innovation strategyroadmap ppt

Innovation Best Practices

The People Ready Business Whitepaper, Roadmap for Innovation Success Report

Should we consider fielding our own internal Pulmuone study to see where we are?

Senior Leadership communication across the organizationabout the importance and emphasis of innovation is critical

A recognition that ideas can come from everywhere not just Marketing

The three platform areas of Taste & Variety, Health & Wellness and Convenience continue to be what consumers desire

Having a Vision and Roadmap for Innovation Strategy is important

Innovation Vision

Need States

Opportunity

Platforms

Consumer Targets

Development

Platforms

Concepts

Source: P&G Internal Documentation; BCG analysis

Truly delivering on Consumer Needs/Wants is importantFirst & Second Moment of Truth

UK Pringles learned that brand recognition tied to package shape• 69% recognize Pringles with

packaging shown in picture• 67% recognize Pringles without

Pringles man• 9% recognize Pringles without

carton-shaped package

First Moment of Truth: "Packaging That Sells" is keyFirst Moment of Truth: "Packaging That Sells" is key

In 2002, P&G decided to launch Pringles chips with jokes, pictures and trivia printed on them

In 2003, Pringles did in-store promotions, online co-branding and POP displays together with G4

Second Moment of Truth: Experience drives re-buySecond Moment of Truth: Experience drives re-buy

P&G invited heavy Pringles users to a computer and online gaming event to understand their specific product needs• Product tests while gaming

They learned that Pringles consumption tied to product handling and grease slid from fingers to console• Chips should not grease fingers• Chips should be accessed without moving the

eyes from the screen

After the study, P&G has announced an agreement that teams Pringles with G4, the Comcast-owned cable TV network dedicated to video games and the video game lifestyle

• Three-year deal worth more than $2 million• Launch of "Cheat! Pringles Gamers Guide," a half-hour

weekly show offering viewers tips on how to get through challenges in video games

http://images.google.com/imgres?imgurl=http://i3.photobucket.com/albums/y93/caffeinatedsue/prints.jpg&imgrefurl=http://thepanicchannel.com/community/index.php?showtopic=30&st=20&h=209&w=504&sz=27&tbnid=Y_8E0UGqcutXbM:&tbnh=53&tbnw=128&hl=en&ei=YWaPRJiEDceaaaCl2ZoK&sig2=76fpNF3KY1awzx1xjgxrgw&start=26&prev=/images?q=pringles+prints&start=20&svnum=10&hl=en&lr=&sa=N

Project portfolio analysis provides health check of existing pipeline

Build portfolio of current projects• Determine financial attractiveness and feasibility as

detailed in Idea Management • Represent planned PD expenses as bubble sizes

(excluding past expenses/sunk costs)

Review "health" of current portfolio – address key questions in management dialogue:

• Are we investing enough in our most important projects?

• Do we fragment our resources across to many projects in parallel?

• Do we face "congestion" in our project pipeline?• Is our average time-to-market acceptable or do we

miss windows of opportunity?

Guidelines from top-management for portfolio prioritization and resource planning

ApproachApproach

Very low Low Medium High Very high

Projects not to pursue further

Projects to pursueif resources are available and overall targets not met without them

C1

C2

C3

C4

C5

Feasibility

Very Low

Very high

Low

Medium

High

Financial attractiveness

Projects to pursuewith high priority

Current projects

Innovation Best Practice Resources, January 2011 BCG

Attractiveness Summary Tool

NorthEastern University ModelCompetes in an Attractive Market

Has compelling value proposition

Strategically – financially attractive

Integrated portfolio strategy in place

Category is large enough to realize good growth

Specific segment exists with unfulfilled demand

Compelling for the consumer

&

Different consumers

Compelling for the trade

Scale Opportunity

Leverages Pulmuone Strengths

Strategy is sustainable

Portfolio vision developed

We cannot be afraid to start building external innovation networks…Our own internal capabilities

should not limit innovative ideas.

