Simon EllisOne of the key drivers in FMCG companies is innovation, but sometimes it is easier said than done. Just why is innovation management important and how can companies, large and small, implement an effective and sustainable new product development process?
The importance of innovation management
In 2005 management consulting firm, Arthur D. Little, was commissioned by EDANA (the international association for the nonwovens and related industries) to assess Europe’s nonwoven industry on the quality of its innovation management. More than 30 companies used Arthur D. Little’s innovation management learning framework (Innovation Health Check) to benchmark their performance.
Results of this diagnostic study suggest that:
- Good innovation management is crucial to profitability and growth.
- Most companies need to improve the quality of their innovation process, both significantly and rapidly.
Size up your brand’s growth potential
To understand the growth opportunities that your brand portfolio offers, it is advisable to implement a variety of projective techniques. These might include:
- A map of future markets accounting for consumer trends.
- A benefit-driven market segmentation based on function vs brand characteristics.
- A prioritised set of innovation platforms.
Mapping future markets
Market trends can be researched using such online tools as Euromonitor International: Market research data. Wipes benefit from a number of trends. The wipes market is expected to benefit from increased consumer spending on greater hygiene and convenience, due to a rise in disposable income levels. This makes wipes an excellent candidate for brand extension.
Benefit-driven market segmentation
By segmenting consumer markets according to the benefits sought from a wipe product, it immediately becomes clear where the opportunities for new product developments are.
What is an innovation platform?
An innovation platform is a group of individuals with different backgrounds and interests who come together to diagnose problems, identify opportunities and find ways to achieve their goals. A good innovation platform will define the scope of opportunities, prioritise ideas and focus on all the players.
Facilitating innovation
In larger companies, innovation is traditionally a remit of the marketing department. Brand teams, with a good understanding of customer requirements, shoehorn in creative innovation and develop endless brand extensions alongside their general day-to-day duties. To offset this strain on resources, other companies create specialist innovation teams who have the time to focus on the creation of a strategic growth portfolio. They increase their sustainable growth potential through the adoption of both long-term divergent products and core brand extensions.
Smaller companies can find the resources to innovate through a cooperative development relationship with their supplier.
The seven steps of a good innovation platform
Innovation platforms generally follow several steps.
- Initiate – identify facilitators.
- Define focus – gather research and background information. Discuss bottlenecks, problems and opportunities.
- Identify options – plan strategies to overcome challenges and exploit opportunities.
- Test and refine solutions – coordination of experiments, monitoring and analysis of results.
- Develop capacity – identify capacity gaps and find ways to fill them.
- Implement and scale up – document innovation and transition to production.
- Analyse and learn – feedback lessons learned into continuing innovation process.
Co-development
Get the lowdown on how co-development can increase innovation and what to look for in suppliers to achieve maximum success, all in the guide: Don’t Deliberate – Innovate! What’s Stopping You?
This article first appeared on the Rockline blog.
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