Innovation Accelerating at Country Home Products
Country Home Products, based in Vergennes, Vt. produces the DR and Neuton lines of outdoor power equipment as well as Sunward solar hot water systems. Founded in 1985, the company employs approximately 230 people. In addition to its headquarters and factory outlet store in Vergennes, Country Home Products has a product assembly facility in Winooski and a distribution warehouse in Charlotte, Vt. Country Home Products also operates factory stores in Merrimack, N.H. and New Castle, Del.
Country Home Products considers itself “a niche player” in its industry. “We like smaller, highly-specialized categories of products,” said Joe Perrotto, CEO. “In focusing on these, we almost by default have to be more innovative both in creating new categories as well as finding a discrete niche where we can differentiate and sell feature benefits.”
Country Home Products has a longstanding relationship with the Vermont Manufacturing Extension Center (VMEC), having worked with them for over 10 years. Past projects include introducing Lean Manufacturing methods and a Stage Gate product development process Country Home Products first became interested in innovation engineering training during a VMEC “Manufacturer’s Forum” held at Country Home Products in early 2010. VMEC informed Perrotto of the upcoming May 2010 Innovation Engineering Leadership Institute (IEL) event in Burlington, Vt.
“We felt it would fit in well with what we were doing…New product is our growth engine, plain and simple. With Stage Gate we brought in added rigor, but it didn’t help us be more innovative. We wanted to keep the rigor especially for the development cycle, but we needed to have the more entrepreneurial spirit that you have when you follow these [innovation] techniques in the early stages,” said Perrotto.
Country Home Products sent its entire executive team of 10 people to attend the May 2010 IELevent and began implementing some of the Create tools they learned upon their return. That fall, VMEC presented Perrotto with the opportunity to be part of an advanced Innovation Engineering Black Belt training program. “This was an opportunity to cement the ‘click’ and say we don’t want this to be abstract anymore. We want to make it concrete for us,” said Perrotto.
Prior to Perrotto and Julia Gilbert, Vice-President of Sales and Marketing at Country Home Products, initiating their Innovation Engineering Black Belt training, VMEC led a December Innovation Engineering “JumpStart” session with 20 Country Home Product employees to introduce more people within the company to the innovation tools and refresh Perrotto and Gilbert on their use. Realizing the need for employees to be on “a level playing field,” Country Home Products sent a larger team of 31 employees to the second Vermont IEL event in Woodstock in February 2011.
As a result of its investment in Innovation Engineering training thus far, a culture change has started at Country Home Products in terms of new skill development and the ability to accelerate innovation at the front end. Country Home Products has embraced the Innovation Engineering concepts of “fail fast, fail cheap” and identifying early death threats, allowing them to evaluate a greater number of ideas before committing them to their development process. By relying on prototypes, mock-ups and early test markets, Country Home Products is now able to evaluate more ideas up front, including those with which they may have less confidence or pose higher risks, in the prospect of discovering those that are “meaningfully unique.” While in the past, Country Home Products aspired to taking one new product to market per year; their target now is three, which Perrotto expects to “hit” under their new process.
“We can actually succeed more by failing more. Because we can do it fast, we are going to try 24 things and maybe only three work, but if we were only going to try two things before and only one worked, there is still more success even thought there is a lot more failure,” said Perroto.
Innovation Engineering training has also opened Country Home Products to the value of mining (digging deep for new ideas in the areas of technology, future trends, market and customer insights) and widening the pool in which they search for ideas. Perrotto estimates that in the past 80% of ideas for new products came from within the company and 20% from outside. This has begun to change and Perrotto expects it will completely reverse with 80% of new ideas coming from mining of outside sources such as the National Innovation Marketplace, supply chain partners, inventors and even YouTube, and 20% created within the company. Country Home Products has also begun inviting suppliers and sources of these ideas to be part of the discovery process, taking some of the early evaluation work off their own hands.
Perrotto estimates that to date Country Home Products has invested between $175,000 to $200,000, on Innovation Engineering Training and initial projects. Using the Innovation Engineering tools they now employ, Country Home Products projects 10 to 15% of revenue in 2012 to come from new products and 20 to 30% the following year.