At Mondelēz, we aim to lead snacking by empowering our consumers to snack right, as per the powerful vision set by our CEO and Chairman Dirk Van de Put. In addition to growing our core, we take innovation very seriously and as Steve Jobs once said: "Innovation distinguishes between a leader and a follower."
A lot has been written and spoken about the right way to do innovation. Why is it then that every company has a vast graveyard of failed innovations? Many reliable sources calculate that the success rate of innovation in food and beverage is at best 20% to 30%. Many brands are trapped in their current reality and innovate incrementally with very high cannibalisation rates. And some take Icarian leaps of faith beyond their core area of expertise, many a time jeopardizing their core too in the process. Many innovations seem incremental in the first year of launch but become cases of product write-off or asset write-downs in subsequent years.
Having led innovation in various capacities for the better part of two decades, I believe that the one thing that differentiates successful innovation from failed ones is having an ambitious yet achievable vision of the future that you want to create for your brand and consumers. This is harder than it sounds as teams are often trapped in the one or sometimes three-year financial planning cycles which are too short to design for meaningful impact. Brands need to invent their own future in a horizon that allows an idea to take root and grow into a mighty oak.
One area where many innovations fail is in the innovation process.
Failure for many brands comes from a lack of rigour or discipline in the governance process which has led to complex stage and gate processes, which in turn may run the risk of delaying or diluting the outcomes.
Many try to circumvent this agile start-up like process, preferring to fail, learn and fix iteratively as they go along. I increasingly find that the answer to a successful launch is in doing both. It is prudent to be rigorous in decisions that matter, i.e. product qualification or asset investments while being agile in the approval processes, cross functional interfaces and operations.
It is important to create a mindset in the organisation that most failures are not permanent but can become stepping stones to something greater or a possible pivot, if one perseveres.
A mindset of having a healthy dissatisfaction with an innovation’s performance and constantly challenging the initial assumptions and performance often leads to unlocks that can make it stronger over time. Many times, a breakthrough in the creative proposition, pricing, packaging and pack formats or technology have made innovations on the brink of failures into big successes.
Meanwhile, a sufficiently longer-term vision of where you want the brand to go and how to get there are paramount to successful innovation. In Mondelēz Southeast Asia, we were heavily reliant on Oreo sandwich cookies but not playing in a big way in other key segments a couple of years ago. Which is a good thing, in a way, because decades of single-minded focus has made Oreo an iconic brand with a brand-power rank of one or two in key markets across Southeast Asia.
In addition to keeping the core firing, we found that consumers were ready for us to stretch within the consistency of what makes Oreo great. We have just launched Oreo wafer in Indonesia, with the same DNA, taste profile and ingredients. This lets us play to Oreo’s indomitable strengths, while learning from the local needs and the competition. This has helped us access one of the largest segments in Southeast Asia snacking. We have even centred the communication on the classical twist, lick and dunk property of Oreo, but with a twist.
This is a great example of how brands can ascertain their future horizon without going so narrow that they miss big opportunities or so wide that they dilute their core essence. It is important for brand owners to be decisive up to what level do consumers still recognise it as the brand they know and love; and draw the horizon there.
Finally, no innovation can be called a success in the first few years of launch. Beyond the vision and the approach to innovation, brands need to commit to nurture and invest behind an innovation till it achieves what I call "unassailable scale", where it can fuel its own growth and protect itself from disruption. As teams change or priorities change, often innovations fall into the "fire and forget" trap. Akin to giving birth to a child, an innovation is a long-term commitment and does payback in the fullness of time. Subsequent generations of leaders and managers need to buy in to the original vision and make it a "fire and follow" approach.
The writer is Nikhil Rao, marketing director – biscuits, Southeast Asia, Mondelēz.
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