Case
Teaching Notes
Abstract
Halen Môn is a family business in Anglesey, North Wales that began life in a saucepan of seawater on the Aga in the family kitchen. Today Halen Môn supplies Marks and Spencer, Waitrose and Harvey Nichols in the UK and their salt can also be found in 22 countries and some of the world’s top restaurants. This case study views the development of this small business from the start-up phase to the present day. The resulting analysis illustrates the importance of three key elements of the innovation process: the need to develop an innovative organization; strategic leadership; and the formation of rich networks and strategic partnerships.
Case
This case study examines the innovation process that led to the development of Halen Môn, 1 a successful family business in Anglesey, North Wales, employing 16 people and owned 100% by husband and This case study examines the innovation wife team David and Alison Lea-Wilson. process that led to the development of wife team David and Alison Lea-Wilson. The case uses qualitative data from a presentation entitled ‘Innovation doesn’t cost – it pays’, by David Lea-Wilson, a guest speaker at the Small Business Learning Networks in Ireland and Wales (SLNIW) Conference at Aberystwyth University in 2010, and from an interview with his wife and business partner, Alison Lea-Wilson, about the Halen Môn approach to networking.
The case study is structured as follows. We begin by providing the company’s background, and then give an overview of the innovation approach adopted by Halen Môn. We follow this with an examination of the key aspects of the innovation process by looking at the development of the main innovative idea that David and Alison settled on following a brainstorming session. These key aspects can be categorized under the headings provided by some of the key aspects of Bessant and Tidd’s (2011, 2007) simple model of innovation: the development of an innovative organization (in this particular case, focusing on product innovation, process innovation, innovative marketing and innovative invoicing); strategic leadership; and the formation of proactive linkages (rich networks and strategic partnerships). The final section presents the overall conclusions arising from this study.
Company background and theoretical perspective
David and Alison Lea-Wilson were running a tourist attraction on Anglesey, where they lived. The Aquarium and Sea Zoo employed 26 people and relied on tourists visiting the island. In 2001, at the height of the foot-and-mouth crisis, the UK government restricted movements in rural areas, and David and Alison lost 80% of their turnover overnight. They were reluctant to lay off their employees and looked around for another business idea.
David and Alison decided to use a brainstorming technique to come up with an innovative new product or service. They started off with a list of resources and skills and wrote down their ideas on some cards. These were then shuffled and discussed until they came up with a shortlist, which included an art gallery, a wine shop and sandcastles, which they tried without success. However, David views the process of trial and error as a necessary part of the innovation process, and this is a common finding in the innovation literature (for example, see Rothwell and Gardiner, 1985). Another idea to emerge from the brainstorming sessions was sea salt, and David decided to follow this up by collecting a saucepan of seawater and boiling it on the Aga cooker in the kitchen until the salt crystals appeared. Believing that he had struck ‘culinary gold’, David approached the local university and employed a chemistry student to work on the idea for six months. He knew that the product had to be innovative as salt is a basic product, so they had to have something different from existing competitors:
‘We had to be different. Real innovation that is successful will pay. We tried to put that in a tube of salt.’ (David Lea-Wilson, SLNIW Conference, 16 September 2010)
The Halen Môn approach to innovation
‘Innovation is uncomfortable. Real innovation is awkward to do … you have to leave your comfort zone to be successful.’ (David Lea-Wilson, SLNIW Conference, 16 September 2010)
The approach to innovation at Halen Môn is systematic and includes the following key factors:
- know where you are;
- know where you want to get to;
- resources – examine what resources you have and what resources you need;
- skills – examine what skills you have and what skills you need;
- harness ideas – for example, from your workforce, informal business networks and industry events;
- Google Earth view – look at your organization from above (see the ‘big picture’); and
- look from outside – look at your organization from the outside rather than becoming trapped within existing organizational walls, routines, procedures and ways of thinking.
David believes that anyone can innovate – Halen Môn is now exporting premium sea salt to its 21st country – and ‘it is all because of innovation’. Thus his key advice is that if you innovate and manage innovation effectively and put the mission and aims of the organization first, the results are profits, fun, survival and satisfaction. He also recommends that innovators ‘learn a lot from failure and control the direction of [the] business as much as possible’.
