Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Remaining Innovative in a Disrupted Ecosystem

323 views

Published on

Blue Canyon Partners Axel Leichum, Partner, and Laura Putnam, Consultant, led an engaging presentation on Remaining Innovative in a Disrupted Ecosystem on May 25th during the Strategic Account Management Association's Annual Conference in Chicago.

Published in: Business
  • Be the first to comment

  • Be the first to like this

Remaining Innovative in a Disrupted Ecosystem

  1. 1. © 2016 Blue Canyon Partners, Inc. SAMA’S ANNUAL CONFERENCE MAY 23-26, 2016 Remaining Innovative in a Disrupted Ecosystem Axel J. Leichum, Partner Laura J. Putnam, Consultant
  2. 2. © 2016 Blue Canyon Partners, Inc. Information/Data Disruption Competitor Disruption End Customer/ Demand Disruption Disruption can come in many forms 2 Channel Disruption Technology Disruption  Roles changing?  Value provided evolving?  New players?  Product innovation?  Tools/roles automated?  Information sharing across customer chain?  Information creating value? How?  Competitor business models shifting?  New competitor threats?  Key needs changing or evolving?  Decision process changing?  Regulatory changes?
  3. 3. © 2016 Blue Canyon Partners, Inc. What kinds of disruption are you currently experiencing with your key accounts? a. Channel b. Technology c. Information/Data d. Competitor e. End customer/demand f. Unknown Poll 3
  4. 4. © 2016 Blue Canyon Partners, Inc. Innovating in a disruptive ecosystem poses both possible risks and rewards 4 Risks Rewards Place the wrong best Misinterpret the trend Upset channel/ customers Distract from core strengths Increase barriers to entry Opportunity for differentiation First mover advantage Increase price, share or decrease costs
  5. 5. © 2016 Blue Canyon Partners, Inc. Case Study #1 – Ingredient Supplier 5
  6. 6. © 2016 Blue Canyon Partners, Inc. Case study background 6 A global ingredients manufacturer needed to develop a more integrated approach to growing its ingredients sales with existing food and beverage CPG customers in the U.S. and Canada, while staying on top of major consumer trends
  7. 7. © 2016 Blue Canyon Partners, Inc. The manufacturer had questions about how to innovate to keep up with industry trends 7 “We’ve identified top trends in the marketplace, and have prepared an inside presentation in each area to show our offering. We also coordinate innovation days.” “The time of greatest change in the industry is now. The process food industry is saying ‘I don’t know what to do.’” “If we were better at marketing-to-marketing relationships with customers, it would help us understand what the consumer is thinking.” “Our current innovation process isn’t good for making product extensions, and we know consumers want their needs addressed tomorrow.”
  8. 8. © 2016 Blue Canyon Partners, Inc. Clean label Unique textures and flavors Non-GMO Three disruptions caused by changes in consumer preferences 8
  9. 9. © 2016 Blue Canyon Partners, Inc. Consumers are looking for simple language to describe the ingredients in their food 9 “In my area, sweet goods, the big trend is clean label. We want insights around this. Sure, it’s a doughnut, but how can you make consumers feel healthier about it? Clean label can help there, but we don’t want to sacrifice texture. What’s most important to the consumer?” (Marketing) Clean label
  10. 10. © 2016 Blue Canyon Partners, Inc. Consumers are looking for simple language to describe the ingredients in their food 10 “The thing that is really big is naturally functional. That trend is all about two things. The first is the health halo that comes from clean label or more natural items. But the second part is that the ingredient needs to be functional and deliver certain benefits. Almond milk is an example of this, even though it’s really just riding the coattails of almonds. Almonds are natural and they’re also perceived as containing protein and being healthy.” (R&D) Clean label
  11. 11. © 2016 Blue Canyon Partners, Inc. Non-GMO food is recognized as a driving trend by specific accounts… 11 “Non-GMO everything is a big impact to our business. We want to be on the forefront. We have a big initiative to make most if not all of our products non-GMO. It’s going to be big now. The difference now is that there are groups out there who are very vocal and have a lot of influence.” (R&D) Non- GMO
  12. 12. © 2016 Blue Canyon Partners, Inc. …while other accounts embrace the trend hesitantly 12 “Everyone is trying to dip their toes into non-GMO. The area has potential but no one knows how much potential, and it’s hard to understand how much of it is consumer driven. We’re so big though, and it would be hard for us to go all non- GMO, so the opportunities are different niches.” (Procurement) Non- GMO