Sources: Symphony IRI, Accenture, GMA report, CPG Innovation & Growth and Mastering Innovation, The Desai Group

Execution Commercialization

Innovation managementKey lessons from BCG experience

Systematic process

Systematic process

Outsource to accelerate

Outsource to accelerate

ClearMilestones

ClearMilestones

Tight feedbackloops

Tight feedbackloops

Nurture and refine

Nurture and refine

Nextgeneration

Nextgeneration

Ideation

Leadership science inselect areas

Leadership science inselect areas

Senior engage-ment

Senior engage-ment

InnovationP&L’s

InnovationP&L’s

Early cross-functional input

Early cross-functional input

Meaningfuladvances

Meaningfuladvances

Driven by consumer needs

Driven by consumer needs

Widefunnel

Widefunnel

Cross-functional guidance

Cross-functional guidance

Manage the critical path

Manage the critical path

Focus resources

Focus resources

Communi-cationmechanism

Communi-cationmechanism

Manage theportfolio

Manage theportfolio

Mix of inside/ outsideexperts

Mix of inside/ outsideexperts

Breakthrough ideas require breakthrough process


Invention

How do you judge yourself with respect to innovation management?

Disagreement within the organizationDisagreement within the organizationKey strengthsKey strengths WeaknessesWeaknesses

Clear and defined innovation strategy

Enough ideas to support your innovation strategy

Regular and adequate top management involvement in innovation process

Major milestones (4/5) in innovation process to review status of project

Organization/culture that rewards entrepreneurial freedom and allows mistakes

11

22

33

44

55

Transparency/overview of the innovation pipiline and the status of each project?

Prioritization of projects is determined by transparent criteria in a formalized way across all brands?

Quantification of "business potential" of each idea?

Standardized documents accompany the process to exchange key information among team members?

Project champion with adequate power to control and manage a project across all functions?

11

22

33

44

55

Innovation process too long

High level of local developments for local needs (too high?)

Lack of transparency of innovation process

Organizational structure seems to inhibit the marketing strategy

Inefficient/low usage of external sources to generate ideas

Low reliability towards trade concerning launch dates of new product

11

22

33

44

55

66


Following a clear and simple stage gate process is also helpful

Idea generation Preparation Decision Implementation

• Purchasing simulations in own locations and core regions

• Annual category studies, focus groups

• Consumers accompanied 12 hrs./day for 1 mo.

• Regular meetings with "idea generating companies"

• Cross-category and cross-country innovation meetings

Brand manager/ director for new products

• One- and multidimen-sional concept tests at POS

• International concept and market tests

• Feasibility studies• Estimation of market

potential• Preview tests of new

products by retailers• Supplier involvement

in development of new materials and ingredients

Category Planning Team(3 FTE: brand manager, market researcher, engineer)

• Internal benchmarking of new products relative to existing portfolio, corporate targets and strategy fit (own database)

• Quality and product use tests by consumers in their homes

• Financial business case (NPV)

Decision Team(GBU Leadership Team, R&D Functional Leadership Team)

• Supply concept and production

• Marketing concept, “go-to-market” strategy, advertising readiness

• Clear milestone and action plans for all kind of contingencies when product is launched

• Regulatory application• Training and deploy-

ment of sales force.

Program Team(several FTE from market research, production, supply chain, sales, marketing, law, finance)

Actions

Res-sources

Source: Expert interviews; BCG analysis

“It was clear that we did not know how to do it. There were lots of evidences of teams doing the right things... the right market studies, superb product development and testing, and so on. The issue was one of consistency. We did some plays well, some projects, some of the time. But that is not how you win the Championship year after year” - Senior P&G executive

Execution is Critical!

Consistentproject leadership

Challenge focus to tollgate review (Stage gate decisions)

Project reviews elevated to BU leadership

Consistently updated view of portfolio

Early line involvement in market launch plan

Project leader follows project from conception past launch• Accountable for project success, launch• Authority to ensure proper plan execution • Ability/experience to manage multi-functional team (R&D, Trade, Brand, Finance)• Should be our best people, and a career-making move

Tollgate reviews focus on finding the holes in the business case • Tollgate presentation limited to 10% of review, remaining 90% questioning, challenging

plan assumptions and progress• Ongoing scorecard distributed beforehand to highlight progress since last review• Projects do not advance unless committed deliverables are achieved

NPD Organization category, functional leaders chair regular pipeline reviews• Play devils advocate role in challenge meetings for projects• Add credibility to process – share responsibility for killing or altering project• Provide category and portfolio perspective

Brands/Finance maintain “big picture” perspective of projects• Works with all constituents (R&D, Trade) to communicate available capital and

marketing resources• Maintains master schedule of when, how launches will be sequenced

Brand, Trade involved early to develop budgets plan• When dollars are being discussed, brand/trade becomes involved• Market realities, trade capability realities reflected through line involvement• R&D, Brand, Trade organizations all sign-off and commit to delivering plan by market launch

- Each individual held accountable to plans


Understanding the Customer key planogram windows can help improve innovation execution

• Top customers (i.e. top 10/15) typically introduce or cut in new items at planogram timing. Planogram timing over the years has reduced at many customers to once a year due to the resources involved with changing the sets.

