I don’t want to get too personal, but I am tempted to suggest that you own some product or products made by Alessi – products that make you feel vaguely artistic and unique even though they are mass-produced and sold to millions of people. If you are familiar with the history of Alessi, you already know that this nearly century-old company has come quite far from its industrial beginnings as the top supplier of stainless-steel serving equipment to Italy’s professional kitchens. Alessi’s transformation commenced in the mid-20th century but kicked into high gear when Alberto Alessi, the founder’s grandson, assumed control of product development in 1970. Alberto dreamt of becoming an architect, but his father demanded that he join the family business instead. It is widely believed that his thwarted artistic ambitions were behind his decision to pull the venerable firm into a whole new market.
Maybe so, but Alberto’s vision was also grounded in good business sense. Alessi went from producing a classical low-margin high-volume good for a clientele of mainly professional buyers, to serving up a high-margin luxury good ideally suited for the new global class of lifestyle-conscious consumers that arose in the 1980s.
How did Alessi make this change in product focus? This is the topic of an article in Administrative Science Quarterly by Elena Dalpiaz (of Imperial College Business School), Violina Rindova (of McCombs School of Business), and Davide Ravasi (of Cass Business School). They show that, interestingly, this move into a much more profitable and “cushy” market segment was controversial and complex. Professional serving tools are designed differently, made differently and marketed differently than the artistic goods that Alessi now focuses on, so this was a change in philosophy and in skills.
An artsy failure
Alessi d’Apres, Alberto’s first attempt to link Alessi to the art world, was a collaboration with world-class sculptors (including Salvador Dali) that experimented with the then-fashionable idea of mass-producing industrial art objects. In an all-out bid for artistic credibility, Alberto invited top art critics to review the collection and convinced a prestigious Milan bookstore to display the first Alessi “art multiple”, fresh from the factory floor.
But the project failed, both commercially and as a branding exercise. Prototyping the sculptors’ designs proved difficult given the constraints of pressed steel manufacturing, resulting in only one sculpture actually making it to the shelves. Worse, the wasted effort to build prototypes for the collection diverted resources from Alessi’s bread-and-butter industrial products. Consequently, sales of the company’s existing product lines suffered. Meanwhile, the collection received only modest attention from tastemakers.
By the end of the 1970s, Alberto had abandoned the pursuit of pure art in favour of a hybrid “applied art” approach that better leveraged existing company strengths. Instead of assembly-line steel sculptures, Alessi started aiming toward manufacturing perfectly functional household products that could be mistaken for objets d’art.
In the first initiative under the new strategy, “Tea & Coffee Piazza”, 11 celebrated urban architects were invited to reimagine tea and coffee sets as offbeat models for the postmodern city square. The transformation of homely kitchenware into a medium for high-concept design won plaudits from cultural gatekeepers as well as popularity with consumers. The New York Times suggested Alessi had created a brand-new market for “designer kitchenware”. Alessi became the only Italian kitchenware manufacturer to prosper during the downturn of the early 1980s.
In the intervening decades, Alessi has vastly expanded its international reach while sustaining the delicate balance of its “applied art” brand. How did company leaders entrench such a strong sense of brand identity? One effective tool, as the authors describe, was an in-house theoretical lingo used liberally in senior leaders’ speeches and internally distributed literature.
Among the many examples of Alessi-speak cited in the paper is “amphibious”, not a word you usually encounter in connection with kitchen stuff. What makes a coffee maker amphibious? It can live in two environments, moving smoothly from kitchen, where it functions well, to living room, where it looks good. Amphibious products, both conceptually and in finished form, were used internally in Alessi to explain the strategic change. They were used externally to guide customers along the path from the set of truly artistic (but less useful) products that were sold in small numbers in the transitional period to the mass-produced and more useful (but still pricey) products that Alessi wanted to sell.
This is a very important insight. Amphibious products created a bridge in the customers’ mind between the artistic and the useful. With this bridge in place, the customer was willing to adjust the price range paid for a coffee maker, or an egg cup or a corkscrew.
Amphibious products also created a bridge in the organisation between its origin as a maker of mass-produced serving tools to its destination as a maker of artistic household goods. Alessi’s products were now amphibious; Alessi was now amphibious. Truly an interesting success story.
Henrich R. Greve is a Professor of Entrepreneurship at INSEAD and the John H. Loudon Chaired Professor of International Management. He is also the Editor of Administrative Science Quarterly and a co-author of Network Advantage: How to Unlock Value from Your Alliances and Partnerships. You can read his blog here.
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