Ivy Ross Is Not Playing Around

Ivy Ross needed a new toy. But not just any toy. As the head of design and packaging for the girls division at Mattel, she wanted something innovative, a product that was part construction set, part craft kit. She knew that sewing kits and jewelry kits were hot with girls, but Legolike construction sets were largely a boy thing. She also knew that the reason wasn't that girls don't like to build things. Girls simply build differently from boys.

Last year, with hopes of inspiring an alternative, Ross, senior VP of worldwide girls design, built a team from various departments and let the designers, model makers, and copywriters collaborate. She brought in outside gurus and Mattel's child-psychology expert to teach the team about classic architecture and about children's play patterns. She also brought in a group of girls, so that the toy makers could watch them play with pipe cleaners, cardboard, and other basic supplies. In addition to constructing rooms and houses, the girls made jewelry and characters and told stories about the world that they had created.

By the end of the year, the project team unveiled a hybrid toy: Ello, which is due out this month, isn't a construction set or a craft kit. Mattel calls it a "creation system" for 5-to-10-year-old girls. Traditional bricklike blocks are replaced by colorful, cartoonish panels, balls, miniature flowers, and other quirky pieces that can be used interchangeably to build houses, furniture, people, pets, necklaces - just about anything. Focus groups confirmed that Ello was a true rarity: a toy that appeals to parents as much as to children. "It blew me away," says Chris Byrne, a longtime industry analyst and a contributing editor at Toy Report and Toy Wishes. "You rarely see something original anymore in this industry. Usually, everybody copies everybody else's ideas."

The Making of a Platypus
How can big companies innovate? That is one of the most urgent strategic questions facing senior executives in all kinds of industries, from computers to cars to, well, toys. Just as Mattel's boys division relies on Hot Wheels to generate income, its girls division relies on Barbie - the most successful doll on the planet - to help generate more than $2 billion in annual sales. But Ross and girls-division president Adrienne Fontanella have been eager to develop a new hit in a new market, not simply another doll. Now they have a potentially groundbreaking toy on their hands. But more important - and perhaps more valuable - is the fact that the world's largest toy maker has a new way of creating toys. The Ello experiment served as the prototype for a recurring development process dubbed Project Platypus. "Other companies have skunk works," Ross says. "We have a platypus. I looked up the definition, and it said, 'an uncommon mix of different species.' " In other words, the ideal project team.

Unlike the Ello group, which worked mainly underground (in between other projects, after hours, and during lunch), the 12 rotating members of Project Platypus take breaks from their regular duties at Mattel's headquarters in El Segundo, California, outside Los Angeles. They work for three months in a studio across the street that was designed to encourage off-the-wall creativity and close-knit collaboration. "To really shift thinking, you have to shift environments," says Ross. "We're a toy company, but we weren't playing enough."

That play is starting to pay off. The first Project Platypus session, completed last summer, produced an educational brand that Ross claims is as innovative as Ello. (She can't elaborate, since it won't be in stores for another year.) Starting in January, Ross will conduct three sessions a year, much to the delight of her 700-member staff. "We already have a waiting list," she says.

The timing couldn't be better. Mattel has been recovering from its disastrous 1999 acquisition of the Learning Company. After paying $3.8 billion for the educational-software maker, Mattel watched it hemorrhage money, dragging the toy company to its first annual loss in more than a decade. In 2000, chairman and CEO Jill Barad was replaced by former Kraft Foods president and CEO Robert Eckert, who has primarily focused on cutting costs and improving the supply chain. Reducing the girls division's production cycle from 18 months to 12 months, says Ross, gave her the credibility to try an unconventional product team. When Eckert saw a short video this past summer documenting the initial Project Platypus, he was so excited that he took a copy to an annual analyst meeting to demonstrate Mattel's renewed passion and creativity.