Articles Posted in CPG

Great Ideas = Great New Products, Right? Wrong!

Successful innovation is more than just coming up with great new product ideas.  And innovation strategy is more than a series of ideation sessions.  Great new products don’t just come from great new ideas.  Rather, they often come from learnings … Read More…

Listen Up: Beats Audio Accelerates Innovation to Become a Billion-Dollar Business

Did you hear that?  Did you hear the voice of the consumer singing a sweet song about their needs, dreams and desires?  Rapper/producer Dr. Dre and record mogul Jimmy Iovine heard it, and they crafted it into their latest hit: … Read More…

The Innovator’s Dilemma

With a nod to the Clayton Christensen book of the same name, I wanted to revisit the concept of the innovator’s dilemma from the perspective of marketing research.  I do this on the heels of attending the recent Edison Awards (a combination awards ceremony … Read More…

Is Your Research Letting Store Brands Win?

Once upon a time, store brands were considered cheap, generic, inferior – what you would buy when you are on a budget or seeking a bargain. These days, that fairy tale is over. Store brands and private labels have become … Read More…

Hillshire Finds Misplaced Shopper

In a nutshell, this article in my estimation describes the key problem that many manufacturers and retailers have encountered: They’ve forgotten the shopper. How could that happen? Isn’t that why they are in business?

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This Is Very Important

It isn’t often that you see a sign like this: THIS IS VERY IMPORTANT. There’s a message that will stop you in your tracks and prompt you to read more. Many of us at Ipsos did, especially when we realized, with delight, that our colleague’s article was named as The Most Important Presentation at Esomar Congress.

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The Groupon Phenomenon

Within CPG, the impact of so-called “daily deals” today really rests on their ability to impact traditional marketing drivers such as awareness, distribution, trial and repeat.   At a minimum a service like Groupon can be used to launch new products, induce trial, and create another distribution channel.  Beyond that, if these services can truly be made to be social (though such examples are few at this point), the value increases exponentially. So experiment now.  But do start with an end objective in mind, like you would with any marketing initiative.

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Writing Concepts As If Guided by Voices

If a successful company like P&G – with a claimed 50% success rate for new products, versus an industry average of 15-20% – spends eight years developing Tide Pods, don’t our good ideas deserve just a bit more nurturing than we are giving them?  A good idea, poorly executed, will fail – same as a poor idea, well executed.  A successful concept requires both a good idea and proper execution.  Success of this nature can absolutely happen on a deadline, but it’s less likely to happen if you procrastinate right up until the deadline.

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Database Follies

As with the review website Metacritic, the static database problem runs rampant in Market Research, if you look for it – inherent in any rating where we ask people for a monadic evaluation without understanding current behavior and competitive context. Whether in CPG or other areas of life, the question isn’t whether you like something – it’s whether it would replace what you are currently doing. Next time you go to conduct a Market Research study, ask yourself these two questions.  (1)  Did I start by understanding current consumer behavior?  (2)  Did I force consumers to make a choice within a competitive context, by comparing to their current behavior?  If the answer to either of these questions is “no,” you might end up with the Metacritic problem.  Unless it turns out you truly do live in Lake Wobegon, and all your ideas are above average.

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What Cartoons Teach Us About Successful Innovation

Pixar represents a company whose innovation process we should study and emulate within the CPG world. We should think about how their process works, and how they align with the way CPG companies operate. I’d argue within CPG we often take “relevant” and try to make it “different,” whereas Pixar takes different and tries to make it relevant. Same principles, different approach, better outcome.

og kicks off, I think the title of this post alone communicates everything you might ever want to know about the type and quality of contribution you can expect from me.

I wanted to start with a broad-based discussion about successful innovation, and more specifically successful innovation processes.It’s a conversation I seem to have with people quite frequently, searching for companies that we might collectively consider to be successful with new product innovation.

Putting the wisdom of the (clearly identified and pre-screened) crowd to work, and factoring in their collective knowledge as well as a sprinkling of my unavoidable and periodic cynicism, my colleagues and I talked about a broad swath of companies – P&G, Unilever, Reckitt, General Mills, all the usual suspects.We threw in a smattering of high tech companies as well – Apple, Google, Microsoft.

During the course of these conversations, we had a difficult time coming to consensus – though many of the companies we discussed are successful innovators, who clearly over time have built a business through innovation, it was difficult to select a specific company that we thought should be emulated. We saw some visionaries, we saw some vultures good at circling around on the next big thing developed by some soon-to-be-wealthy entrepreneur.We saw some who were exceptional at close-in line extensions, others who were better at the mid-range or breakthrough.We saw some deep pockets, we saw some luck.But in none of these situations was there consensus that we’d identified a defined, repeatable, successful process that anyone could emulate.

