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Why are so many CPG innovators frustrated and demotivated?

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By Elaine Watson+

11-Jun-2014
Last updated on 11-Jun-2014 at 23:01 GMT

Companies that include input from sales at critical stages of the new product development process tend to pick more winners, says Affinnova
Companies that include input from sales at critical stages of the new product development process tend to pick more winners, says Affinnova

Many people developing new products at CPG companies feel frustrated and demotivated according to a new survey, which probably comes as no surprise given the high failure rate in the trade. But looking at what firms that produce more winners have in common could help boost everybody's mood, claims Affinnova.

In a global survey * of 400 people working in the innovation function at CPG firms of all sizes, Affinnova found that “most CPG innovators we surveyed are clearly frustrated with their companies’ current processes and lack of competitive advantage.  

In fact, 40% admitted they are currently considering leaving their companies to work for more innovative companies. No doubt lack of engagement and low morale are also having an impact on performance.”

Poor tools, lack of consumer data, subjective decision-making…

Among the biggest areas of frustration identified by CPG professionals in Affinnova’s survey were:

• Inadequate tools: 75% felt their companies were using outdated technology for innovation. 76% were also dissatisfied with collaborative practices in their organizations.

• Slow processes: 49% felt that their companies were unable to move fast enough to keep up with competitors and the pace of the marketplace.

• Lack of creativity: 62% said creative risk taking was not supported by their companies, limiting breakthrough ideas.

• Subjective decision making: 55% believed that internal politics— not data—was guiding most new product decision making.

• Limited customer insight: 66% believed their company wasn’t doing enough to understand consumer needs.

Firms that include sales input at the early stages of the product development process are more successful

But there were clear differences between firms with higher levels of self-reported new product success and those with lower levels, Mike Black, Affinnova’s VP, Marketing & Communications, told FoodNavigator-USA.

55% of CPG innovators surveyed by Affinova felt that internal politics— not data—was guiding most new product decision making

For example, CPG companies that include input from the sales team at critical stages of the product development process tend to be more successful, as are those that spend more time benchmarking ideas and innovations against competitive products as well as amassing consumer insights, he said.

“Most people we surveyed said their companies involved business functions such as consumer insights, R&D and brand in the innovation process. But top performers were more likely to involve sales/trade in critical stages of the process. Often you see that people invite sales to the party much too late in the game.

“Sales people understand the market and getting their input earlier can help ensure products are more highly differentiated and relevant.”

Consumer data is also critical, however, he said. “If you base your decision-making on data and insights, you get away from the subjective decision-making process.”

Innovators at top performers were more likely to feel…

  • Encouraged and rewarded to take creative risks.
  • That their organizations promote learning and adjustment from failure.
  • Supported by leadership (top-performing companies offer guidance, support and running room as well as money, data etc)
  • That they have access to advanced technology to support new product development.

Innovators in bottom performers are more likely to feel…

  • That their talents are being underleveraged.
  • That politics play a bigger role than they should in decision making.
  • That senior leadership is a barrier to their innovation.
  • That they are working for a company that is losing to competitors.

Money can’t buy you love - or winning new products

As other research has shown, meanwhile, despite their extra resources, big companies, especially those with established creative structures, are no more likely to produce winning new products than smaller ones, said Black.

CPG firms that include input from sales people at the early stages of the NPD process tend to be more successful

“Having a formal innovation stage gate process or structure is not a key factor separating top-and bottom-performing companies. Neither is size or revenue. What matters is the culture.”

Who is Affinnova?

Affinnova  is a global marketing technology firm that works with leading CPG companies from Hershey to General Mills, Dannon and Coca-Cola to help them rapidly assimilate and evaluate consumer and competitive data to help speed up the new product development process. It also works with firms on their communication strategies, packaging design, pricing and marketing strategies.

* The global study was conducted between November 2013 and February 2014. To participate, respondents had to qualify as being innovators on the front line. 75% of the companies surveyed were in food/beverage.

Click HERE to read the full report from Affinnova.

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2 comments (Comments are now closed)

innovating backwards

Food is so much about logistics that most participants in the supply chain (nowhere near being a value chain as of yet) look behind them rather than ahead to the customer. That is why there is such alienation among those who are thinking of the customer and the public.

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Posted by wayne roberts
14 June 2014 | 23h00

Its like Global Warming

Companies tend to act on innovation only when its already too late. But, its better late than never. Lets have some fun!

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Posted by Dante Olivar
12 June 2014 | 17h50