Mattel had gone from struggling to compete to leading the market and back within five years. It was led by a cross-disciplinary team of organizational misfits who had the right skills at the right time and who instinctively knew what and how to succeed by iteratively following their gut feelings about how to manage risk and uncertainty.
They ignored the rules of the game, which at the time saw Mattel simply baiting new concepts to kids in hopes that they’d bite, and ran with one golden assumption: they were ignorant. Acknowledging this took courage and enabled the team to free themselves from the ‘business as usual mindset‘. They then went on to openly figure out what their customers felt and were trying to do at an emotional level. Qualitative insights revealed deep-seated unmet needs and desires for the team to solve with relevant solutions to meet them.
As the concepts and desirability validation matured across problem and solution fit, the team kept an open mind, pivoting their offer to satisfy all stakeholder needs and desires around the product and its value chain as they moved towards product-market fit.
Once market success was found, the team focused solely on solution fit and saturated the market with yet more solutions that didn’t address evolving needs. This got Mattel further and further away from the core needs and problems of the kids they were serving. It also re-ignited traditional business decision-making logic, leading Mattel to pursue further profits above all else.
Ironically, by launching the She-ra Princess of Power action figures for girls (with an animated cartoon series) and simply repeating the same formula, Mattel betrayed the core boys market by also giving ‘the power’ to their sisters! The idea of exclusive power to meet the bigger market latent needs was no longer exclusive to boys and rendered it useless to serving needs and was therefore undesirable.
The second irony was that despite the bounded rational logic to proceeding with business as usual, the true power of Mattel’s innovation capabilities was in the minds of their team of misfits. However, the misfits had been disbanded as it was clear to management that they no longer knew what they were doing.
Instead, Mattel should have rewarded the team for ‘failing‘ (like Amazon does today) and re-assigned them to run the innovation process again, building their validated capabilities further and learning from their mistakes. What could be more valuable than a team that had already failed and learned? They’d discovered exactly how to run and execute the innovation process intuitively! They could autonomously find key insights that could trigger disruptive and radical innovation, and they knew how to frame problems and validate solutions all the way to market success.