Operations of innovation with Schweppes’ Ellie Vince
This is part two of our interview with Ellie Vince, Schweppes head of category leadership (formerly head of innovation). In part one, Vince gave an insight into the company’s approach to innovation in 2015. Here she discusses the operational side of innovation at Schweppes.
This is the first interview in the Innovation Inside series focusing on innovation, by Samuel Tait of innovation consultancy I/O. Innovation is a current buzzword but everyone’s perspective on its definition and how it should be done is different. Innovation Inside interviews aim to go behind the hype to talk realistically with leaders of innovation on what they do and how innovation works within their companies
Samuel Tait: How do you measure the value of innovation at Schweppes?
Ellie Vince: The way we are approaching innovation now is where success is determined a lot by the actual trials and having real metrics that come out of it. In terms of doing a test case – do we understand the real rate of sale of a product and the real volumes you are going to sell? The other determiner of success is an external measure – customer feedback. If you are running a trial and you’re in a Woolworths or Coles or one of the large petrol or convenience customers and a couple of weeks in they are saying that they want this product when you scale up for launch. Generally they know their sales and their shoppers very well.
ST: How do you execute operationally in regards to innovation?
EV: We generate the best results when we work as a cross-functional team the whole way through. I would lead a project team from problem identification through to what the real compelling consumer concept is and understanding how we can make it and whether it will be profitable for the business. Then building a launch plan, we pull together a different group of people that have expertise in actually taking something to market. While we provide continuity all the way through. It ensures we bring in the right functions and the right team in at the right time.
We also work through a different process than standard new product development (NPD) processes. When you are working through a new flavor, NPD might be absolutely the right thing to do. However it is a different process to launch a product that is new to the business or move into a new category that they do not currently compete in. So from an innovation point of view it is about getting the right stimulus and experience involved. If that means speaking to experts that work in other fields or categories then we get people in that might not be part of our R&D team that can give us new ways and thoughts on how to do things. That’s speaking to lots of consumers. Ensuring we understand consumer behavior.
ST: Is there an example where you have brought in external expertise and how they provided value?
EV: We are working on a project at the moment where we’ve brought in lots of external people to help generate new thinking, new ways of doing things and to get different perspectives. So right the way through the project we worked with a consultancy to help us through the process and then spoke to lots of different experts across different industries and got their input across a number of different concepts we were working up just to get their views on how they would tackle it, what they would do differently, what they would think would be successful. Then in terms of manufacturing and actual product development we brought in experts that work in other fields to help supplement some of our internal experience.
ST: What is the role of cross-functional teams within innovation operations at Schweppes?
EV: The way we are working on a current project is that all of these cross functions are within the original project team. So once you have a concept they are all in the room. They all understand, and buy into the idea because they helped create it. They are giving you feedback on design, feedback on ingredients. It might not be their area of expertise but it ensures you have a project team – a group of people that have bought into the idea that can then be ambassadors for that project and support the project as it moves through the business. And then when it actually comes to fruition they feel like they have had a large part in making it a success.
ST: What is the importance of using cross-functional teams as part of your approach to innovation at Schweppes?
EV: Different perspectives. It is essential – we could not work any other way. It’s the knowledge that all of those people bring to the table. It makes sure that as you are working through a process you’re also acknowledging everything that is important to each department. If we didn’t include supply chain we would not be able to make the product, we wouldn’t understand if we could make the product in our internal factories. If we did not have product development then we wouldn’t have a product. Or without legal we wouldn’t have something that was adhering to Australian regulations.
We therefore have people from all functions – sales, finance, legal, supply chain, marketing, and product and packaging development.
ST: How do you bring retailer experience and knowledge into this process?
EV: It’s a joint effort. Obviously the sales guys know their customers better than anyone else. What we have found valuable in the last couple of projects is getting some of the really early concepts in front of retailers to get their feedback. Whether that is going into Coles and sharing some early ideas of the consumer opportunity that we have come across and saying, “This is where we have landed – what do you think?”. They will often raise thoughts that we would not have considered which has been really valuable. The other thing we have done recently is getting a group of retailers together and run a co-creation session where we had four to five different concepts on the table and talking them through each, bringing them to life with the retailers. Getting feedback and getting their ideas on how we could make them better and stronger.
