Innovation doesn't come from the boardroom

Food and beverage manufacturers in Canada today are caught between a rock and a hard place.

On one hand, the cost of getting a new product into the hands of the consumer seems to be getting prohibitively high. On the other, without new products companies lose not only the attention of the consumer, but the retailer as well. Manufacturers can’t afford to bypass innovation because without new products, they risk falling into obscurity. This is particularly true as the up and coming grocery consumers, millennials, have a noticeably shorter attention span for brands.

So if innovating is critical to survival, where do the ideas for innovations come from?

What I have heard from so many companies is that the ideas they come up with are just reiterations of the same things over and over again. Their innovations include mostly line extensions, new flavours, or new packaging that isn’t accompanied by a new application – not innovations.

When I dig further into how companies are coming up with their “innovations” the answer is inevitably some version of a group sitting around a boardroom table throwing out ideas.

I’m not trying to say corporations and those who work for them don’t know their business. In fact I am saying the opposite. Corporations and those who work for them know their business too well, and therefore are not capable of seeing that great new product. They self-monitor and limit their creativity by allowing what they know to get in the way of seeing things clearly or broadly enough. They allow their operational capabilities, what has or has not worked in the past, the likes and dislikes of the top executives, to cloud their judgement and objectivity.

The first step in the innovation process MUST start with the macro trends. The big picture will tell you how things will change in your favour or against you, and help you plan for what is to come. What are the high level changes that will have a significant trickle down effect? Misreading or forgetting about basic trends in demographics, technology and economies could be detrimental.

Blockbuster Video is the perfect example of a company falling victim to trends and not innovating to adapt to the inevitable. By starting with those big macro trends, and understanding how they will impact your business, the innovation process almost unfolds itself.

So now you know the trends and how they will impact your business, where do the great ideas for innovation come from? The answer is one simple word: consumers. The key is to talk to consumers in broad terms with a clear vision / objective of what you want to achieve, about what they do, how they do it, what would they do to make it easier or better?  There are many new technologies and techniques out there that can make this process much easier, and it doesn’t have to break your budgets.

In the late ‘90s, I was meeting with the executives of a food manufacturer and I was talking about how the demand for low sodium was going to be a big trend on the horizon because of the aging population. One of the individuals in the room, told me I was completely wrong because they had launched a low sodium product a couple of years prior and had discontinued it because it was a dud.

Less than three years after my conversation with this company, low salt or sodium became one of the biggest trends of the past few years, and it continues today over a decade later.  That company has since re-launched low sodium products. They had a great idea but the timing was off. If they had looked at the demographic changes in Canada they would have seen low sodium becoming a big trend because the popular belief at that time was as people get older they need to cut back on sodium consumption for the overall heart health.

So the bottom line is manufacturers have to innovate or die a slow, painful death with many casualties lying in its wake. Let’s try to avoid that.

Step one is to look at the macro trends, and work your way down. When trying to translate the trends into opportunities you have to delve into the root causes of the trends and where its going.  Step two is to get away from the boardroom table and talk to the consumer and get their input.  From there the process is like launching any other line extension, but with a lot more work.