“We focus on figuring out where the opportunity spaces are and how we can make the biggest difference. I think what we’re starting to understanding is that yes there are lots of places where we can play but are we clear on where can we win?”
PART 2 – Operations of Innovation
INTERVIEW with Kerry Sephton
Samuel Tait for I/O
Find out how you use innovation to drive entire category growth in part 2 of our interview with Kerry Sephton of George Weston Foods (GWF). Our discussion covers the operations of innovation and discuss how GWF use research to find insights for innovation, how the use business cases, the value of focus in execution and some of her advice for successful programs.
Samuel Tait: As Group Innovation Manager at GWF, where does your innovation team sit within the overall GWF organisation?
Kerry Sephton: I report to the Marketing Director, Graeme Cutler. He reports to the Managing Director so It’s a pretty flat structure, which is great. It gives my team great visibility at senior levels, and means that we’ve got really good alignment with the senior leadership of the business. There are pros and cons to being within the marketing function. Personally on the whole I feel we benefit more than we don’t, but we certainly need to work very hard on our alliances with operational teams to make sure that we can execute what we develop.
I have three direct reports, a head of product development, a project manager and a nutritionist. A diverse in terms of their skill sets which is good. Then under product development we’ve got a team of product developers
The guys in our product development team have a range of expertise primarily from a baking background, but also some pastry chefs and packaging technology. Some of the guys have come from operational roles and know the business very well. Their skillset and experience helps us to execute with excellence, ensuring we can manufacture what we develop on a national basis across multiple sites. We’re work with products that are affected by climate and so we need to make sure that the product that we make in far north Queensland is the same product that we make in Adelaide, and there are challenges to that. To a certain degree it’s the role of my team not only to make sure we’ve adapted something that is a solution that can be manufactured in each of those sites, but also to work really closely with the operators at each bakery so they understand what we’re trying to achieve and can take into account those variances in delivering the best quality to consumers.
ST: How important is the involvement and buy-in from senior leadership to the success of innovation programs?
KS: Critical. Again it comes back to the role and expectations are of innovation. If my role was to just deliver close in new products or line extensions then we probably could do that without much buy in from with the senior leadership team. If what we’re trying to do is change the way the category operates and drive growth of the total category – not just our business by impacting consumer behaviour, then that’s likely to need investment We need buy-in not only to the investment but also alignment that innovation comes with some degree of risk and we need to be prepared to take some risks on occasions.
ST: Having come from an insights / research background what type of research do you use to develop your insights?
KS: Ethnographic approaches are a methodology that we love. There are lots of things that consumers, don’t think about or don’t know how to explain because it’s so subconscious in the way that they make choices. There’s actually a real trick to developing insights around consumer motivations and drivers- specifically uncovering those intuitive relationships that people have with the choices that they make. You don’t always get that from focus groups.
For example we go to consumers’ homes and we look at how they interact with bread as it comes out of the bread bin. They open the pack, they take off the bread tag, open it, move the crust out of the way. Take the slices they want, put the crust back. I think, “Why do you put the crust back?” Their response is “It protects the bread.” Everybody does it. Nobody understands it, they really don’t think about it and they probably wouldn’t explain it to you if you had sat them in a focus group. Actually when you talk to consumers at focus groups they would say, “Oh yeah the crust is a bit of waste. That’s the bit that nobody wants.” But actually for the consumer it plays a really important role in protecting the bread even if that is more perception than reality
For us we start thinking about what does that tell me about the way consumers are feeling about the product. Why is that the way they’re interacting with the product? All the other cues about getting bread out of the bag, it’s smell etc. How can we use that knowledge to build something that’s new, better, and different, and maybe solve a problem that consumers don’t think about – that bread has got a fragility about it. How can we create a product that solves the fragility of bread?
ST: When you find an idea you wish to implement is there a business case you have to get approved internally?
KS: Yes the business case happens fairly early on. we identify what the project is about and what the opportunity is but we develop a product solution, and that’s the point where things go into our stage gate process. Obviously the level of involvement at senior levels depends on the complexity of the project
We have a steering team that governs the process of which I’m one of the gate-keepers. That’s where the alignment piece is important because it is a cross-functional steering team including insights and category colleagues. That also helps ground us in the reality of selling a product into retailers at some point.
Bigger more significant projects are elevated to the senior leadership team particularly when we talk about investment in capability. We’re very fortunate where the business is at right now that we are looking to invest in new capabilities for growth.