• Mars Foods has two primary launch windows a year:First half of the year launches:– April – Decisions are made at leadership team level of go/no go launches for first half of the following

year.– June/July – Samples to sales force for January launches (6 months advance sell in)Second half of the year launches:– October/November – Decisions made at leadership team level of go/no go launches for back half of

the following year.– January/February – Samples to the sales force for July launches (6 months advance sell in)

Reinforce transparent, disciplined payback metrics

Peers measure innovation success primarily by revenue growth...Peers measure innovation success primarily by revenue growth...

...and only half measure performance of innovation process...and only half measure performance of innovation process

11

20

30

30

47

50

56

0 20 40 60

Higher prices

Respondents (%)

New-product success ratio

Overall revenue growth

Number of new products/services

Return on investment in innovation

Customer satisfaction

% of sales from new products/services

“How does your company measure its success with innovation?”

0

20

40

60

80 78

Agree

Strongly agree

52

Innovation process performance

Innovation inputs

Innovation outputs

% Agree

60

“My company collects and uses metrics to assess the following:”

Source: BCG analysis

• Initial launch reviews take place 12 weeks, 6 months, 9 months and one year after launch– Later reviews happen every 6-12 months

• Results are reviewed by cross-functional teams and include senior management involvement to highlight relevance of process

– A number of indicators are tracked• market share and consumer behavior• sales both for the product and for the category as a whole (consider cannibalization

and/or real category growth)• EBIT performance• return on investment (ROI)

– Performance is evaluated vis-à-vis business plan and supporting materials used during decision-making phase

• Under performing launches are put under close watch (“kill or cure”) – Usually given a defined period of time to design and implement turnaround measures– The decision to withdraw new products can be taken from as early as 6 months after

launch• usually “kill” decision is followed by an orderly withdrawal plan to avoid channel

conflict

Active monitoring determines product innovation success

Enables transparent risk management for everybody

Reviewsequence

KPIs

Sanctions

Source: BCG interviews; public information about P&G; BCG analysis

The Innovation Path

Paving the Road To Success For Pulmuone Foods USA, Inc.

Pulmuone US Situation Analysis SummaryConsumer Trends: The Boomer generation is getting older Asian & Hispanic populations are on the rise Households are decreasing in size Generation Y is coming into prominence Ethnic foods are quickly emerging into the mainstream Convenience factor is still important given busy lifestyles Consumers have defined that they want ‘wholesome’

foods, not foods to treat specific disease states With global obesity crisis, focus on healthy eating is more

important than ever.

Competitive Trends: Leverage Mega Brands Consolidation of brands into top 15 food companies Acquisitions have led to new segment opportunities and

capabilities Pasta competitors are crossing over into different

temperature states Restaurant/Chef inspired brands translating to Retail

Customer Trends: Focus on own label Increased pressure by retailers becoming their own

marketers and creating mega brands that cross categories and temperature classes

New alternative retailers filling needs of consumers desire for fresh, prepared, healthy products

Competencies: Needs Gap Largest Pesto manufacturer in the U.S. Tofu expertise – U.S. and Korea History and Track record in understanding Fresh Certified Organic positioning Fresh pasta/sauce manufacturing Open to alliances and partnerships Pulmuone does not have core competency in Frozen or

Ambient Pulmuone weaker in the area of branding/Marketing

Implications

Consumers:

Change is implicit, identify and react quickly

Build competence in convenient, portion controlled items

Focus on how to win in ethnic – Asian and Hispanic targeted offerings

Significant economic pressure leads consumers to look and challenge their definition of value by brands

Competitive

Increase partnership competencies to leverage brands into new temperature classes and increase presence across categories

Need to have broader appeal to Generation Y and early adopters to build cache and awareness for a lifecycle

Customer

Be nimble and flexible to take advantage of customer private label opportunities where appropriate.

