Some Decisions are Forever

by Steve McKee

Earlier this year I commented on a decision by Panasonic to rein in R&D investment in flat-panel televisions and instead expand its reach into the entry-level market (see "Is Panasonic Kissing Its Future Goodbye?").

The company appeared to be eyeing significant market share opportunities offered up by the 2009 conversion to digital TV in the U.S. It was a bold move, because while it's easy to cash in your brand equity and go down-market, once the decision is made it's nearly impossible to reverse course.

Last month another famous brand made that fateful choice. Liz Claiborne, Inc. agreed to license its namesake brand exclusively to J.C. Penney, ending decades-long relationships with department stores like Macy's, Dillard's and Bon-Ton. The Claiborne brand has long been in decline, and a Macy's spokesperson said the retailer could no longer justify expanding the line because of customer confusion between it and the "Liz & Co." sub-brand that was being sold exclusively at - you guessed it - J.C. Penney.

The Claiborne brain trust may have created their own problem by overextending the brand, a common manifestation of the loss of focus that afflicts many stalled companies. That said, this new decision may work out. It's not the first time J.C. Penney has partnered with respected, high-profile designers (Polo Ralph Lauren and Nicole Miller, to name two), and Penney is doing better than many of its rivals in this tough economy.

As with Panasonic's decision, however, this one will be interesting to watch, and will serve as yet another object lesson for any company struggling with stalled growth. Going downscale - where all the value-conscious buyers are these days--can be extremely tempting. But if you do it, make sure you're extremely comfortable with your decision. There's no turning back.

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Steve McKee is a BusinessWeek.com columnist, marketing consultant, and author of "When Growth Stalls: How it Happens, Why You're Stuck, and What To Do About It." Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

Part 1 - The Power of the Question (Shanghai)

Lots of bad stuff happening in China right now. So let's talk about some good stuff. Like the design coming out of Shanghai.

Innovation, no matter where it occurs, always begins with a burning question (or questions), centered around "Is there a better way?" Artist-turned-designer Lu Kun has almost single-handedly put Shanghai on the international fashion map by pursuing three such questions:

Why doesn't China's clothing industry pay attention to detail? Why is it so cheap and uninspired? Why can't we do it differently?

Tired of his country being perceived as one big factory, Kun is on a mission to demonstrate that creativity and innovation are alive and well in China. His bold designs are doing just that. Drawing his inspiration from what he knows best - the streets of Shanghai - Kun's original creations are being hailed as elegant and imaginative, yet at the same time distinctly Shanghainese.

Undaunted by China's lack of a financial backing system for developing promising fashion designers, Kun has broken new ground. Until the arrival of Mr. Lu, no Chinese designer had achieved a presence on the international catwalk.

Kun did it in less than five years. How?

It's as if Mr. Lu took the advice of Sakichi Toyoda, who said: "Never try to design something without first gaining at least three years hands-on experience."


Kun's six-step path to innovation:

1. Learning the basics of fashion design in a vocational high school.


2. One year of cutting and sewing at a Shanghai tailor shop.


3. One year at a startup Hong Kong label.


4. One year teaching sewing technique and production design at LaSalle International Fashion School in Shanghai.


5. Then out on his own as a personal fashion designer for wealthy individuals.


6. And finally the design of an entire line of special occasion and upscale casual wear.

As with all great innovators, it's the power of the question that drives Kun's artistry.

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Matthew E. May is the author of "IN PURSUIT OF ELEGANCE: Why the Best Ideas Have Something Missing." He is constantly searching for creative ideas and innovative solutions that are 'elegant' - a unique and elusive combination of unusual simplicity and surprising power.