Leaving London and heading home for the weekend. A question that came across a few times this week during my keynote is 'how important it is to be agile'. My response was speed and agility is becoming a major competitive advantage today and it is going to be more so in the next decade. Speed doesn’t necessarily mean being first, you can be choose to be a strategic fast follower and there are plenty of advantages to that. There are two ways to play the innovation game, either you are a true ”innovator” being the first in what you do or you can be an “imitvator”. You innovate while imitate and learn quickly from other people's mistakes.
It is estimated that there were over 50,000 new products introduced into the consumer products sector last year, up 77% from 10 years ago. Since the typical store has only 40,000 SKU’s, it can be pretty difficult for a consumer products company to succeed today!
Clearly the world of retail has become ultra-competitive and I’ve been giving keynotes to consumer products companies on how innovation and creativity can create a path out of this madness.
Creativity and innovation with retail, financial and consumer products companies involves understanding the reality of the challenge that exists, and innovation strategies that can take your organization forward into the world of hyper-change that is not slowing down anytime.
There
are lots of examples of firms pursuing a "fast follower" or "imitvator" strategy. You can also look at this as an exploiting other people’s innovation
(OPI) strategy. Every one can learn a thing or two from Japanese firms about
“imitvator” and, importantly, moving beyond that becoming true innovator. It is
almost like a fast track program to play. It applies to both
technological-based products to just consumer goods. A range of orthodoxies is
making it hard for them to develop breakthrough products as Chinese
manufactures are fast to catch-up. Since they have the manufacturing base and
vast local market to support any development.
In the past,
innovation from CPG mostly in the form of a steady stream of introduction to
convenient, high-quality products—ranging from disposable whatever to frozen
dinners—that changed the daily lives of consumers. The last 5 years we see
product lifecycles were drastically shortened and also seeing poor returns on
their investments in product innovation. More new products are being launched
everyday, but fewer of them are truly innovative and they end up diluting the
market with extensions with unclear customer value propositions.
Their
orthodoxies also limit what they can do and these deeply seated mental models
shaped by corporate tradition, culture, and values are difficult to unwind.
Here are some very common mistakes:
1/ Innovation
starts with existing business models and categories and then try to innovate
from there. No, you should start not start with business model but instead from
customer needs (particularly unserve and unmet needs)
2/ Focus
groups and quantitative research are a good way to start to explore trends for
innovation. No, those useless data can only tell you so much, start with a
deep dive into the everyday’s lives of your customers.
3/ Companies
should rely on current team that understand the products market for innovation
efforts. No, most executives are not trained to manage innovation, it is not a
MBA subject nor some creative brainstorming. You need to have a structure way
to play. Go to someone who can bring in a big sandbox. No need to build one.
4/ Companies
should come up with as many ideas as possible and "let a thousand flowers
bloom." This is usually the problem when a lot of creative people are in
the room, everyone will get confused and have no clues of what to do with all
these ideas. Ideas generating is only a small part of the innovation process.
Innovation is an inherently multidisciplinary, cross-functional activity. Eliminating harmful orthodoxies therefore requires changes across organizations and throughout corporate hierarchies. Clients are looking for help with their approaches to innovation. D-school has been teaching student show to play and that is the best way to enhance any innovation process. Now is time for D-school to play.
