Multinational food manufacturer, 23.5bn revenue, 315k employees

“Rebuild our product portfolio from the ground up for one of our beverage brands. Help us respond to market shifts and align our portfolio growth with a consumer-relevant innovation pipeline.”

Approach

  1. Cohere innovation efforts across five markets

  2. Scope a future portfolio framework with Marketing, Insights and R&D leaders

  3. Facilitate a series of sprints to populate the portfolio framework with prioritised and scoped innovation projects

  4. Validate market opportunities with consumers

  5. Conduct consumer research (focus groups) across markets to validate appeal and local relevance of prioritised innovations

Cross-Market alignment

Europe is a complicated market. Usually lumped together with the African continent as EMEA. No surprises that regions often disagree. What works in France or Italy, will probably raise eyebrows in the DACH region. With prioritised innovation concepts developed during sprints, one can quickly move into testing. There are numerous testing methods available from in-person focus groups to online ‘social’ platforms, surveys, Zappi or VoxPop. This early testing de-risks innovation projects and allows for iteration and adjustments across regions. This does not only work in EMEA but any other region that wants to get under the skin of regional nuances.

5-year Innovation Pipeline

Before getting stuck into ideating possible innovation projects, a framework can be helpful in ensuring ideas align with strategic objectives and market opportunities. Ideation for its own sake usually produces a lot of ideas that aren’t original, strategically relevant or considered with the business in mind. There is a case to be made for explorative ideation, however in order to successfully manage innovation it behooves teams to consider the constraints they’re working in at the very start. Considerations could be for example existing capabilities, financial means, risk, regulations and consumer demands.

A successful pipeline has a balance of low, medium and high risk projects, allowing for exploitation and exploration. Involving stakeholders from Insights, Marketing and R&D in sprints allows for quick initial evaluation of innovation projects on desirability, feasibility and viability, assessing risk in the room and weeding out ideas that aren’t realistic or possible in the near future. Cross-functional alignment can be managed through focussed discussions and engaging activities.

Product Launch

Some projects on the pipeline will be considered ‘low hanging fruit’ or ‘quick-wins’. If done right, the ideation framework will have revealed such opportunities at the very start of the process. It will also have regurgitated design criteria that can easily be fulfilled using existing assets and capabilities, hence the term ‘quick-wins’. They are no-brainers that can be launched quickly into market with little to no risk. However it is advised to consider what those launches will do to the existing portfolio: will it generate incremental value, or merely dilute demand?

Keywords: strategy, innovation, stakeholder alignment, market strategy, product development, facilitation, agile, sprints, change, portfolio, pipeline

Innovation done Right

PAs already discussed bringing together cross-functional teams can greatly accelerate and improve the quality of ideas. A basic framework to help with getting innovation right at that initial ideation stage is the DVF framework devised by IDEO.

Desirability: jobs to be done, pains and gains, consumer demand contexts, trends, market shifts, personas

Viability: P&Ls, CAPEX, investments, assets, value created, margins, business model, go to market

Feasibility: manufacturability, factory lines, technologies, knowledge, abilities, processes

These three dimensions need to come together for innovation to work. Now, the example outlined here mainly refers to ‘consumers’ suggesting this framework is for consumer facing businesses only. However, the framework is relevant to all businesses that want to create products, services, processes, content and even systems that just make sense. It is worth highlighting that DVF does create a bias towards what already exists – e.g. leveraging latent value through increased or more efficient use of existing capabilities). This is your everyday human-centred innovation, not your ground breaking innovation that is initially expensive, but gets better and more affordable as time passes. More on that further down.

Innovation Strategy and Management

Your Innovation Strategy will need to be aligned with your overal organisational strategy. Assuming your overall strategy takes into account the external environment such as competitors, 5 forces etc., then your innovation strategy should reflect how much risk your business is prepared to take. An enduring framework to help with innovation strategy design is the 3 Horizons Model. Most innovation will focus on leveraging your existing capabilities, while the further away you go from your core, the riskier and therefore more resource intensive your innovation becomes. Many have tried to identifiy the ideal ratio across horizons – 70/20/10% or 33/33/33%. Ultimately it depends on your industry, the current climate, your strategic direction and where you believe the future will be of your business.

Just embarking on designing your innovation strategy? Head over here to get tips on how to assess and design your portfolio: Portfolio Strategy

Innovation Management

A pipeline is only as good s its execution. Remember that an innovation pipeline is here to help you manage your resources and plan ahead. It does not substitute for an innovation strategy. When considering your innovation strategy you should first have a good understanding of your customers, capabilities, external factors and portfolio goals.

Now that you have an innovation pipeline, head over here to measure and maintain efforts and outputs: Governance System Design

If you’d like to learn more about how to operationalise innovation, head over here: Operating Models

Still have questions how to design your innovation strategy and embed fitting management systems?

Get in touch to get your directions for a successful Innovation Approach – Strategy and Management.

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