Co.Design

A Seven-Step Guide To Innovation Amid A Crowded Market

A plea for ingenuity, L.I.B.E.R.T.Y., and the pursuit of innovation

As an industrial designer and the CEO of a design agency with experience across many fields, I am struck by how difficult it has been for the Consumer Packaged Goods (CPG) industry to successfully innovate to meet the needs of the ever-changing marketplace. How did that happen?

The history buff in me looks back to the birth of our country and the many innovations that have come about through the ingenuity of our early pioneers, whose legacy includes everything from blue jeans, to the fire hydrant, to toilet paper. These innovations helped create a world of comfort and spurred America's ascent to superpower status. But today, we are saddled with a debilitating short-term focus. We lack the resilience and courage required to pursue breakthroughs. Where's the spirit of invention that formed our nation?

Efficiencies yield lower costs, but also impede change.

The CPG world has spent far too long driving cost out of the brand at the expense of innovation. Manufacturing processes, long-established infrastructure, and an eye for quick profits and positive quarterly reports encumber today's CPG companies. Factories optimize the production of yesterday's ideas, but they're unable to satisfy tomorrow's needs. Scale and efficiencies yield lower costs, but also impede change. It's not easy to manage change when it comes to big-brand, high-volume, high-speed, low-margin companies.

So how do we address these competing challenges? Unlike traditional advertising, which has become increasingly fragmented, packaging retains its role as the tangible brand ambassador. It communicates, it delivers, and it delights. In this overcrowded marketplace, packaging has become the brand's best asset in the fight for the hearts, minds, and wallets of the consumer.

How can brands innovate through packaging? What will reignite those early survival instincts? How do we manage change, continue to adapt, and ultimately position ourselves to succeed in the competitive marketplace? The answer is actually quite patriotic:

?Look toward tomorrow.
?Implement a skunk works.
?Break from current conventions.
?Explore the possibilities.
?Reveal the opportunities.
?Translate for business.
?Yield results.

Look toward tomorrow

What will people want tomorrow that they don't realize yet today? What kind of technology and infrastructure will have to be built to meet these needs? Cost concerns aside, how will your brand provide a preferred experience for consumers in the future? Consumers? needs, attitudes, and behaviors change. Resources ebb and flow, and new competitors enter the marketplace. Brands simply can't continue to produce the same products and rely on making them cheaper and faster. We must seek to discover and develop better ways of satisfying these shifting needs.

Implement a skunk works

To foster an environment for invention, you need to establish a dedicated interdisciplinary team whose full-time and long-term focus is on radical innovation. The team needs to operate with a high degree of autonomy and remain unhampered by bureaucracy. Ideally, its funding should come from seed money that is not reflected on a particular brand's P&L. And the team will need a champion -- a senior leader within the organization who can help break down barriers, obtain alignment, and continually support funding for the overall cause of radical innovation.

Break from current conventions

Brands need to stop thinking about packaging as an expense and start viewing it as an investment. Innovation takes time and a shift in behavior away from risk aversion. It requires embracing the necessary trial and error that is associated with innovating, as well as freedom and permission to fail. It is through failure that one learns what doesn't work and brings solutions one step closer to meeting the needs of consumers, the business, and the planet.

Explore the possibilities

We must be free to explore all possibilities and evaluate all viable technologies, existing and emergent. Set up a perpetual scouting mechanism to search for and catalog all compelling technologies. Rethink packaging distribution systems to maximize performance and sustainability. Seek to understand the competitive threat by being the first innovation team to realize future possibilities.

Reveal the opportunities

If you have the ability to evolve your thinking quickly and change ideas as new information is revealed, you can expedite your path toward success. Today's process requires continued engagement with all stakeholders and a consumer-driven/business-aligned approach to the discovery, design, and development of new packaging innovations. Leveraging the power of rapid-prototyping ideas is essential to revealing the opportunities.

Translate for business

Today's designers have the ability to envision and embody ideas, but they also need to be able to speak the language of business. This entails enormous attention to details such as cost and timing of implementation, as well as calculating the potential return on investment. These are all important elements to the structural packaging equation and to presenting strategies to gain alignment.