Developing an innovative organization
‘Real innovation that is successful innovation will pay you.’ (David Lea-Wilson, SLNIW Conference, 16 September 2010)
Product innovation
David and Alison knew that they would not be able to compete on price, partly because of the remote geographical location of their business. David spent six months becoming obsessed with researching the production of sea salt. He began by sitting in on chemistry lectures at a local university and soon decided to ‘borrow’ a chemistry student to conduct research for him. He was interested in finding out ‘what would make people think about salt in a different way rather than just a white powder you put on food’ – the salt had to ‘look fantastic, taste fantastic and be visibly different’ to justify the higher selling price (two-and-a-half times the price of the competition, at £4.60 per 250 g):
‘Most people will copy you. Not many people will say, “Let’s do things differently”. Someone will always make it cheaper. We had to make the crystals as big as possible … in a blind taste, our salt comes out on top. We can’t compete on price, we have to be different and better … It got us into places that we would not have got into.’ (David Lea-Wilson, SLNIW Conference, 16 September 2010)
As a result of this philosophy of the need to develop a very high-quality and different product, Halen Môn is currently supplying seven out of the top 50 restaurants in the world, including Heston Blumenthal’s The Fat Duck, as well as local restaurants such as The Bull’s Head in Beaumaris. They also supply to Marks and Spencer and Waitrose.
David emphasizes that ‘innovation is uncomfortable, but you have to leave your comfort zone’ in order to innovate effectively. One example of this from his previous aquarium business is that, at the time of the foot-and-mouth crisis, he travelled to London to lobby the government about its warnings against people visiting the countryside. This had reduced customer numbers by 80% and was destroying his business. David dressed for the part, wearing a bright red lobster costume and, as a result, he was invited to Number 10 Downing Street to discuss matters with the relevant government advisory board. He felt uncomfortable doing this, but states that ‘extreme situations require extreme innovation’, and recalls that, ‘even collecting and cooking the first batch of sea water made me feel stupid’, but this is usually a good sign that innovative thinking is occurring.
David spent a lot of time thinking about the logo and packaging for the final product, but stresses that ‘you cannot sell a poor product no matter how good the packaging is’. The total investment in the first year of operation was £12,000, and half of this was on the tube design and the logo. David and Alison knew from the beginning that they had to strengthen their unique selling point and that the packaging had to be different. Once David had developed a prototype and had designed the logo and the carton, he took it to a food festival in London. After two days he had two orders, one from a delicatessen in London and one from his local butcher on Anglesey, just five miles away (unfortunately, the delicatessen has since gone out of business, but the local butcher still stocks the product).
Following the launch of the product, four different types of salt were then developed by mixing it with different spices. This ‘made the salt go further’, which was important as there were both capital and space limitations in the premises they were operating from at the back of the aquarium. As the new business grew, David and Alison decided to sell the aquarium so that they could focus on Halen Môn on a full-time basis.
Process innovation
At times, however, David is not open to innovation. He recounts an example of process innovation suggested by a consultant whom he ignored for three years. The next time they met, the consultant offered a ‘payment on results’ arrangement for increasing the efficiency of the drying part of the production process. The consultant had the idea of converting domestic spin dryers and putting the salt in bags to speed up this process, and this led to a 70% saving on drying costs. As a result, David was pleased to pay the consultant’s fee, as it meant a considerable long-term cost saving for Halen Môn.
Innovative marketing
David believes that one key aspect of starting a successful business is to ‘ask yourself where the profit is going to come from’. He also thinks that the grant-driven culture in Wales and Ireland can cause new businesses to lose focus on customers as the key drivers of the growth of their businesses:
‘The customer is key … you have to innovate and deliver the value that the customers want.’ (David Lea-Wilson, SLNIW Conference, 16 September 2010)
As a result of this marketing philosophy, David spent a lot of time thinking about and researching ideas that would work for the development of a strong Halen Môn brand and logo that would attract customers. He found that people trusted the colour blue, and this also tied in with his ideas for wanting the product to stand out on the shelf.
