As consumers begin to make their way back out in the world, newly vaccinated and likely to resume more traditional spending patterns, CPG firms are recognizing a need to jumpstart new product development to quickly capitalize on this market opportunity.
Transforming innovation—with urgency—requires new thinking about how to re-organize new product development processes and portfolios. There isn't time to invest in a multi-year initiative; rather, business leaders need to accelerate those processes immediately, and avoid getting stuck in philosophical debates about execution details that only derail progress.
One trend we've observed in the CPG market is that firms are recognizing they can move faster if they start smaller and plan their transformation journey in an iterative series of stages. By initially focusing on only those elements of innovation required for effective decision-making, they can gain adoption quickly with a core set of users, focus their organization on those innovation elements with the greatest value impact, and set the stage for more detailed execution transformation that can come later. Borrowing from Agile principles, this is called applying a “ Minimum Viable Product” or “ MVP” approach to enterprise innovation transformation, and it enables companies to take dramatic steps forward in weeks rather than months.
Figure 1 below provides a generic example that is typical of such a journey, building transformation in a series of at least three phases or “releases”:
Figure 1: A Minimum Viable Product (MVP) Approach to Deploying Enterprise Innovation Management
In Release 1, the focus is on laying the foundation for portfolio transparency, with the initial participants being a core set of portfolio and team leaders with cross-functional representatives, people with ownership and are heavily invested in the success of the transformation. The work in this phase is to create an initial framework for portfolio and process data, managed in a simple and graphical “project on a page” that streamlines data entry and provides just enough data to support portfolio visualizations and gate decisions. This also requires a skeletal Stage-Gate ® framework with a bare-bones set of deliverables to enable cross-functional input. For most companies, this initial stage can be completed in a few weeks so long as scope is managed, and expectations are clearly set that more detailed decisions will be deferred to future phases.
In Release 2, there is a shift to expanded Stage-Gate governance, with greater participation by full cross-functional team. This means a broader and deeper set of standardized deliverable templates, and more sophisticated automation of the governance process. For example, this may involve “smart” deliverable templates that are only activated when the project is of a certain type; automated gate presentations that instantly fill in key project data; and/or prioritization tools that allow portfolio management teams to explore investment scenarios based on diverse assumptions. This phase may take longer than the initial phase, but with greater payoff – there is now a significantly broader set of cross-functional participants that gain value and save time.
Once an organization has this foundation of innovation governance deployed and adopted, it can then shift its attention to Release 3, which enables full cross-functional execution and optimization. This is characterized by a greater detail in several dimensions: deeper levels of structure in project management and task execution; deeper levels of data for resource planning, which can enable portfolio optimization comparing resource demand against resource constraints; and deeper levels of SKU modeling and automated integration to other systems, which can then enable comparison of forecasts vs. actuals, and to assess portfolio success rates. Additionally, once this level of execution is achieved, a more rigorous assessment of the product lifecycle becomes possible, and companies can assess trends in cycle time and their actual speed to market.
To learn about a real-world case of a company that is taking this approach, check out the webinar by our client Mondelēz International , presented by Andre Dias Alves da Silva, Mondelēz Director Innovation I2M/IIM, and David Malik, Mondelēz Global I2M Commercialization Lead. They share how Mondelēz:
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