  13. 13. © 2016 Blue Canyon Partners, Inc. …while other accounts embrace the trend hesitantly 13 “Non-GMO is certainly a big trend area, but no one has proven they’re actually bad for you. It’s emerging and we’ll see on that area. It will be niche for us.” (Procurement) Non- GMO
  14. 14. © 2016 Blue Canyon Partners, Inc. Consumers increasingly desire unique textures, flavors and ingredients 14 “Unique flavor combinations, that’s where the growth is. Things like salty and sweet. Or sweet and spicy. Ancient grains are also huge for us, and it’s a challenge to make sure the texture and flavor is right.” (Marketing) Unique textures and flavors
  15. 15. © 2016 Blue Canyon Partners, Inc. Consumers increasingly desire unique textures, flavors and ingredients 15 “For our products in the snack world, any ingredient that we can use to differentiate to create consumer appeal is key. But the next level is all around ingredients that ‘unlock’ something, such as texture or flavor. Can the texture provide a new eating experience, maybe multi-texture? That’s the second biggest thing behind flavor.” (R&D) Unique textures and flavors
  16. 16. © 2016 Blue Canyon Partners, Inc. Disruption summary 16  Supplier needs to be in-sync with customer’s customer  Account-based strategies required to respond to trends Summary Implications for Innovation  Origin of disruption: end customer  Radically different responses to trend by account
  17. 17. © 2016 Blue Canyon Partners, Inc. A deeper look into four key accounts confirms that one-size-fits-all strategies will not work 17 Account A Account C Account B Account D
  18. 18. © 2016 Blue Canyon Partners, Inc. Account D • Large company • Fairly innovative • Small share of wallet Account B • Struggling to innovate • Low-cost/low-end focus “Account A is an incredible innovator that carved out space in the bakery segment – we know gluten-free is going to be a big play with them. They are doing well and growing” “Account B’s business is struggling, they are taking on a low-cost/low-end focus and haven’t been innovative in the past. They try, they come to us every year about innovating, but it never seems to go anywhere.” “Account C has historically struggled, but now they are becoming innovative and starting to pick up more of our core business now.” A deeper look into four key accounts confirms that one-size-fits-all strategies will not work 18 “Account D is a large company that is fairly innovative, but we are just a small player there now.”
  19. 19. © 2016 Blue Canyon Partners, Inc. Account D • Large company • Fairly innovative • Small share of wallet Account B • Struggling to innovate • Low-cost/low-end focus Account A • Innovative • Growing Account C • Historically struggled • Recent improvement A deeper look into four key accounts confirms that one-size-fits-all strategies will not work 19
  20. 20. © 2016 Blue Canyon Partners, Inc. Innovation strategy needs to be account-specific 20 Account A • Innovative • Growing Collaborative product innovation focused on natural ingredients that maintain taste and texture in gluten-free items Offer superior service that is proactive and responsive to keep up with this nimble customerElevate innovation relationship by offering corporate-wide innovation session focused on gluten-free and non-GMO customer insights HIGH PRIORITY ACCOUNT
  21. 21. © 2016 Blue Canyon Partners, Inc. Innovation strategy needs to be account-specific 21 Account B • Struggling to innovate • Low-cost/low-end focus Product innovation focused on maintaining texture, moisture while boosting nutrient content Relationship focus on exec-to-exec relationships to have clear communication about top priorities Improve collaboration in order to drive more project to execution; focus on cadence with more frequent check-ins with R&D LOW PRIORITY ACCOUNT
  22. 22. © 2016 Blue Canyon Partners, Inc. Innovation strategy needs to be account-specific 22 Account C • Historically struggled • Recent improvement Be innovation partner of choice by focusing product innovation on new/high-growth areas (clean label, gluten-free) Grow base product sales by leveraging current relationships and by showing how they can help with cost reduction, not price reduction Broaden reach with R&D by sharing consumer insights research around non-GMO and texture MEDIUM PRIORITY ACCOUNT