Competencies

Identify ways to increase usage of Pesto

Identify ways to introduce innovation to Tofu to help it become more widely accepted by US consumers

Leverage the right partnerships/alliances to extend capabilities in the proper adjencies.

Vision

Authentic Wholesome Foods

Pulmuone will make healthy, delicious food that our consumers will be proud to serve their families.

Mission

Create products that consumers and customers regard as their partner in leading fuller, healthier lives

Consumers will consider our products as combinations of great taste, health and convenience that enable them to feel good about their purchase as they nourish their mind, body, soul, and values

Key Strategies

Create new value for existing brands via Renovation & Partial Innovation

Develop and leverage borrowed technologies/capabilities from Pulmuone corporate in Korea

Creation of expanded market space with breakthrough ideas and entry into larger categories

Expansion of target consumers with focus on emerging growth areas (Kids, Gen Y, Asians, Hispanics and Aging Baby Boomers)

Enhance internal capabilities - Gilroy

Enhance brand building and marketing competencies

Pulmuone Foods USA, Inc.

Innovation Vision & Mission

Strategic Innovation Plan

Circle Size = Market Size

Stuffed Dough / Sauces

Health• White WW flour• Ancient Grains• To your health• Sauce Plus

Flavors of the world• Empanadas• Calzones• Asian dumplings• Korean Rav

Kids• Shapes• Crunchy Rav• PBJ Rav• Grilled Cheese Rav• Burger Rav

Snacks• Pan fried desserts• Dessert Sauces

Culinary• Sauce cubes• Pasta bites

Convenience• microwavable

Authentic Wholesome Foods

Health & Well Being Simplify My Life Taste Experience

Vision

Pulmuone Foods USA, Inc. Innovation Roadmap

Need State

Platforms

Opportunity Platforms

Consumer Targets

MGF Wildwood

Adults Kids

Kids

Adults

Convenient Product Forms,Convenient Cook

More convenient,Disruptive packaging

Bolder, EthnicFlavors

New eating occasions

Platform areas: Ready When I’m ready, Distinctive Purity, Full Flavor Savor the Moment,Instant Enhancement, Next Gen quick meals, No-Fuss Quick bites, Light meal parter,Functional Health Selections, Carefull creations, top chef transformations, impressive dinner experience, self drivenHealth and wellness, experiential eating, Absence of negatives, light and simple, fast favorites, fresh prep quality

Last spring, we initiated a stage gate process with a cross-functional leadership team to review the gates. Since Gilroy start up, we moved away from this. We need to get back to original process.

Ideation• Idea in the

shower• Framed ideation• Idea screening • Idea Approval

(GATE #1)

• Target timeline: 1-2 weeks

Concept• Idea qualification• Market study• Concept

development• Concept testing• Concept

approval (GATE #2)

• Target timeline: 1-2 months

Development• Culinary recipe• Bench top• Pilot test• Production test• Sensory• Shelf life test• Mfg location• Go or No Go

(GATE #3, #4)• Package • Specification• Training

• Target timeline: 4-6 months

Launch• Item setup• Procurement• Production run• Sampling

• Target timeline: 1 -3 months

Tracking(Post Launch)• Quality• Sales

performance• Profitability

• Target timeline: assessment 6 months post launch

•SKIP for club itemsonly if flavor extension

Top Channel Trends

Top 50 Grocery Categories

Top GrowthCategories &

Top Kroger Categories

Pricing & Price ElasticityTrends of Different

Categories

Tasks & Sub Process by STEPId

eati

on ☑ Idea in the shower

☑ Thinking frame: 1) Strategic fit

2) Company core direction 3) Market fit 4) Consumer target 5) Estimated size of prize 6) Margin target set 7) Estimated resources 8) Estimated timeline

☑ Idea Brief☑ Product Brief

☑ GATE1: Idea Screening

Con

cep

t ☑ Idea qualification☑ Market study☑ Concept development☑ Concept board☑ Concept testing☑ Concept brief

☑ GATE2: Go or No Go Decision

Develo

pm

en

t

Lau

nch

Trackin

g

Deliverables

Idea or Product Brief

Deliverables

Concept Brief

☞ SKIP for club itemsOnly if flavor extension

Tasks & Sub Process by STEPId

eati

on

Con

cep

t

Develo

pm

en

t☑ Formula/Process development ▼ Primary recipe ▼ Bench top formula ▼ Cutting (☞CLUB: 1-2-3) ▼ Internal panel huddle ▼ Pilot scale test or PTR ▼ Consumer panel huddle (☞CLUB: Optional internal sensory & Buyer’s approval) ☑ Equipment assessment☑ Initial product info(cost,nutrition, ingredients)