Everyone’s Gone to the Movies

I was at the movies with my kids this past weekend, and saw a promotion for the upcoming Cars 2 movie from Pixar.My first thought was “Thank goodness, finally a movie I can see with my kids that doesn’t regret that electricity was invented.”Then I realized there is in fact a company whose innovation process I admire and believe should be emulated by every CPG company.

The Pixar Run of Success

There is a company in one of the most difficult businesses on earth who has never had a failure, whose worst-performing product would be considered a raging success by any other company.Take a look at this run of success for Pixar (listed in order of release, including worldwide gross and Metacritic score):

·Toy Story:$362 million, 92

·A Bug’s Life:$363 million, 77

·Toy Story 2:$486 million, 88

·Monsters, Inc.: $529 million, 78 (my personal favorite)

·Finding Nemo:$869 million, 89

·The Incredibles:$636 million, 90

·Cars, $462 million, 73

·Ratatouille, $624 million, 96

·WALL-E:$533 million, 94

·Up:$727 million, 88

·Toy Story 3:$1,064 million, 92

When a movie making $100 million is typically considered a success, and with a Metacritic score of 70 or more in the top of the database, that’s a great run.And it applies equally for new products and line extensions (meaning, uh, sequels).

How Pixar Does It

An article in Wired magazine detailed the process for creating Toy Story 3.If I were to turn that into a process we could use in the CPG world (note that this is not all in this one article, I’m drawing on other things I’ve read as well), I might do it as follows:

  • Build stable teams that know and trust one another
  • Create a vision, and trust the vision (note:the vision can be singular [think Apple] or collective)
  • Set deadlines that enable the pursuit of perfection but never its attainment
  • Create dual evaluative processes
    • Within team – to insure adherence to the vision
    • Across team – to provide context and pressure test
    • Throwing stuff away is not a failure – it’s part of the process
  • Balance the creative and the commercial sides
    • Aiming just for short-term commercial success is soul-less
  • Wash, rinse, repeat
    • Same group of people
    • Same process

Pixar has really done exactly what Ipsos counsels our clients to do.They’ve selected a platform (in this case, a particular type of animated movie), continually ideate around that platform (and I’m willing to bet ideas come from lots of places), and created a culture that fosters that innovation in a constructive way.My guess is that culture is very different than the ones we typically encounter, with people rotating teams as if riding a carousal.It’s more of a collective success, as opposed to the individual success we typically see rewarded.

How Pixar Fosters Collective Creativity

Turns out, it’s about people and process.From a Harvard Business Review article, directly from Ed Catmull, President of Pixar (as paraphrased by me):

  • Management’s job is not to prevent risk but to build the capability to recover when failures occur.
  • It must be safe to tell the truth.
  • We must constantly challenge all of our assumptions and search for the flaws that could destroy our culture.
  • In complex product development, creativity involves a large number from different disciplines working effectively together to solve a great many problems.
  • Leaders sort through a mass of ideas to find the ones that fit into a coherent whole, which is a very difficult task.
  • If we aren’t always a little scared, we’re not doing our jobs.
  • Customers want to see something new every time.
  • We as executives have to resist our natural tendency to avoid or minimize risks.It is this instinct which leads executives to choose to copy successes rather than trying to create something brand new.That’s why you see so many products that are so much alike.It also explains why most products aren’t very good.
  • If you want to be original, you have to accept the uncertainty, even when it’s uncomfortable, and have the capability to recover when your organization takes a big risk and fails.What’s the key to being able to recover?Talented people!

Note that any place Mr. Catmull used the word movies, creative, script, etc., I removed it or replaced it with a CPG word.Bet you couldn’t tell the difference.He could have been speaking directly to those of us who work in CPG innovation.He also said one other thing, from a different speech, that I wanted to be sure to include: “I don’t like hard rules at all.I think they are all bull@#$%.”A man after my own heart.

An Innovative Company to Admire

On a personal level, I’m glad to now be able to say, when someone asks if there’s a company whose innovation strategy I admire, that innovates across different development horizons equally well, “Yes, it’s Pixar.”Think about how their process works, and how it aligns with how CPG companies operate. I’d argue within CPG we often take “relevant” and try to make it “different,” whereas Pixar takes different and tries to make it relevant.Same principles, different approach, better outcome.

Sources:

http://www.the-numbers.com/movies/series/Pixar.php

http://www.metacritic.com/

http://www.scottberkun.com/blog/2010/inside-pixars-leadership/

http://blogs.bnet.com/harvard/?p=407&tag=col1;post-292

http://www.wired.com/magazine/2010/05/process_pixar/

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