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Reconsidering innovation in the midst of uncertainty

KANSAS CITY — Successful innovation is difficult to achieve even during the best of times. It is made much more difficult in the midst of a global pandemic that has compounded the number of uncontrollable factors that may hinder a product launch.

“Depending on whose statistics you believe, somewhere between 60% to 90% of all innovation in food and beverage fails within two years,” said Jeff Grogg, founder and managing director of JPG Resources, Battle Creek, Mich. “If you’re going to be innovative, you’re going to have some misses.”

These are far from ideal times for innovators. A supply chain crisis precipitated by the pandemic is creating significant headwinds for early-stage brands that lack the scale and resources to compete with established companies.

“Small companies are having trouble sometimes even getting calls with retailers, and it comes down to the retailers are experiencing a lot of smaller brands are struggling to deliver, especially innovation and especially new stuff,” Mr. Grogg said during a presentation at the Winter Fancy Food Show on Feb. 7 in Las Vegas. “They’re managing their own pain and their own struggles, and they want to have full shelves.”

In the face of uncertainty, it may be prudent to pause innovation. Mr. Grogg pointed to Elon Musk, co-founder and chief executive officer of Tesla, Inc. and “the most hyperactive innovator of our time,” who recently announced the car maker won’t introduce new models this year due to a global automotive chip shortage.

“It’s okay to not be pushing innovation right now,” Mr. Grogg said. “Focus on your core if you need to. Focus on cutting your SKUs. Focus on getting lean. Focus on winning where you play.”

Amid complexity, product developers should embrace simplicity “in your process, in your product, and how you get to market,” he said. Now is not the time to launch “some frou-frou way-out-there thing,” he added. Consumer data may offer enticing insights, but it may also be distracting and misleading. A product should meet a clear market need and align with the brand. If it doesn’t, brand managers should move on — and celebrate that decision.

“One of the hardest things to do within an organization is to stop something you’ve invested work into,” Mr. Grogg said. “The concept of sunk capital is very hard for anyone to deal with… At some point, you need to be able to go, ‘This isn’t right. This isn’t going to work.’ … You need to pull the plug, regardless of the work you’ve done so far. There’s no reason to continue to pursue that. You need to reward your team for making the tough call.”

Creating a culture of innovation within an organization requires building trust and openness, rooting out toxicity and fear, inviting diverse perspectives and encouraging input from everyone.

“If innovation only exists in marketing you’re getting a very limited lens,” he said.

In new product development, Mr. Grogg said, “right is better than fast.” Brands often hurl a concept to market to outpace competitors and generate feedback for later iterations. The “minimum viable product” model that originated in the technology industry is not the best approach for food and beverage brands, especially right now, Mr. Grogg said.

“Companies use that as an excuse to launch stuff that isn’t good enough,” he said. “I would encourage you not to do that… It’s got to taste good. It’s got to be something people want, and too often we rush and don’t get good outcomes.”

No two companies are identical, and it’s certain that not every business has the luxury of time businesses like Mr. Musk’s enjoy. Still, many successful entrepreneurs in difficult situations find ways to “slow burn” their way to a more opportune moment. It’s an approach that deserves close consideration in the present environment.