By Bryan Seyfarth, Director Consumer Goods, Sopheon
Today’s food, beverage and CPG manufacturers face a turbulent and daunting market environment. Dramatically shifting consumer preferences, demographic changes, new paths to distribution, and new technologies mean consumer firms are more challenged than ever to keep up. However, one principle endures: those companies whose pace of innovation matches the pace of change will successfully ride the wave. Those that don’t will be washed on the rocks.
For small, up-and-coming consumer firms, making fast changes in response to a dynamic environment comes with the territory. But is it really possible for large enterprises to achieve a similar level of agility? This theme of enterprise agility—that is, how can large enterprises innovate with the pace of small companies, while leveraging the scale advantages of a larger organization?—is age-old in the business world. But for the past few years, lessons learned in the world of software development are offering some new answers to this question.
The core principles of “Agile” software development– sometimes referred to as “Scrum” – have been around since 2001, and consistent and sometimes dramatic productivity improvements have been the results. Steve Denning stated in an article in Forbes that the best Agile teams “routinely obtain productivity increases of 200 to 400 percent.”
However, the application of these principles to non-software innovation processes has been slower coming, perhaps because of fundamental differences between developing a new app and, say, bringing a new cereal brand extension to the market. Increasingly, however, consumer firms are finding these principles have significant value when viewed through the right lens. I discussed how this could be done in a recent webinar on this topic.
It goes without saying that these principles of Agile development differ sharply from today’s reality for many consumer firms. But despite the differences between the two, if consumer firms can find ways to adapt these principles to their unique business context similar improvements in speed and productivity are possible. Given the scale of the challenges such firms face today, this ability to become more agile—and more quickly adapt to a changing market—is simply not optional.