Yield results

In order to achieve results and see profits, there must be courage and commitment to focus on the long term, acknowledging that innovation demands forethought and a financial commitment. We can no longer afford the tenure of short-term brand assignment to set the schedules for packaging change. Packaging innovation takes much more due-diligence than has been historically afforded.

Think about pursuing innovation by investing in a future that is different than the past. Embrace the reality that today's product offering has already started its journey toward extinction as needs, tastes, and desires continually shift, and our offerings must adapt accordingly. If you embrace the ultimate death of a product or package, only then will you be able to ignite the survival instincts that were the catalyst of invention for the American frontier. Necessity will always be the mother of invention. The CPG industry aches for a revolution in thinking as to the role of packaging within the marketing mix.

[Top image by Jessica Torres]

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3 Comments

  • Bryan

    Peter has written a very elegant article. I don't think
    anyone who reads it will disagree that all the areas cited are necessary
    components for even next generation product innovations. I also think it's fair
    to say that most people in product development want to work on exciting,
    innovative and profitable projects. So where's the innovation in the large CPG’s?
    The answer is; why should they? Where’s the “Translate for business” incentive
    to play product or packaging innovator?

     

    In Peter Clarkes article, Peter asserts  “The CPG world has spent far too long
    driving cost out of the brand at the expense of innovation. Manufacturing
    processes, long-established infrastructure, and an eye for quick profits and
    positive quarterly reports encumber today’s CPG companies.” There
    is innovation, it’s just not in product and packaging. Not saying CPG’s couldn’t
    or shouldn’t do more, but take P&G as an example……

     

    They are
    successful. It’s important to understand that P&G is a $92B CPG with about
    40, $1B dollars brands. They are the most innovative marketing company on the
    planet, and no one else even comes close. However, they are about building brands,
    not creating products and businesses.  

     

    They are
    long-term focused. They don’t have divisional head’s, they have group execs
    with a long term strategic focus and are willing to play a very patient game.
    They often go to market at a loss. Unless it’s a straight cost savings, their
    return on strategically important investments, like owning a product category
    or market expansion, is typically 4,5,6 sometimes 20 years out.  

     

    P&G
    is doing something right, and if you dig deep and connect the dots it’s easy to
    see that strategically they are playing a very conservative investment game, managing
    the North American market as a cash cow to fund geographic expansion into new
    global markets. You don’t have to focus on radical product or packaging innovation
    with that kind of business strategy.

     

    P&G as
    a product and packaging innovator, has lost its former luster of 15-20 years
    ago, but they are very successful and not likely to willingly change soon.  Within products and packaging hey are focusing
    on their stated goal of getting 50% of their innovations from the outside, but
    the Connect+Develop, open innovation program is broken- they are too hard to
    work with from the outside.  This I know.

     

    Unfortunately,
    a company with that kind of scale, culture, legacy and success (the Supercorp) creates
    an inertia that will not be easy to change. A senior management change will not
    affect it. A culture change initiative will not likely even get on paper and taking
    entrepreneurial risks with small experiments is highly unlikely as they are
    focused on $100MM+ opportunities and won’t entertain high-risk, small stuff.

     

     

    Peter is
    right, the large CPG’s are not radically innovating with products and packaging.
    He also has a good point that the package is the “ambassador for the brand” and
    brands are important to the large CPG’s. But success does create a certain
    blind arrogance.  Unfortunately the big
    CPG’s will only change after a disaster (the “Game Changer”)like a radical drop
    in stock price or a big loss in market share.

     

    The real, more radical innovations are going to come from
    the small entrepreneurs and designers who are willing to work on speculative
    designs and opportunities and have less burden and smaller businesses ambitions.
     So, it’s up to the small entrepreneurs to lead the horse to
    the water by innovating from the outside and translating the opportunity into a
    good business proposition and if your lucky after you do all the hard work,
    risk taking and investment, you will be ‘acquired”  by the big players for big money (see Nottingham
    Spirk- the Spin Brush story).

     

    It’s much easier to get $100MM form a company once you’ve
    proven market success,  then it is to get
    $1MM in seed money for an innovative product. This I also know.

  • curt dawkins

    Great article Peter- thanks for sharing.  This is a good reminder that I should be showing my packaging customers the way forward with ideas to help their products and brands in the marketplace.