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Timberland Invention Factory.

Article Excerpt
Doug Clark, vice president, Timberland Invention Factory, discussed Timberland's approach to innovation at the 2004 HRPS Corporate Sponsor Forum. How the company got to the creation of an "invention factory" turns out to be the middle of the story. The end is how the company sustains innovation. Both are covered in this article, but first, some background

In 2005, Timberland, which is headquartered in Stratham, New Hampshire, earned $165 million on revenue of $1.6 billion. About 40 percent of its revenue comes from outside the United States. The company is primarily known for manufacturing and selling footwear, which accounts for about 75 percent of sales. Production is largely outsourced outside the United States. Over time, its product offerings have expanded into apparel and a complete range of accessories, including packs & travel gear, watches, eyewear, headwear, belts, and leather goods. The success of the original waterproof Timberland hiking boot in 1973 led the company to change its name from the Abington Shoe Company to Timberland in 1978. Nathan Swartz, Timberland's founder, bought full interest in Abington in 1955, and the Swartz family, including current CEO Jeffrey Swartz, controls 70 percent of Timberland's voting shares. The company went public in 1987.

Innovation is an integral part of Timberland's history. Thirty years ago, there was a conspicuous void in the outdoor footwear market. Most workboots were designed for use in the outdoors, and made of leather for durability, but making them truly waterproof was a challenge. In a footwear industry first, Timberland tackled the problem by utilizing injection molding technology to fuse rubber lug outsoles to waterproof leather uppers that were impregnated with silicon for complete waterproof protection. The result was a guaranteed waterproof leather workboot. These "yellow" boots became a hit, not only with outdoor enthusiasts, but also with college students both in the United States and overseas.

But Timberland learned what all consumer products companies learn: New ideas have a life cycle, an S-curve of growth and leveling off. Two things are needed to sustain category leadership: first-to-market differentiation and "jumping the curve." Invention is essential to starting a new business or introducing a new...

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