  23. 23. © 2016 Blue Canyon Partners, Inc. Innovation strategy needs to be account-specific 23 Account D • Large company • Fairly innovative • Small share of wallet Elevate co-innovation projects to go beyond cost-saving approaches and customize innovation to their key challenges Relationship focus on initiating marketing relationships in order to understand customer’s reactions to key consumer trends Broaden reach within the company to connect across divisions and focus on “mid” executive-level to learn about new opportunities HIGH PRIORITY ACCOUNT
  24. 24. © 2016 Blue Canyon Partners, Inc.  Significant profit improvement  Approval of use of innovative product in the works  Increase in innovative products sold, despite growth slow-down in customer organization  Sales have not improved, but..  Relationships improved across geographical and functional areas  Increased connectivity with CEO  Innovation projects successful  Regained some of the contract business Improvements from 2014 - 2015 24
  25. 25. © 2016 Blue Canyon Partners, Inc. Case study #1 takeaways 25  Disruption can come from several steps down the customer chain  Key accounts were radically different in terms of their interpretation and reaction to disruptive trends and approach to innovation  Improvements to sales and innovation endeavors will not happen overnight  Customized, account-specific strategies are necessary to innovate effectively and profitably during disruption
  26. 26. © 2016 Blue Canyon Partners, Inc. Case Study #2 – Packaging Supplier 26
  27. 27. © 2016 Blue Canyon Partners, Inc. Case study background 27 A North America packaging supplier wanted to develop a strategy to increase penetration of major QSR and Convenience Store accounts, leveraging their innovation capabilities to take advantage of market disruptions
  28. 28. © 2016 Blue Canyon Partners, Inc. Catering/ Delivery Regulatory Changes Rapid Cook Ovens Three key disruptions driven by new technology, regulatory changes, and changing end customer preferences 28
  29. 29. © 2016 Blue Canyon Partners, Inc. Catering/ Delivery 29 “Catering is a huge focus now. It’s a good portion of our business and it has just exploded. For some of the stores, it’s like 25-30% of their business and it is growing at double digit rates. We are also looking to expand our coffee program, and we may expand our breakfast catering.” (Marketing) “We want the catering experience to be as good as possible. We have a big focus on food quality. There are some things that we won’t even cater at this point because we can’t meet the quality standard.” (Supply Chain) Catering/Delivery is a high growth, incremental revenue stream for QSRs, but comes with food quality challenges
  30. 30. © 2016 Blue Canyon Partners, Inc. Rapid cook ovens open up significant menu expansion opportunities, but offer operational challenges 30 “Breakfast sandwich – we are seeing people crack an egg into a paper cup and put it into the oven next to three strips of bacon and an English muffin, turn on the oven, and then assemble them into a sandwich for the customer. We are also seeing people cook frozen soup in a paper bowl. Pastries is another area of opportunity. There is a lot both now and in the future that we can do with the ovens that we couldn’t do before. Now we need to find a packaging solution that works best.” (Sourcing) “Speed of service is huge for us. A lot of what we do is trying to simplify things, so if something can get popped in the oven and not have to be prepared, that’s interesting. Anything that’s going to save labor is interesting.” (Brand Engagement) Rapid Cook Ovens
  31. 31. © 2016 Blue Canyon Partners, Inc. Food outlets must maintain customer experience while meeting new regulations 31 “We use a foam cup today. There are a lot of bans coming in right now from places. However, all of the bans are different. So even within one state the bans can be different within the cities or counties of the state, so we have to use different cups within different territories.” (Marketing) “One of the stumbling points is that our consumers are very attached to our lid, and that’s one of the more intimate parts of the drinking experience. Being able to find a comparable lid is a challenge for us.” (Supply Chain) Regulatory Changes
  32. 32. © 2016 Blue Canyon Partners, Inc. Disruption summary 32  Origin of disruption: technology, customer, regulatory  Suppliers need to be aware of entire ecosystem, look along multiple dimensions for disruption Summary Implications for Innovation  Disruption often generates unmet needs, either directly or indirectly  Disruption is an opportunity for innovation as much as a challenge to innovation
