Realities of Transforming Companies to be Innovation Focused – Larry Baab
Article written by and re-posted with permission from Larry Baab- Chief Commercial Officer
In thinking about my experiences in consumer durables and industrial businesses, they all had a common theme…. the CEO, board, and ownership groups wanted the companies to be more innovative. They believed the companies were either too Sales or Operations driven. When asking why, the belief was a more consumer-focused company that increases product innovation will grow the top line and improve profit more effectively.
Who can argue with that?
My experiences are the expectations of such a change need to be well thought out to be effective. Commonly, new folks are recruited to join the Marketing and New Product Development teams who are capable of being strategic, consumer driven, and innovative, but may end up without the necessary support and emphasis from other functions who play critical roles. For example, Sales teams – will they have the necessary sell-in tools created and is there experience to sell-in innovation to key customers? How about the Manufacturing organization? Does this function have the right resources to support the New Product Development team in developing designs that can be manufactured and prioritize the time in developing the new product molds with time to test them? Will Manufacturing embrace the likely shorter run times and inevitably more mold changes occurring during the launch of the new products in the first year? In Purchasing, will they spend the time to work with suppliers to ensure the right ones are in place to support the new products? Will these suppliers have the resources and ownership mindset to prioritize development? Does the Marketing team have the right people and resources to appropriately and effectively market the new products? And, will the Finance partners properly set budgets and anticipate disruptions to manufacturing efficiencies, plus carrying costs of new inventory that might be slower to turn initially?
Great leaders must be practical and set plans that accommodate the realities of making shifts in the business model and culture changes of their companies. Importantly, board and ownership groups should recognize the realities of what it takes for such profound change and be supportive of the executive team during this evolution. Making both culture and business model changes is hard, and leaders must set the proper expectations, communicate them, and understand the realities of how such profound change can stress their employees and potentially impact the financial results of the company negatively in the short term, until enough momentum and success in new product distribution and revenue is achieved.
Key success factors for effective change to be innovation focused
Get the right people on board to help drive the changes quickly
Provide full support to the entire organization to ensure expectations are met
Ensure proper processes and communication are established to support hitting target schedules, costs, and quality levels
Priorities across the entire company must be in place and reinforced regularly
Some competing priorities that may be important may have to be delayed
Be practical with your budgets and short-term financial projections
Communicate innovation is the new heartbeat of the company…. consistently
The entire executive team must be ‘all in’ and supportive in their own functions and across the company.
Baab, Larry. “Realities of Transforming Companies to Be Innovation Focused.” LinkedIn, 20 Feb. 2019, www.linkedin.com/pulse/realities-transforming-companies -innovation-focused-larry-baab/.