In terms of developing and maintaining a strong brand, David says that you have to ‘change ahead of the curve before you have to’ by ‘asking yourself whether you are still doing what you should be doing’, making the product better than your competitors’ products and then letting your customers know this:
‘Once the product is better we actually let the customer know it is better – you have got to let the customers know, however you do that. We did it through PR. Almost everything about our business is innovatory.’ (David Lea-Wilson, SLNIW Conference, 16 September 2010)
For example, once the product was beginning to become a recognized brand, David decided to ask his customers for their feedback on the design of the sea salt tube package. Ninety-five per cent answered that it was fine, and that ‘felt too comfortable’ for David. As a result, the focus for Halen Môn at this time became one of ‘staying ahead by setting the next trend’ and strengthening its unique selling points. David and Alison employed a marketing agency called ‘Mad Hen’ with the remit of ‘refreshing the company’s brand, its visual language, packaging website and, in the long term, transforming Halen Môn into an iconic brand, doubling the profit and turnover’ (Mad Hen, 2011):
‘Since launching the new brand, Halen Môn has seen a huge increase in enquiries, received overwhelmingly positive feedback from those familiar with the “old” brand and successfully taken a big step towards becoming an official supplier to the Olympics 2012. The future looks very positive and we’re well on course to deliver the business objectives.’ (Mad Hen, 2011)
Halen Môn also talks to its customers all the time in order to strengthen the brand and customer relationships. For example, in 2010 the company wrote to its most famous customers to ask for feedback and testimonials about the product, and all but two replied. Halen Môn then prepared a booklet with their comments, which it sent out to all its customers so that in effect ‘our customers are doing all our selling for us’. For example:
‘Halen Môn is a store cupboard essential both in its natural state and its flavoured variants – quails’ eggs would weep without the celery salt. Having visited the production site, it was super to see the care and attention put into the transformation of the salt water into the sparkling crystal gems that should be treasured on every kitchen table.’ (Sam Rosen-Nash, Grocery Buyer, Fortnum & Mason, London)
Strategic leadership
By involving their existing staff in the initial brainstorming session that eventually led to the success story that is Halen Môn, David and Alison exhibited strong strategic leadership qualities:
‘I like to see a vision, progress, etc … people think I am crazy but when they think I am normal they will start to worry.’ (David Lea-Wilson, SLNIW Conference, 16 September 2010)
One of the innovations that David introduced was asking all the employees to put their initials on the bottom of the tube, and his explanation for this reveals that his approach to leadership is transformational (Burns, 1978; Bass, 1998; Yukl, 1999; Avolio and Yammarino, 2002), in contrast to the more traditional ‘command and control’ style:
‘The employees are very important – their love and passion must come through too … We put our employees’ names on the bottom of the tubes … this is another innovation due to me not liking production codes … the bit that matters is the people. One of our employees is the Anglesey darts champion, and is very proud of that, and we are too. Only one person has left in the last two years.’ (David Lea-Wilson, SLNIW Conference, 16 September 2010)
Thus, looking after their employees is an important part of the culture at Halen Môn and David and Alison feel that it is important to innovate for them: ‘staff like to see progress, they like to see innovation’. Indeed, the staff provide the source of some of the innovative ideas that give the company its unique identity and way of doing business. For example, one member of staff came up with the idea of invoice reminders in the form of scenic Anglesey postcards:
‘This is particularly effective with local customers who don’t want the postman or woman to see that they haven’t paid their bills.’ (David Lea-Wilson, SLNIW Conference, 16 September 2010)
The formation of rich networks and strategic partnerships
Networks
Since the 1980s, there has been a shift from examining entrepreneurs as individuals towards analysing entrepreneurs in their social networks, and indeed the study of entrepreneurship has increasingly reflected the general agreement that entrepreneurs and new companies must engage in networks in order to survive (Klyver and Hindle, 2007; Hoang and Antoncic, 2003; O’Donnell et al, 2001).
According to David, one of the most important aspects of networking with other businesses is sharing experiences and problems:
‘Even being here is innovatory, I’ve met somebody I was very interested to meet, and I’m looking for inspiration as well; I didn’t expect to find it but I got it and it was great.’ (David Lea-Wilson, SLNIW Conference, 16 September 2010)
An interview with Alison Lea-Wilson revealed more about the Halen Môn approach to networking, which she describes as being informal in nature:
‘We don’t belong to formal networks … but we do belong to informal networks.’ (Alison Lea-Wilson, 17 March 2011)
As an example, she expands on how David’s trip to London, when he dressed in a lobster costume, to lobby the government about the foot-and-mouth crisis came about:
‘We’re very keen on helping farmers – not in a formal network, a band of us got together … a couple of people rang round … we’re still in touch to a certain extent.’ (Alison Lea-Wilson, 17 March 2011)
Alison is the secretary of the local farmers’ market on Anglesey, which consists of mainly local producers (primary and some secondary) selling products that include shellfish, goats’ cheese, sea salt and olives that are grown in Cyprus and processed in Anglesey. She also organizes a ‘real food’ network, and Halen Môn has strong links with the local university and the Snowdonia Business Innovation Centre. In addition, Alison and David attend local and international food fairs, such as the International Food Exhibition in London and ‘a big food fair in Turin every year that is great for networking’.
