In the first blog of this series, we talked about how to build understanding of the challenges with which your organisation is dealing today. This phase is crucial to define a joint ambition. In the second blog, we had a look at the next step: how to shape choices. And now, it’s time to take action! Let’s have a look at some examples and how to do this.

In reality, many companies fear of taking risks. Even worse, employees are penalized for making mistakes. But what we often forget: our best teacher is our last mistake.

When it comes to innovation, you’ll always have to take risks, but there are ways to reduce them and their impact. The first question you should always ask yourself is: do I solve a problem or a need of someone? Someone can be a big company or a group of end-users. And is this someone willing to pay for my great idea? Do not think you have the answer, but use data (qualitative or quantitative) to validate this.

Let’s have a look at an example: Indra Nooyi, former CEO of Pepsico, is known for her calculated risks and clever strategies. She always started from the design thinking principle: how do consumers use and interact with the product? What are their needs during this interaction? Which type of market segments are not covered yet?

Indra delved into the customer journey of the Pepsico users. One of the main findings she got, was that the majority didn’t consume any products between 6 and 10 AM. This was a great opportunity that they missed by not having any breakfast related food and beverages. At that time, Pepsico mainly focused on products that are fun for the user: chips and other calorie-rich snacks.

But customer behaviour has changed over time and people were focusing more and more on a healthier lifestyle. So, this was a need that had to be taken into account in their innovation process. How? Fritos was one of the famous snack brands produced under the Frito-Lay name, a subsidiary of Pepsico. It is a chips product, so a less healthy snack, but just for fun. So it was impossible to create Frito bars for a healthy breakfast, people were going to make the wrong association. This was the beginning of several new brands under the wings of Pepsico such as Quaker and Gatorade, which opened new markets for them: breakfast consumers and sport lovers. Indra took the risk to invest in new businesses, but she lowered the risk by having an answer to the question ‘Does it answer to the needs of end-consumers? Yes, it is. (Source: Indra Nooyi – Taking risks)

How to prioritize ideas?

“Just do it”, says Nike.

Yes, totally agree! But before you start running, learn to crawl first:

‘Think big, start small”, says Seth Godin.

So let’s combine: Think big, and just do it by starting small.

A great method to set priorities is to do a derivative of the planning poker, a typical scrum technique for estimating the effort. Have a work session with a multi-disciplinary team and discuss the suggested ideas. Always follow this golden rule: there are no bad ideas. During a good and productive discussion, it’s important to align on the following parameters:

  • Effort: what is the effort to go from idea to realization? Is it feasible?
  • Impact: what is the value of the idea? Does it fulfill a need of an individual, or has it a large scale impact? Does it bring a high value for the end-customer and for the company?

Once you and your colleagues have agreed upon these parameters, the priorities will become more and more clear.

Let’s stay at the Pepsico case to give some examples:

  • Cheetos, one of the most beloved brands, has unleashed a new snack with a more cheesy flavor. Some Cheetos lovers will be happy with this new taste (low impact), so it can be seen as an incremental change.
  • The development of a machine where individuals can combine flavors of different Pepsi products into over 500 different varieties. With the Pepsi Spire being a project in the making for more than 6 months (high effort), universities and retailers can offer a large range of drinks (high impact).

Most definitely, they have many more innovations in the pipeline, but it’s all about choosing the right priorities.

5 tangible tips to take action

  1. Set up a team of innovation rangers who can do innovation experiments during a certain period.
  2. Take the time to work out a complete customer journey of your (future) product portfolio and think in opportunities.
  3. Discuss the needs with a selected group of customers and non-customers: do not focus on your solutions, but on their activities and related challenges.
  4. Use the poker planning method as described above. Discuss the results in group.
  5. Start a small-scale project and test with a limited number of users. Iterate when needed.

Did I inspire you to spend some time on innovation? I will no longer keep you away from your brainstorming time. Let’s wrap up for this three-part blog series:

  1. Build understanding: the first step in your innovation process! Know your strategic risks and understand the market needs.
  2. Shape choices: have a balanced innovation portfolio, from incremental innovation and improvements (retention of customers) to new and disruptive innovation (extension of your target groups).
  3. Decide actions: Think big, and just do it by starting small, said Seth Godin when doing a daily run with his brand-new Nike shoes.