Editor’s Note: It is no secret that client companies feel the need to speed up their innovation process. Given the speed with which small, nimble local competitors can move, the multinationals are pressed to move even faster. This means that innovation processes developed over time that have been “institutionalized” and fixed, need to evolve quickly. This is never comfortable or easy. In this really important article, Cassandra McNeil discusses how her company partnered with Nestle to develop a fast, agile innovation process, and what drove its great success.
As the world of consumerism has changed, it’s created a number of challenges for consumer packaged goods (CPG) companies when pursuing product innovation.
Today, CPG companies have to operate with far more agility — i.e., move faster — to get viable ideas into the market ahead of the competition. Instead of taking years to develop, test, and launch a new product, companies now have months.
This truncated product innovation cycle means companies have to be open to shedding some of the tried-and-true market research and product development methodologies they’ve traditionally relied upon in the past. By taking an agile approach to product innovation instead, CPG companies can move at the speed required to not only keep up with shifts in consumerism but to introduce the best version of the product into the market faster.
When CPG giant Nestlé decided to create and test a new frozen food concept, they implemented an agile, sprint-based approach to market research for the first time. And here’s what happened.
Today’s Product Innovation Reality
Like other large CPG companies, Nestlé was trying to adapt to the changes in consumerism. Factors that used to be advantageous for them weren’t any longer:
- Company size. Large companies in the past could hold up an ingrained and rigorous innovation process as a plus. But today, “ingrained” and “rigorous” are synonymous with “slow” and “unwieldy,” which can turn a company’s size into a hindrance.
- Predictable purchase paths. No longer confined to purchasing at traditional CPG retailers, consumers have much more choice these days by easily purchasing goods through Amazon and other online retailers, and direct-to-consumer brands as well.
- In-store experiences. The in-store experience used to bring a wealth of consumer insight. But e-commerce brands have leveled the playing field by directly affecting the consumer experience and influencing how they shop and think about brands.
- Brand loyalty. Consumers are much more fickle and focused on their own needs these days. Contrary to the old standards of brand loyalty, consumers today align with brands that can immediately and consistently meet their expectations.
Nestle recognized that successful product innovation was more important than ever if they were to keep up with the new demands of consumerism and that the launch of any new product had to be impactful.
Nestle’s New Agile Approach to Product Innovation
What changed was deciding to cut some of the processes out of the process. When it was time to create and test a new frozen food concept, the Nestlé team came up with these objectives:
- Recognize and kill bad ideas faster
- Achieve faster time to market
- Collaborate efficiently
- Strongly integrate cross-functional teams
- Bring in the right support at the right time
With a new, faster timeline for product innovation, Nestlé didn’t have as much time for the rigor of conventional market research, but they could still find a way to keep the consumer at the heart of everything they were doing. For Nestlé, the agile process meant:
- A good balance of speed and depth of information
- The ability to iterate more quickly
- Flexibility in how the team got to answers
- Empowerment to make decisions and feel good about the decisions they were making
Nestlé decided to use sprints to embark on their agile market research initiative. The core sprint team was comprised of a project manager who was initially a marketing person, along with members from the consumer insights, sales, culinary, and finance departments. The core team was focused on one idea, taking full ownership of it throughout the process.
The project manager broke up the timeline into one- to two-week, task- or goal-specific mini-sprints during which the core team would engage the appropriate cross-functional team (such as regulatory, graphic design, etc.) as needed. Nestlé’s approach to sprints enabled a few critical factors. Members of cross-functional teams:
- Were assured that their specific skills could be used on the project
- Could engage with more projects since they didn’t have to be involved with each one start to finish
- Were allowed to say “no” to, or put off, other projects so they could apply greater focus to the task at hand and innovate faster
The first sprint kicked off in September 2018 and the final product launched in May 2019 with in-market testing. Historically, if Nestlé was lucky, they would have been able to launch the product in 2020 or 2021 using their traditional product innovation processes. But the agile methodology they used this time around resulted in a significantly shorter timeline—around seven months.
What Nestlé Learned and Continues to Learn
The idea for sprinting originally came from Nestlé’s senior leadership, who had embraced the idea and subsequently “put their money where their mouths were” by allowing sprinters to say no to other projects and truly focus on the task at hand. Without that high level of organizational support, it’s unlikely the Nestlé team would have had the success they did in adopting an agile approach to product innovation.
Here are some of the team’s other key takeaways from the agile process:
- Empowering the core team to make decisions and reject ideas that weren’t right for the project—without pushback—kept the whole process moving forward quickly.
- Keeping the consumer at the center of the process resulted in a better product to bring to market.
- Enlisting the help of the right people at the right time helped drive both speed and efficiency.
- Finding an agile market research partner that supported their process, and understood their business objective and the context in which the initiative was happening, instilled the quality that Nestlé was looking for at every step.
To learn more about how Nestlé incorporated agile principles into product innovation, watch the full webinar.