Why write the Agile Innovation Playbook
For years, we both joked with each other that we should write a book, baulking at the idea of becoming such a thing as a ‘Thought Leader’. We had calls from companies asking us to explain what we were doing. We had ‘round table’ discussions with those in the industry to highlight the current innovation process’s inefficiencies and the need for a new innovation solution. We presented our case studies and our thoughts to industry peers, with more and more requests to come and talk to senior teams about the need to change the innovation process. The joke about writing a book slowly became a genuine need as more people were asking more about it. Writing a book together encapsulated our mission to resolve the frustrations of working day in and day out with innovation and make innovation a better engine for growth for retailers and manufacturers.
The current state of Innovation
FMCG innovation – in particular, food & drink innovation – has largely been in line with business school models of innovation over the last 40 years, namely the gate stage process (Waterfall), delivering a perception of steady innovation growth year after year, albeit single-digit percentage growth. However, innovation has been promising double-digit percentage year on year growth for decades and consistently failed to deliver its own expectations because of the high innovation failure rate. Even the relatively limited innovation successes come at a high cost both in absolute terms (we estimate for every successful product requires an innovation investment of £41m in a traditional waterfall approach). In the last 10 or so years, technology companies have demonstrated a new way to innovate products that allow companies to invest more in innovation and be more confident in the results. However, FMCG, and in particular food & drink, has been slow to pick up on the Agile Innovation trend. Given our experience in both food & drink and technology, we can demonstrate how Agile Innovation can transform the consumer products industry into a more dependable engine for growth, which is cheaper, faster and better than the old Waterfall approach.
We are failing and we’re happy with that
By any reasonable metric, the state of innovation is more of a failure than it is a success, albeit the limited successes pay handsomely for the failures. What causes FMCG innovation to be in a high state of failure is systemic and not down to any one thing, whether it’s a failure to launch the wrong product to the wrong consumers at the wrong time with the wrong marketing activation support. Failure of management to understand what drives successful new products and support structures that enhance autonomy and authority to develop winning innovation. Or a failure of innovators to not look for a different way of doing things other than what they’ve been taught for the last 40 years. Or a failure of consultants to not advocate for innovating innovation with a clear pathway drives things forward. Or a failure of self-interested agencies to not challenge clients and their runaway flights of the fallacy that support, perhaps even enable, the feebleness of innovation execution. The way we innovate is broken, and we can’t tinker with the current way to make it any better. We need a new way to innovate.
There is little to cheer about from the sidelines when it comes to innovation, other than that this broken-down, failing discipline still manages to deliver growth for business with a fairly respectable return on investment of 185% (this is in Chapter 2 of Agile Innovation Playbook).
Continue with failure or look for a better way
To coin a phrase, failure is no longer an option for innovation: significant pressure is being applied to costs, and development time is being squeezed in order to generate faster profits. For more than 12 years we have been looking for a new way to innovate, a way to safely generate more growth and profit from innovation by being clearer on what works and what doesn’t work. We tested, again and again, different approaches from different disciplines and industries, using our own money and skills, to prove what works. We now want to bring this to you as part of our mission to eradicate innovation failure.
The future of innovation
We outline the case for innovation in and of itself; the costs of innovation; the reasons innovation fails; and then explore how to apply Agile Innovation in a way that offers clear management practices through benchmarking and applying the scientific method to test all the decisions in the process.
We are heavily influenced by approaches and thinking in other sectors outside of CPG and FMCG, including Eric Reis’s The Lean Startup as well as other works covering entrepreneurialism such as SSRN’s Value Lab: A Tool for Entrepreneurial Strategy. We have a full list of books, papers and reports for further reading at the end of this book for those who wish to explore more.