What it takes to drive innovation success
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Andria Long discusses what it takes to drive innovation success. She provides 4 keys: 1) Define the right goals by setting realistic expectations for size of innovation. 2) Focus on creating what consumers really want or need through early consumer guidance. 3) Differentiate and evolve offerings or risk being replaced. 4) Embrace failure and learn from mistakes to iterate and improve faster than competitors. Innovation success rates are low due to not meeting these keys - not understanding consumer needs, lacking differentiation, and failing to adapt or learn from failures.
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What it takes to drive innovation success
- 1. Andria Long VP Innovation & Consumer Insights What does it take to create innovation that wins?
- 2. Based on CPG experience in food and personal care, and continuously synthesizing LEARNINGS AND BEST PRACTICES, developed a proven approach… COMPANIES BRANDS
- 3. Issues are the same across the industry regardless of … Size Ownership Budget Culture Capabilities International Mergers/ Acquisitions Transformation
- 4. Here are where some of the learnings came from
- 5. Define what it is
- 6. What is Innovation? “If there is no differentiation, there is no innovation.” True Innovation: solves problems (needs) in a new or different way
- 7. 90% of launches fail to meet critical milestones Why is this important? New product innovation success rates are painfully low Source: IRI 2015 Pacesetters Nielsen: 85 percent of new products fail in the marketplace
- 8. 1) Define the right goals 2) The discipline of creating what consumers REALLY want/need 3) Differentiate AND Evolve or Die 4) Embrace failure and learn from it Keys to Driving Innovation Success
- 9. 1Defining the Right Goals for SIZE of Innovation What gets measured gets done
- 10. 1Defining the Right Goals for SIZE of Innovation How many brands achieved over $100 million in 2016? > $100 Million
- 11. Blockbuster products are few and far between 1Defining the Right Goals for SIZE of Innovation 2015 2016
- 12. $ Millions >$100 $80-$99 $60-$79 $40-$59 <$20 Year-One Sales Distribution NPP 2016NPP 2015NPP 2014 14% 6% 6% 6% 38% 37% 22% 37% 46% 67% Source: IRI Market Advantage™, new products that completed their first year in calendar year 2016; Note: food and beverage median year-one sales excludes DairyPuremilk. Note: numbers may not add to 100% due to rounding. Median Year-OneSales Food & Beverage $11.4M 83% $20-$39 Defining the Right Goals for SIZE of Innovation1 Set realistic expectations
- 13. 2
- 14. 2 We need more big ideas, stretch ideas, creative ideas than I sense we’re thinking about today The discipline of creating what consumers REALLY want 2
- 15. 2Most common mistake is starting here… IDEAS Business Case Platforms Ideas Concepts Fuzzy Front End The discipline of creating what consumers REALLY want
- 16. 2The discipline of creating what consumers REALLY want Commercialization Make It Make $ Most organizations are designed for efficiency, economies of scale based on capabilities Or here…
- 17. 2The discipline of creating what consumers REALLY want Solve a Need Point of Difference willing to pay for START HERE New products fail when the product DOES NOT MATCH up with the consumers needs/wants How do I do that?
- 18. Obtain consumer guidance early in the process! Rapid Prototyping Ask them! 2The discipline of creating what consumers REALLY want
- 19. 2 Is there a need gap that currently exists? Is the idea big enough? Can the brand deliver against the needs? Is there a reason to believe? Colgate Kitchen Entrees Harley Davidson Perfume Source: dailyfinance.com Bottled Water for Pets The discipline of creating what consumers REALLY want
- 20. $6.89 $7.99 $18.84 2The discipline of creating what consumers REALLY want Observe them!