The Halen Môn approach to networking is to link with other similar companies, but not direct competitors, at events such as the International Food and Drink Exhibition, where Alison networked with artisan relish, cheese and crisp manufacturers:
‘We band together with companies with which we have customers in common, but not competitors, in order to gossip about who you can trust, who’s doing business, who’s talking the talk but not doing it, etc … we are friends rather than colleagues at this stage; for example some Russian buyers came to my stand and I took them to see other stands.’ (Alison Lea-Wilson, 17 March 2011)
Alison would be interested in sitting down and talking to another salt maker, but would be careful about what information she revealed. Within their informal networks, ideas and sources of innovation are shared and the processes of other similar businesses can be adapted to the Halen Môn context. Collaborations can also emerge from informal networks – the development of a salt rub for a premium Welsh lamb product is a recent example. A database of such informal network contacts is kept at Halen Môn.
Alison and David also network with their customers, but Alison says that this ‘is a little less two-way – we tend to listen to our customers’ suggestions about what else we could do’. For their re-branding exercise with Mad Hen, two informal networks were drawn on to provide different branding ideas and testimonials. These networks included producers, customers, journalists, food workers and chefs, ‘all of whom were very generous with their time’.
Formal versus informal networks
When asked how she would define informal networks as opposed to formal networks, Alison said,
‘I suppose a formal network has a publicized programme of events. With informal networks, we attend the same shows and agree to meet for drinks at the bar. I would rather have links with lots of different businesses.’ (Alison Lea-Wilson, 17 March 2011)
In Alison’s view, the main drawback of a formal network is lack of choice: ‘I would prefer not to have to sit down next to someone I don’t like’. However, she does go on to state that ‘it’s not always a bad thing’, as it may offer an opportunity to learn something you may not know. Another drawback is lack of time:
‘I am not keen to commit time on a regular basis as I already do that; for example, we’ve started a Slow Food group in Anglesey … we have 50 members after one year, we are very pleased with that, made up of enlightened individuals all from different backgrounds – for example, a doctor, a dentist, a farmer.’ (Alison Lea-Wilson, 17 March 2011)
Strategic partnerships
Walkers Crisps, owned by Pepsi, approached Halen Môn to make a new type of crisp that was really different, and ‘they came to us [Halen Môn] because they recognized that we were different’. David told them, ‘We will only work with you if you produce the best crisps in Britain. We’re really passionate about our salt.’ Walkers spent £11 million on a new crisp machine and £3 million on advertising. However, it was important that the Halen Môn product would be associated only with high-quality products in order to maintain the reputation. The new product was Red Sky crisps, and they are now marketed with the Halen Môn logo on the packet. Producing sufficient salt for the Red Sky crisps was a challenge for Halen Môn. The crystals are ground by hand so that they look natural. This means that the employees are working seven days a week to keep up with demand. Walkers Crisps are now among their top three customers.
Conclusions
This case provides an account of the development of a new world-leading product and brand, Halen Môn, from the start-up phase to the present day. The case study findings underline the importance of some of the key aspects of Bessant and Tidd’s (2011, 2007) simple model of innovation – the development of an innovative organization, strategic leadership and the formation of proactive linkages. In addition, the emphasis on innovation as an ‘uncomfortable’ process and the importance of informal networks provide further important insights for innovation scholars, practitioners and policy makers.
Acknowledgments
We would like to thank: David and Alison Lea-Wilson for their time and help in preparing this case study; all the Halen Môn employees, who are a vital part of the development of this innovation success story; Sid Madge at Mad Hen for providing ready access to information relating to the Halen Môn re-branding exercise; and the European Regional Development Fund (INTERREG 4A Ireland Wales programme 2007–2013) for funding the Sustainable Learning Networks in Ireland and Wales (SLNIW) project.
Note
1. Halen Môn is the Welsh language term for Anglesey Salt, and it is known as Anglesey Sea Salt outside Wales.
References
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