☑ GATE3: Go or No Go

Develo

pm

ent

cont’

d ▼ Scale up production run▼ Consumer panel huddle (☞CULB: Skip this step)▼ Shelf life test – 70 days target▼ Product/Process spec

☑ GATE 4: Go or No Go

☑ Package development☑ Label development☑ Source identification Q/A

Lau

nch

Trackin

g

DeliverablesSensory Report, CAPEX

Assess.

Deliverables

Sensory report, IPS

The basic process architecture established a commonset of stages and stage decisions

SD2 SD3 SD4 SD5SD1 Assessment Development Preparation Launch Evaluation

AR signed First launch

Dedicated programteam formed

Learning loop

Creation

Audit reviewProgram charter

Idea brief

Researchcharter


These are defined by key decisions


AR signed First launchDedicated programteam formed

Learning loop

Creation

Audit review

Stage decisions• Creation of

Program Team, given prioritization

• Approval of contract fornext stage

• Business caseis proven

• Commitment to target launch timing

• Approval of contract and resources for next stage

• Product definition is frozen

• Commitment to launch volumes

• Approval of AR submission


• Agreement to start production

• Commitment to launch plan


• Approval of rollout plan for future markets

• Decision on scope and timing of evaluation

• Define when Programteam ends


Three teams are responsible for executing the process


AR signed

Learning loop

Creation

Audit reviewFirst launch

Program charter

Decision team–Senior Mgt Team

Program team

Categoryplanning team


The category planning team owns stage 1


AR signed

Learning loop

Creation


Decision team

Program team

Categoryplanningteam Program

charter


The CPT is responsible for generating and prioritizing ideas within their category

• Populate new-product grid and technology grid– Underlying technical

principles demonstrated– Economically attractive

Ideas

Iterative process of evaluatingand prioritizing ideas

• Complete program charter and stage contract for most attractive ideas

82004 SGP Key Issues / Opportunities - March 3,2004

Blades & Razors – 2004 New Product Requests

EB/ER 265 - Q4

Renovation

MarketPenetration

Innovation 2005 2006

EB/ER- 290 - Q1

2004EB/ER 246 - Q1

EB/ER-307 - Q2

S. Excel 3 - Q1

Elastomer Flanker - Q1

M3TurboBro3 - Q1

ER- 283 Flanker-Q1

ER-246 Fashion 2 - Q1

Custom Plus 3

Vector Plus- Ph I ILHOB Plus - Q1

Disposables

Systems

ER-309 - Q3

Vector Enhancement- Q1

Vector Plus - China - Q3

EB/ER- 313- Q4

M3 Champion (GLA) - Q1

EB/ER-320- Q2

2007EB/ER- 260- Q1

NOTE: M3 Disposable - TBD

SD1


The program team/extended team is responsible for executing on the program


AR signed

Learning loop

Creation


Decision team

Program team

Categoryplanningteam

Program charter


Role of the program team/extended team

PE&I

Product development

Mechanicaldevelopment

Fragrance development

Tech supportservices

ComOps(sales)

Package andgraphics design

Designservices

Package development planning

Mfg engineeringservices

Factories

Contract fill

New productscoordinator

MRD (consumerresearch, forecasting)

GBM

Finance (costestimating)

Finance(financial analysis)

Legal

GEHS

Manufacturingtechnologymanagement

Package development

Value chain

Finished goodsplanning

ComOps(planning)

Purchasing

New productsplanning

Product analysis

Product evaluation(sensory, microbiology,analytical, statistics,claims, consumerservice)Program

Team LeaderEngineeringor procure-ment

R&D

Business management

Value chain


Low complexity programs follow a simplified 'FastTrack'

SD2 SD3 SD4 SD5SD1 Development Preparation LaunchAssessment Evaluation

AR signed

Learning loop

Creation


Decision team

Program team

SD1Creation Assessment, development, production, launch, evaluation


There is a common prioritization tool and process

SD2 SD3 SD4 SD5SD1 Development Preparation LaunchAssessment Evaluation

AR signed

Learning loop

Creation


Decision team

Program team

Categoryplanningteam

Program charter

Portfolio
