In this month's inKNOWvations, Dr. Bryan Seyfarth discusses innovation challenges that face consumer goods companies and shares some suggestions on how to remain successful.
Persistent volatility in economic conditions, commodity costs and consumer preferences are not new trends. I find more and more consumer goods companies are looking for ways to respond with greater speed and effectiveness to external developments.
Historically, many consumer goods companies have treated innovation planning as a once-a-year process. As a result, they are sometimes slow in reacting to shifts in the business environment. Consequences include “fire-drill” development efforts, low-margin, late-to-market offerings and loss of market share to more strategically and developmentally agile competitors. A growing number of consumer goods manufacturers are realizing the critical importance of continual reassessment of innovation plans and adjustment of product-development priorities. This process, which needs to take place at the executive level, often means more than shifting funds from project to project. It may require adjusting the plan itself, re-focusing investments from one strategic segment to another. It may also require re-thinking how the front end of the innovation process is being managed. If the front end is managed well, an organization should be able to rapidly add new concepts to its pipeline to capitalize on opportunities created by external developments.
My recommendation is that consumer goods companies move quickly to assess their ability to systematically respond to market change, analyzing their innovation planning process just as they do other mission-critical business processes. Companies that can operationalize effective response to change are likely to be the ones that find the greatest success.
Learn more about common gaps between goals and performance, how good ideas get stuck and that only one out of five consumer goods companies are considered “highly innovative.” Download the recent Consumer Goods Technology magazine survey results about product development goals and actual performance of their products.