ST: There seems to be a lot of ideas, how do you focus and decide on projects to take forward?
KS: We focus on figuring out where the opportunity spaces are and how we can make the biggest difference. I think what we’re starting to understanding is that yes there are lots of places where we can play but are we clear on where can we win? It’s tricky, particularly on the early stages of the project. There’s a project that’s live at the moment where we’ve identified eating occasions where bread is pretty low down on the food choices being made. We’ve identified that some of the characteristics that a bakery offer could deliver could satisfy consumer needs better than their current choices They’re doing work arounds, making do with things that are there suggesting that there is an opportunity to provide a better solution.
That’s not to say that we can pull something out the draw that’s automatically going to do that job, But it’s about asking; “What would need to be true for that to be successful? What behavior change are we looking for? How many people would we need to convert from doing this to doing that, and how big is that space?” It still doesn’t tell you whether we can deliver that solution but it gives you a better sense of the opportunity. Our job is to then validate whether we progress this any further, is it worth us trying to find a solution? In this case we think it is. Then looking at what we’ve learnt about the needs, and the occasions and the kind of characteristics required we set about designing a solution to meet those needs
We start engaging with suppliers, and looking at technology. We look at other products (often outside of our category) that may be delivering something with similar characteristics. Then we might start by asking questions about how might we engineer a solution. How might we make that if we wanted to try and do that with a bakery offer. What are the challenges we would face?
After design we consider commercial viability, are these people we are after going to buy it?’ Are they prepared to pay more for it?
We certainly don’t have the answers as yet, so might explore using a test market or evaluate prototypes to understand how to move forward. Also having data helps us to get the retailer onboard with the opportunity.
ST: What is your viewpoint on failure as part of the innovation process?
KS: I think what is important is knowing that some things will fail. And when it happens work out how you learn from that to do better next time round. Often there’s more value in learning from failure than there is from success. It is too easy to move on to the next thing without really understanding what it was that didn’t work. It might not necessarily be that you do that idea again, but was there something in the process that that next time should be different. Were there clues early on in the project that might have made the difference about choosing to do it or not?
ST: What are some of the critical elements to the successful execution of innovation at GWF?
KS: Persistence, optimism, collaboration are probably the three key. For me you have to be able to look at a problem and see an opportunity. I don’t think everybody intuitively can do that.
Also being very disciplined. I think where a lot of projects fail, particularly in market, is because you’ve started off with a set of assumptions and insights, and consumer understanding and then they may have been lost along the way. You’ve made decisions probably for operational or commercial reasons that made absolute sense at the time, but they didn’t necessarily link right back to what were we trying to achieve in the first place, ensuring that we solved the problem were we trying to solve for the consumer? if you get something in front of the consumer and they don’t clearly identify it as the solution it doesn’t quite hit the mark. It might still sell okay but it doesn’t do what you intended. I think having the discipline to say, “I can see why we’re having to make these choices, but we understand that we’re taking a step away from what it was we were intending to do. Are we sure that is the right thing to do?” If we can’t execute the idea the way that we need to, then maybe we shouldn’t do it at all.
ST: What 3 companies do you most admire for their approach to innovation?
KS: The first one that comes to mind is Disney. I’ve always been a big fan of Disney as a brand. I think for me what I admire about that business is their real clarity of purpose – they know what they’re about. Which means that when they go into different formats, different channels, entirely different categories, what you experience is the Disney experience because they’ve got a really clear perspective of what that is. It’s not going to be the way that everybody innovates but I think it works really well for them.
Facebook is another one that comes to mind. That space is so fast moving and the pace of change is so fast that they could think that they would never be able to keep up but they continue to evolve at pace anticipating the evolution of the market place.
In the food space there is the Chobani brand of yogurts out of the US. They are doing some really interesting things. I think they’ve tapped into two trends that you wouldn’t necessarily think work in harmony together. They deliver indulgence from a health perspective. They have created a winner. What they’re not doing is looking at everybody else in their category and offering their product the same way(putting yogurt in the typical category packaging). They really diversify in flavors, and in packaging. They’re changing preconceptions of what yogurt is about and how it fits in a person’s life. They’ve made yogurt desirable.
—END Part 2 – Operations of Innovation—
In part one, Kerry gave an overview of her experience, the role of innovation for GWF, how they use external viewpoints, the role of the customer in innovation and some of the trends impacting the bakery industry in Australia.
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