ST: How do you get the most value from these retailer workshops and sessions?
EV: I think it’s getting the right people in the room to collaborate and co-create. We have some pretty strong partners at Schweppes so it is ensuring you are choosing the right people to get in the room. So if it’s retailers we’re working with, it’s not just about wanting their expert knowledge in the industry. How do they take off their ‘retailer hat’ for a minute and give you a broad perspective on where they see the opportunity sitting – how could they make it better. Then putting their ‘retailer hat’ back on them saying, “Actually if that were in my shop, yes it would sell and this is who would buy it”.
Obviously they know on a day-to-day basis, particularly if you are talking to someone working in a shop or a chain of shops, where everyday they are seeing people interact with food and drinks being purchased in their shops. Often the insight that they would have is very different than what we would have as the bottler.
They also see trends. Where we see a broad view on macro trends, they see trends on a day-to-day basis. It’s interesting hearing them talk about people that are switching larger pack sizes to smaller pack sizes and how they have seen that change and transition from a purchasing point of view over the last 12 months or so. For that kind of stuff they are really close to the immediate impact of trends. We see the broad view where they see the day-to-day transactions.
ST: Can you describe the process you use to support the delivery of innovation at Schweppes?
EV: From an operations point of view, a trial is basically scaling up a product for a national launch. It’s almost the same process that you go through. It’s all about starting with a consumer insight to understand what the consumer need is that you are trying to address. We start all of our processes with, “What’s the problem? What’s the consumer problem we are trying to address? What’s the consumer need? What’s the most compelling opportunity to address?”, and then once we feel we have an opportunity then it is working through all the details of, “What is the right pack format? Where can we manufacture? What are the right ingredients? How do we cost that up? Where are we going to sell it?”
We have another process that we work through internally for idea generation. It is a problem solving process that helps get a cross functional group of people together and map out all the different problems you could be solving. It helps articulate what the most important/biggest problem might be. It’s a mix of a couple of different processes we brought together internally. Off the back of that we have developed a way of working internally that develops the best ideas and concepts to actively solve the problems we have identified.
When we actually are in trial in market we have processes in place to report data on a weekly basis so that we were getting enough information back to the team to support decision making about whether there were any other things we wanted to test/change while we were in market – for example price points. It enables us to make decisions really quickly and use that three-month period to test everything we want or need to.
ST: What companies or areas do you think are doing innovation well?
EV: I think some of the online companies that have transformed industries are incredibly innovative. Whether that is REA Group, or Seek and what they have done to recruitment, through to Carsales and selling cars online. I think that as an industry they have transformed things in different areas.
In the same vein Powershop is amazing. An electricity company that have really understood that the problem is that consumers have with electricity – people can’t control the amount of electricity that they consume however they actually just want some more transparency. To get to the heart of that I think has been a great effort.
Lego is another I’ve been reading quite a lot about recently as a really old company that’s been around for a long time and again reinvigorating themselves by looking at how they reach consumers differently. The success they have had with the Lego Movie and the resurgence they have had in their product – they continually make sure they are relevant.
ST: What are three pieces of advice to help other people and businesses innovate?
- Don’t be afraid to try. If something doesn’t work and you fail from it you will learn a lot. It is definitely worth giving something a go. Particularly if intuitively it feels right and obviously all the business case stacks up behind it.
- Consult as many people as possible, whether internally and you make sure that you’re working with different departments along the way. But also the huge amount of value that I have received from speaking with people externally has been great. They might work in a completely different field but I’ve found a huge amount of value from different perspectives. They might not give you a direct idea, but will definitely spark a thought that you had not thought of before. Clever people are clever people. They work in all sorts of industries and can give you new ways of thinking of things and new ideas that you would not have thought of.
- Observe. Getting out and watching the problems that people are having. Whether it’s an occasion based activity or surrounding yourself in that particular circumstance to help understand it a bit better. The insight that can give you into whether it’s packaging or ingredients, or the way you position it or the language you use has been very useful.
If you missed the first part of our interview with Ellie Vince head over and check out part one, insights on innovation, here.