When you were young, you probably carried a lunch box to school. That lunch box typically held a sandwich, maybe fruit or carrot sticks, something sweet for dessert, and soup or a drink in an insulated bottle. It is very likely that insulated bottle and that lunch box with the cartoon or superhero design were made by Thermos. In 1994, sales of Thermos lunch boxes reached $39 million. But the company, which gave its name to the insulated and vacuum bottles, was losing market share to other companies, most notably Rubbermaid. Dale Benedict, a vice president of the industrial design firm Fitch, summarized the situation:"Thermos used its brand name as a cash cow for years... They allow the brand to become a commodity.”
Thermos was not worried, however. Since 1989, CEO Monte Peterson had worked to turn the company around. When Peterson took command, he had been determined to find new products that would revitalize the company and provide growth. He began with Thermos's other major product line, cookout grills. At the time, there were several competitors in this $l billion/year market, including Sunbeam, Char Broil, and Weber. At the time their products all looked, and performed very similarly; barbeque grills, like lunch boxes, had become a "commodity," purchased on the basis of price rather than unique features. In response, Peterson set up a product development team to come up with a new and distinctive grill.
The team itself was a new concept for Thermos.lts initial members were middle managers from different functional areas, including marketing, engineering, manufacturing, and finance. Peterson described his reasons for setting up a cross-functional team rather than leaving product development to the engineering or marketing department:"Like a politician, you provide a platform for change and then paint a picture of the difference between winning and losing. After that, the old barriers break down, and teamwork becomes infectious."
The team was soon expanded. Among others, designers and market researchers from Fitch lnc. were added. The team referred to itself as the Lifestyle Team. As one member from Fitch said, "We started with no assumptions about grilling. We just wanted to help Thermos push the boundaries of the business." The team's first task was to learn everything it could about cookouts: who did them, when and where, and what their preferences and requirements were. Ten team members traveled around the United States, talking to people and videotaping actual barbecues. They learned that many outdoor chefs were women. They saw that homeowners didn't want rusty or ugly grills on their decks or porches. In Los Angeles, outdoor cooks could no longer use charcoal starter to light their fires, whereas in New Jersey, gas grills couldn't be used on apartment or condo balconies because of the threat of fire. These findings gave the team much to consider.
After several days of discussion, the team had developed several key ideas about the new product. They agreed that it had to be as attractive as a handsome piece of furniture, and, at the same time, it had to cook food that tasted good. It also could not use polluting or dangerous fuels, which made the first design decision easy: It had to be electric.
The group made an attractive model from plastic foam as well as a working, but unattractive model. Building two separate models cost one-sixth as much and took six months less time than building the traditional working prototype. Retailers and consumers then looked at each of the models, and provided feedback. This design task was primarily the responsibility of the marketing members of the team. Meanwhile, the engineering team members were working hard to improve the cooking feature of electric grills, which consumers traditionally had not liked. The engineers used Thermos's vacuum technology, which kept liquids either hot or cold in Thermos bottles, to make a vacuum top for the grill to hold in heat. The Fitch representatives worked on making the grill distinctive, both in design and features. Manufacturing's team representatives kept an eye on how difficult it would be to make the new design and technology.
The new ideas were tested again with consumers and retailers in early 1992. Respondents recommended that hooks for utensils be moved from the front to the side, and that the side table be made large enough to hold hot platters. Other aspects of the new grill were also discussed and modified. Manufacturing was concerned about the tapered design of the legs, which would be much more difficult to make. According to team member Frederick Mather, the company’s director of Research and Development, "lf that mistake hadn't been caught, we would have lost three to four months doing rework on the design."
By early summer, the first batch of new grills had been manufactured on the assembly line and was given to employees to test. As R&D's Mather explained. "I’d rather our people tell us the product has flaws than the customers at Target." The side shelf, which broke under heavy use, was redesigned, using a new material that was developed for Thermos by DSM Engineering Plastic and Mid America Plastics, a molding company. The companies developed a product that looked like granite and would not be hurt by temperatures ranging from 300o fahrenheit during cooking to -20o outdoors during winter.
Members of the Lifestyle Team then took the product on the road. They demonstrated it at trade conventions, including the National Hardware Show, and cooked for the heads of major retail chains. The grill was a major factor in Thermos's 13 percent increase in sales in 1993, and the company felt that electric grills could grow from 2 percent to 20 percent of the barbeque market.lt also won four design awards, including one from the Industrial Designers Society of America and one from Appliance Manufacturing's Excellence in Design competition. The team was also considered to be a success, and similar teams were formed throughout the company. New products that resulted included improved models of the traditional gas grill, which would cook faster and cleaner and also have a radical new design. Another result, based on research with elementary school students, was a redesigned lunch box. The "Super Lunch'R Eco-Logic Reusable Lunch Box System" was made of molded plastic with modular spaces designed to fit a sandwich, a Thermos bottle, and fruit or veggies. This was designed to appeal to children ages 6 to 11; who felt that they were too old for the traditional rectangular box with cartoons. The early sales indicate that the new product will be as big a hit with kids as the grill has been with their parents.
Questions
1. How would you describe the problem (s) faced by Thermos in 1989-1990.
2. Consider the company's process of selecting alternatives and coming to a decision in developing the electric grill. How would you evaluate the strengths and weaknesses of this process?
3. In what specific ways did the problem solving approach at Thermos encourage creativity?