Innovation Doesn’t Come in Increments

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Innovation Doesn’t Come in Increments

By Peter Breen - 07/16/2018

How do you succeed in a marketplace where the rules of engagement – increasingly empowered consumers, an evolving retailer landscape and a new batch of more-nimble competitors – keep changing dramatically?

At the risk of sounding trite, I think “innovation” is the clear answer. Or maybe more accurately (and less tritely), it’s the ability to innovate that will be the key to success in an increasingly volatile industry. What’s needed isn’t innovation in any specific area of the business, or even innovation in every aspect of the existing organization. Rather, it’s a culture of innovation that will let a company reinvent itself whenever it becomes necessary – like it already has in at least a few ways.

But it has to be real innovation, not the cookie-cutter version of “incremental thinking” that far too often has led companies to “innovate” on new flavors of the core product or more cost-efficient methods of selling through traditional retail channels. The consumer goods industry has been great at that over the last 50 years, building ever more efficient, profitable go-to-market systems and processes.

“We iterate instead of innovate,” said Duncan Wardle, former vice president of innovation and creativity at The Walt Disney Co. and now creativity catalyst at id8&innov8, while speaking at CGT’s Consumer Goods Sales & Marketing Summit in June. (Path to Purchase Expo attendees will remember Wardle from an inspiring session in 2017.)

Wardle didn’t advise consumer goods executives to transform their marketing strategies or rebuild their supply chain, but instead to overhaul the way they ideate to break out of the “rivers of thinking” that can often hinder, or completely block, real innovation. (By the end of his two sessions, Wardle had attendees brainstorming such un-iterative new product ideas as Dom Perignon-flavored chocolate underwear.) 

“You have to accept some aspects of inefficiency to stay true to your brand,” said CGSM speaker Zahir Dossa, founder and chief executive officer of nascent health & beauty manufacturer Function of Beauty, which makes a completely different product for every single customer and then ships it in a bottle embossed with her name.

Dossa was responding to a question from a more traditional consumer goods executive in the audience, who asked if he’d considered preparing some product in mass quantities – or at least pre-labeling bottles with common names – in order to gain scale and efficiency. Those two standard measures of operational success aren’t diametrically opposed to innovation, but they sure can get in the way.

“Personalization is now truly possible, and that’s really hard for the systems that we’ve built [because] systems hate change,” noted Patrick Fitzmaurice, principal at consultancy Caterpillar Farm. In assessing key takeaways during the conference’s final presentation, Fitzmaurice discussed the need for traditional companies to re-evaluate their existing go-to-market strategies to confront new marketplace realities.

But it became clear over the conference’s three days that all the “digital transformation” taking place – rethinking strategies, reimagining tactics and rebuilding existing infrastructures – will in itself be insufficient. Building new capabilities to address the marketplace changes that have already happened won’t be enough either.

No, consumer goods companies will only remain relevant and successful if they take the necessary steps to develop cultures and capabilities that can continuously, relentlessly drive true business innovation. “The future is ongoing, continual disruption,” said Fitzmaurice, suggesting that the real question for traditional companies is, “How do you make a big organization nimble?”

I suspect that question will be part of the discussion again this October at the Path to Purchase Expo, where the broad agenda themes cover areas such as “The Future of Shopping” and “AI, VR & Beyond” and specific seminars will drill down into topics like facial recognition and “moment targeting.” For me, the most intriguing seminar title (given our current discussion) is “Planning for the Unplanned.”

Granted, that session will find Kellogg Co.’s Chris Perry re-examining strategies for driving impulse purchase in an omnichannel world. But that title might also serve well as the new motto for consumer goods companies, who need to put innovation at the top of the priority list so they not only can effectively address all the future disruption they’ll be facing – but might even be able to create a little disruption of their own.

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