By Will Rees-Hooper, Webb deVlam, 13 October 2017
More than eight in ten R&D projects are said to end in failure. In a guest column, Will Rees-Hooper, innovation director at strategic brand design and innovation consultants Webb deVlam, outlines eight ways food companies operating in the UK can improve their chances of success.
It’s a tough time for the UK food and beverage sector. While it’s no stranger to innovation, to turning around new products, formats and flavours in record time in the fight for market share, the fact remains that competition is high, shrinkflation is rife, profits shares are plummeting and people are spending less than they did 20 years ago.
Companies are under increasing pressure to launch the next big thing. The stakes have never been higher, or the need for a more effective approach to innovation greater, yet so much falls at the first hurdle. To survive and flourish, businesses in the ultra-competitive F&B sector need to accept that, in today’s market, the output of innovation programmes can determine whether an organisation lives or dies.
But according to PwC research, the world’s leading companies spend $650bn on research and development (R&D) every year – and around 85% of it fails. While shocking to most people, for those of us who have been involved in innovation, it feels broadly accurate, including for the UK market.
Anything organisations can do to increase the success rate of their innovation programmes will deliver not only a greater return on that investment but also products and services that are likely to increase market share and shareholder value. Here, then, are seven ways you can increase the success rate of your innovation projects.
1. Get ruthless – and fast
Too much time in innovation workshops is spent going around in circles with the same ideas. These ideas, which we call ‘dolphins’, keep surfacing, because they are neither good enough to progress nor bad enough to dismiss immediately. So they never go anywhere. They just take up time in workshops, creating a sense of inertia and weakening enthusiasm for the entire process.
For this reason, we split innovation into two distinct types: ‘Keep or Kill’ and ‘Find and Form’. Keep or Kill is where we consider existing ideas or concepts, using a clear, focused process to enable the correct decision. It gives the business time to make an informed decision on which basket to put their innovation eggs in. Find and Form, on the other hand, creates new ideas or concepts to help organisations explore what type of eggs they could use to exploit a new opportunity.
By consciously splitting innovation this way, you allow new ideas the space to grow without being held back by existing ideas competing for attention. You also explore the existing dolphin ideas in the right context, giving them an opportunity they wouldn’t otherwise get.
2. Stop starting with a blank sheet of paper
The dolphins should not be discarded. After all, if they keep surfacing there is probably something in them. It may be that their time has not yet come (innovation lives at the tip of the arrow and often an idea needs the wider business or the market to catch up) or that they were not properly expressed in the past.
Typically, a workshop will deliver around 12 ideas, of which two or three progress, and of the remaining nine or ten a handful will be worth revisiting. Normally those ideas get left by the wayside as the business rightly focuses its efforts on developing the ideas with most potential. However, when the next innovation effort comes around, the slate is wiped clean and it starts from scratch. Starting out with those four or five ideas that weren’t right at the time can deliver results faster than starting from scratch.
3. Base recommendations on relevant, timely data
Innovation and research can be great partners. But traditional research can slow down what should be an agile process so much that the opportunity passes by while waiting for results. It is a key reason so many innovation projects fail and it is why we built our insight community, the Home of Ideas, a panel of more nearly 4,000 consumers across four continents who offer us rapid insights and input within 24 hours at any point in our innovation process.
4. Maintain momentum
Pace is critical in every stage of innovation. Innovation programmes that take too long can find themselves out of step with corporate strategy, so that the innovation, which seemed good at the start of the process, is irrelevant by the end. Our six-week 312 Innovation Accelerator is designed to inject rigour, pace and progress to any innovation process.
Once it moves back into the business it needs to maintain momentum. Unless there is a steady, and ideally increasing, stream of news to build anticipation and excitement, it is easy for initial enthusiasm around an idea to dissipate. This becomes even more of an issue when those who are leading projects move on from their role or company before the innovation initiative has had a chance to get to market.
Delays are a killer to momentum and projects. Forward manage as much as you can, avoid big gaps in progress and, if you have to wait, fill the time with other productive work. Be creative and always look for quicker, more efficient way to do things.
5. Handle transition with care
Innovation is a precious, fragile thing. It needs careful nurturing. Pass it between too many hands and it can end up damaged, misdirected, confused or crushed entirely. Try to keep a guardian of an idea involved from start to finish, and ideally work with a partner who can support you through the entire process of innovation, design and production.
They should have expertise in structural design, technical engineering and production lines and spend time with your R&D and operations teams. Understanding the implications of any innovation idea means the efforts can be focused on giving operations and production solutions, not problems. This will ensure seamless transition of the idea and the flourishing of your precious idea into a commercial opportunity.
6. Bring in the experts
While corporates are efficient machines for producing goods and making money, when it comes to innovation, they tend to be slow and cumbersome. They struggle with uncertainty, and in recent years this has seen many of them caught out by the disruptors.
Today’s entrepreneurs are aided by networks, both virtual and physical, that barely existed a decade ago. Pre-seed funding is now far more available to them. Investors now give them ‘founder-friendly’ term sheets and offer guidance around the innovation process. Furthermore, a new breed of incubators offers entrepreneurs guidance on selecting the right programmes as well as practical support in key areas like technology development or marketing.
As a result, a growing number of corporates are finding ways to externalise innovation. They are looking to programmes like our 312 Innovation Accelerator, which produces purposeful innovation with clear, straightforward recommendations that are easy to communicate and sell in to the broader business.
7. Integrate innovation and brand
Finally, think about where innovation sits in a business, who funds it and how it is integrated. When does an NPD become part of the portfolio and who takes on the financial support for it?
All too often, brand teams fail to accept winning concepts from innovation teams because they have already attributed their budgets in their brand plans and are unable or unwilling to invest in the launch. To some extent, the solution here is in the communication of the idea. Present it well and help brand teams to become as excited as you are.
It is also about the integration of innovation throughout the corporate structure. Some innovation teams are separate departments without a clear communication or integration path into the rest of the business. Much as ‘digital’ has moved from being a satellite discipline operating outside of the hub, innovation must be integrated into the core function of business culture and practice in order to deliver a better success rate.
8. Innovation cultures
There are many ways innovation can fail to deliver. It is a huge investment for many corporates, and what is more in the past decade the world of business has become far better at innovation so that sustained failure in this area is no longer an option for any organisation.
The successful F&B businesses of tomorrow will be those that adopt innovation wholeheartedly. They will have the right partners, they will embrace productive failure and minimise wasteful failure, but, most importantly, they will make innovation central to their culture and way of working.