- 21. 2The discipline of creating what consumers REALLY want
- 22. 2Consumers can’t imagine what doesn’t exist, but they can definitely tell you what can be better Break/Scratch Buy the whole thing for 1-2 songs Customization not simple = mixes Fast forward on a cassette – really! Portability Not light to work out Skips Not easy to carry multiple artists with youSource: Andria’s Opinion/User Experience The discipline of creating what consumers REALLY want
- 23. 3Differentiate and Evolve or Die Innovation does not start with copying what is already available
- 24. 3Competitive environment further drives the need for differentiation Source: IRI Pacesetters April 2015 Need to offer incremental volume potential CONSUMER Average household needs fulfilled by 150 items RETAILER Average Grocery store has over 44,000 skus Differentiate or Die
- 25. 3 Is it really that hard to be different? Differentiate or Die
- 26. 3Everything can be made BETTER And you can charge MORE Differentiate and Evolve or Die
- 27. 3 What are you willing to do to save time or make your life easier? Evolve or Die
- 28. 3No cutting No pot or device No dishesNo peeling SAVING TIME SAVING TIME Evolve or Die
- 29. 3A point of difference consumers see and are willing to pay for FREE $35.00$8.99 Evolve or Die
- 30. Failure isn’t fatal, but failure to change might be. – John Wooden
- 31. 3 WHAT HAPPENS WHEN YOU DON’T Stakes are high if you don’t evolve
- 32. 3 On average, an S&P 500 company is now being replaced about once every two weeks At current churn rate, 75% of the S&P 500 will be replaced by 2027 Source: Innosight Executive Briefing 2012 Pace and rate of change
- 33. 3 Source: MIT Technology Review 9/10/13 http://www.technologyreview.com/view/519226/technology-is-wiping-out-companies-faster-than-ever/ Large companies are getting crushed by innovations made elsewhere
- 34. 4Embrace failure and learn from it What would you attempt to do if you knew you could not fail?
- 35. 4Embrace failure and learn from it
- 36. “Failure is simply the opportunity to begin again, this time more intelligently.” – Henry Ford 4Embrace failure and learn from it MOST INNOVATIVE COMPANIES
- 37. MOST INNOVATIVE COMPANIES "Only those who dare to fail greatly can ever achieve greatly.” – Robert F. Kennedy 1993 Macintosh TV Macintosh Portable Sony Betamax MICROMV™ camcorders Walkman Model T Ford Edsel 4Embrace failure and learn from it
- 38. “Failure is success if we learn from it.” – Malcolm Forbes Know what went right and wrong! • Lessons learned: Don’t repeat the same mistakes Leadership Team • Need to be able to understand why FAIL FAST Iterate & Learn your way in 4Embrace failure and learn from it
- 39. In today’s environment, companies need innovation not only to thrive, but survive 4Embrace failure and learn from it CONSUMER SHOPPER CATEGORY MACRO TRENDS AND WE ALL HAVE ACCESS TO THE SAME DATA
- 40. 4Embrace failure and learn from it “The ability to LEARN faster than your competition may be the only sustainable competitive advantage that you can ever achieve.” Peter Senge – The Fifth Discipline
- 41. 4Embrace failure and learn from it What if you fail? You will. Then, you move on.
- 42. 1. Not level setting expectations 2. Not creating what consumers really want/need 3. Not differentiated 4. Not evolving with consumer needs 5. Not learning from failure 6. Not changing Keys Reasons for Failure
- 43. If you don’t do it, someone else will… “I believe there is one and only one source of innovation – pissed off people.” Tom Peters
- 44. The World’s 50 Most Innovative Companies 2016 Competitors aren’t just big Fortune 500 companies 1 BuzzFeed 2 Facebook 3 CVS Health 4 Uber 5 Netflix 6 Amazon 7 Apple 8 Alphabet 9 Black Lives Matter 10 Taco Bell 11 Robinhood 12 Universal Studios 13 Huawei 14 Cyanogen 15 InMobi 16 Novocure 17 Bristol- Myers 18 Amgen 19 Spotify 20 GE 21 Warby Parker 22 Riot Games 23 Farfetch 24 Everlane 25 Kit & Ace 26 Slack 27 Rethink Robotics 28 SoulCycle 29 Sixteen String Jack 30 SANAA 31 Airbnb 32 Generator 33 BeMyGuest 34 Social Chapter 35 Hudi 36 Box 37 Fitbit 38 Snapchat 39 Sama 40 Nidroll 41 Affirm 42 Earnest 43 Aspiration 44 Vail Resorts 45 Noora Health 46 Shyp 47 Shopify 48 Babbel 49 Jaunt 50 Hasbro
- 45. Only 5 companies have been on multiple times 2009 2010 2011 2012 2013 2014 2015 2016 12 11 5 30 5 9 2 27 4 2 18 6 4 3 1 1 13 14 2 7 11 19 45 27 20 17 1 21
- 46. “Learning and innovation go hand in hand. The arrogance of success is to think that what you did yesterday will be sufficient for tomorrow.” -William Pollard
- 47. QUESTIONS? If you would like to learn more: https://www.linkedin.com/in/andrialong/ Andria Long