  33. 33. © 2016 Blue Canyon Partners, Inc. How can a supplier set themselves up for success? Know where to go (and where not to) 33 Opportunity Potential Size, Growth & Profitability = size of the TAM Account B High Low Low High • Accounts A and C are significant opportunities, with high innovation priority and openness to collaboration • Accounts D and E are small but fast-growing, with significant openness to collaboration around innovation • Account B is the largest opportunity with strong growth potential, but limited openness to supplier collaboration and lower innovation priority • Account F is the lowest priority due to limited openness to supplier collaboration and low innovation priority Account AAccount D Account E Account F Strategic Fit Innovation Priority, Openness to Supplier Collaboration & Importance of Packaging Account C
  34. 34. © 2016 Blue Canyon Partners, Inc. How can a supplier set themselves up for success? Become the “Innovation Coordinator” 34  Relationships across ecosystem  Ability to shape discussion  Value-added role in information gathering/sharing (and more likely to be “first to know”)  Ensure innovations best positioned for success Packaging Supplier Rapid Cook Oven Manufacturers Ingredient/ Food Suppliers End Customers QSR/ Convenience Stores Coordinated development of end-to-end packaging concept for rapid cook ovens to significantly reduce labor costs while ensuring high levels of food quality
  35. 35. © 2016 Blue Canyon Partners, Inc. How can a supplier set themselves up for success? Have R&D/Product Development resources become part of SAM teams 35  Embed R&D/Product Development resources into strategic account teams  Build more innovation focused account relationships  Facilitate closer collaboration with customer  Supplier innovation teams become deeply knowledgeable of customer needs  Coordinate innovation activity with account strategy Development of best catering packaging solution for fastest growing QSR
  36. 36. © 2016 Blue Canyon Partners, Inc. How can a supplier set themselves up for success? Establish position as key source of innovation 36 Proactive Innovative Concept #1 Proactive Innovative Concept #2 Proactive Innovative Concept #3 Customer Requested Innovation – Supplier Opportunity Disruption TIME  Getting the opportunity to innovate (or getting it first) is often half the battle  Need to establish position as key source of innovation  Proactive innovation must be customized to account needs (not generic solution you are bringing to everyone else) and focused  Longer term investment to be top of the list when disruption occurs and innovation is neededNot called for opportunity to collaborate on cup to meet new regulatory requirements
  37. 37. © 2016 Blue Canyon Partners, Inc. Case study #2 takeaways 37  Disruption can come from multiple angles; need to be aware of the complete ecosystem  Your resources are limited; focus innovation efforts on where they have the greatest potential for a better return  You can establish a strong position by taking on the role of “Innovation Coordinator”  Embedding R&D/Product Development resources into SAM teams has proven to drive greater innovation success  You can’t wait for disruption to happen to show innovation capabilities; you won’t be at the table
  38. 38. © 2016 Blue Canyon Partners, Inc. Diagnose where disruption originates Understand how disruption affects different strategic accounts, what the innovation opportunities are, and decide where to go and not to go Map out the ideal relationship structure for each account, and identify gaps in order to…  Create a strong foundation that can endure (and take advantage of) disruption and does not rely on a single relationship  Establish “hooks” into R&D/Product Development and Marketing to create multiple communication channels for top priorities Customize innovation plans by identifying top priorities in each account Determine if you can play a higher, value-added role as “Innovation Coordinator” Checklist How to Remain Innovative in a Disrupted Ecosystem 38
  39. 39. © 2016 Blue Canyon Partners, Inc. 39  Disrupting the Market: Three Models for Success  How Strategic Are Your Customer Relationships? A Framework for Assessing Your Account Portfolio (Velocity, Vol. 17 Issue 2, 2015)  Is it Time to Rethink Segmentation?  Expensive Decisions: Getting Pricing Right: A Pricing Framework for Large Deals in Complex Markets Resources
  40. 40. © 2016 Blue Canyon Partners, Inc. 40
  41. 41. Laura J. Putnam, Consultant (847) 929-5231 ljp@bluecanyonpartners.com www.bluecanyonpartners.com Speakers logo Axel J. Leichum, Partner (847) 967-0253 ajl@bluecanyonpartners.com www.bluecanyonpartners.com

×