicles running fully electric, another ‘good for you and good for the planet’ initiative. Not only do these vehicles serve multiple purposes of being eye catching advertisements for the product, there are significant savings to be gained for corporations that switch to green delivery.
Earlier in the decade you could immediately reorder your favorite pizza by tweeting a pizza emoji (🍕) to the Dominos handle. This was a handy way for the brand to gain incremental orders that otherwise would have been lost if not for the frictionless method of ordering. Today, Domino’s is trying to “pinpoint” your location so that you can get your pizza delivered right to the park, beach, or rest stop - no addresses required.
Finally, to cap off all the says that Domino’s can deliver pizza to you, welcome Domino’s autonomous delivery robot. In a partnership that is good for both brands, Dominos and Nuro joined forces to deliver pizza based on Nuro’s R2 robot.
