FAST ‘N FURIOUS INNOVATION The Learning – Article 2 of 2


In Article 1 we provided background on the Fast n Furious short course, including the 4 stage Engagement approach. In this follow up article we highlight the core tool we use throughout the program and key learnings from working with nearly 60 companies who completed the course during 2016 and 2017.

THE DIRECTION

Research conducted by McKinsey and Co highlights the importance of tying innovation strategy and objectives into the core business strategy and goals. Over 90% of businesses participating in our short course had not established clear financial goals for their innovation pipeline, nor had they established a portfolio balance that assessed short term ‘incremental’ innovation e.g. line extensions such as new flavours with ’step-change’ innovation, new category or channel entry and business model’s innovation. Every business has a limited resource pool and capability, so this must be a starting point in building consistent innovation success.

“If you don’t know where you need to go, any road will get you there… ” (Lewis Carrol)

This is why our Fast ‘n Furious Innovation model is built around Design Led thinking with an added crucial first phase – Strategy.  During the company briefing session we encourage each business to articulate two key strategic goals:

  1. What is the financial contribution Innovation needs to make to deliver their broader revenue and profit goal?
  2. What is the specific Innovation Challenge they wish to work on during the short course?

THE PLAN ON A PAGE FRAMEWORK

We adapted the start-up business Lean Canvas model for the food and agribusiness sector to provide an ‘Idea to launch’ process for businesses to follow.

KEY LEARNINGS FROM INITIAL STAGES

1.) Start with the Consumer – Early Adopter

Fast n Furious Innovation participants often had a general idea of where they wanted to innovate but often had not identified a tight target consumer group who would be the early adopter. We need to know which group of consumers we are targeting to then delve deeper into the underlying problems they have with the category; the language they use to describe it and then understand how we provide a solution that addresses their specific problem.

2.) Identifying their real problem(s)

In the food sector getting consumers to adopt a new product or service always requires some form of behaviour change on their part. It’s much easier to change behaviour if we understand problems they have with current offers on the market – real, perceived or not yet known. Consumer Profiling Tool and open-ended question techniques were used during calls & interviews conducted during the workshop to check that the problem hypothesis was real with the early adopter before jumping into solution mode. This reversed the process many companies used previously of trying to ‘sell’ an idea or product concept without fully understanding the underlying consumer problem that exists in the first place and then developing a solution that meets their need.

3.) Unique value propositions, and 4.) Solutions – top 3 features

Many businesses Innovation value propositions & solutions fell into 3 traps:

1. They didn’t know if the consumer problem was important enough to change behaviour for the solution offered.
2. They loaded up a new product with so many features they confuse the customer. This drove a value proposition that was not single-minded, differentiated and often ended up costing too much to produce.
3. Focus on the product alone and not recognising how elements such as brand, service, channel and customer engagement were also key areas to differentiate, gain trial, adoption and repeat purchase as well as making it harder for competitors to copy.

This situation was exacerbated for innovation focused on export where over reliance on the ‘Australian story’ and a lack of consumer understanding in target countries led to less meaningful differentiation.

5.) Channels

Traditionally food companies focus early energy and significant expense on gaining distribution through the large grocery retail chains in Australia with slow routes to market waiting for range reviews and significant inherent commercial risk. We recommend SME consider alternative channels to rapidly commercialise and test their Minimum Viable Product including:

Farmers Markets, Independent Retailers, On-line stores or their own retail outlets if available. The focus is on learning whether the value proposition works, including price from consumer and customer feedback rather than using traditional market research or just financial feedback.

8.) Key Metrics

Traditionally businesses have tended to focus on lag measures of innovation success like sales volume, revenue and margin or perhaps market share. This was certainly the
case for most participants in this program. Unfortunately, these measures don’t help quickly understand four things:

1. Are you reaching your target early adopters with your value proposition and message?
2. Is the message understood and addressing a problem that is relevant?
3. After trialing the MVP, does it solve the problem they expected at a price where they see value?
4. Are there unexpected things about the MVP launch you can leverage in the next evolution of the product?

The beauty of engaging directly with the target market to get the ‘Voice of the Consumer’, whether physically or through the digital environment, is you can quickly put these lead measures in place for a low cost to get feedback. This insight allows you to learn fast and explicitly. The build, measure, learn cycle (outlined below) focuses on building and validating a model for the business and innovation to ensure you commcreative something that meets a real consumer problem.

 

FAST ‘N FURIOUS GRADUATE SUCCESS: FRESH FODDER

Fresh Fodder, owned by Max and Fiona Schofield, produces handcrafted dips, salads and meals from its home base in Orange, NSW. Sold in independent retailers in NSW and Victoria, Fresh Fodder has a turnover of $4 million per annum and 22 employees.

Renowned for producing Australia’s best tasting Taramosalata, ‘The Gangster Dip’, Fresh Fodder had extended its range of fresh natural products into salads and ready meals. Max and Fiona participated in the Central NSW FIAL Fast n Furious Innovation short course, hoping to discover the next ‘big thing’ in dips.

During the pre -workshop briefing session and subsequent workshop they used the Design Led Thinking approach to identify that the core problem with their dips wasn’t the product, but poor packaging visibility and lack of differentiation on shelf, (this problem was exacerbated by the glut of competitive products on shelf, many of them ‘me-too’) . They also identified the need to improve distribution to enable availability where target consumers shopped.

During the short course phone interviews were conducted and they found that people either couldn’t find their brand or it wasn’t available in certain stores, so loyal  customers had to make a compromise in a hurry.

“We’re trying not to create [completely] new products if possible but do more with the ones we have.” They left the course with the realisation that profitable growth potential lay in innovating their core range, channel extension and business model adaptation as low sales were not attributable to the product, but to poor packaging visibility and differentiation on shelf as well as a need to improve distribution.

“Before I did the course, the way I worked was, let’s just make better stuff, if we want to sell more, we need more products. That’s how I built us into the corner we were in. The course challenged me to think differently.”

Since the Fast n Furious short course, the owner/directors of Fresh Fodder have brought a team of people on board to help run the business, so they can devote more time where they can add value; growing the business and building on their innovation capabilities. This includes expansion into new channels, outsourcing production of non-core products and expanding product formats within their
core range.

The unique mentoring session held 6 weeks post the workshop focused on how to address the key shopper problem – lack of shelf visibility and standout – to drive greater differentiation and presence.

“We have upgraded our labels, we have reversed the map, it’s basically white with a bit of colour and now coloured with a bit of white.”

Coupled with the different colours for each of the dips in their range, starting with blue for ‘The Gangster Dip’, this quick and simple solution provided far greater impact on shelf. “I think our we’ve improved our brand story telling by making it more concise and consistent. I think in the long run, it makes it much easier for the consumers to
buy into it.”

For further information contact:

XPotential ANZ

Tel: +61 (0) 431 872 331

www.xpotentialanz.com

 

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