How to Improve the Innovation Pipeline and Process

By: Michael Phillips

Can an organization dramatically improve the quality, speed, and profitability of their new product projects while driving down the risk of failure? Absolutely! Organizations that rely on new products, technologies, and platforms to create customer value, grow market share, enter new markets, increase their profitability, and even alter market and competitive landscapes. In this article Chester Baker, Head of Global Innovation for Abbott Nutrition shares the winning formula for driving innovation in his company.

Product innovation is a critical enabler in a global competitive marketplace. Therefore, the ability to prioritize and focus on the right development projects is at the very heart of a successful product innovation program. But Product Innovation is not an easy task.

In a recent interview with Chester Baker, Head of Global Innovation for Abbott Nutrition, I had the opportunity to learn from Chet as he discussed Abbott Nutrition’s innovation strengths, and the winning formula for driving innovation within their company. Chet leads a global team responsible for early stage insights discovery, new product development, and innovation growth strategies.

For more than 85 years, Abbott Nutrition has been behind some of the world’s most trusted and recognized brands in pediatric, adult and performance nutrition products. In 2010, the company identified gaps in its innovation process that, if filled, could further drive product and packaging innovation. Following a comprehensive assessment, Abbott Nutrition modified its global product innovation system and put a stronger emphasis on how ideas are recognized, developed, evaluated and transformed into products. As a result, Abbott was able to:

• Formulate a new product innovation and technology strategy
• Customize the process using Stage-Gate which enabled the new strategy
• Implement governance and innovation management best practices

MP: Please tell us a little about your R&D organization.

CB: For more than 85 years, Abbott Nutrition scientists have set the standard for science-based nutrition, trailblazing the development of innovative nutritional products and packaging solutions to support the growth, health and wellness of people around the world.

Abbott Nutrition research and development efforts focus on solutions for every life stage – from ensuring babies have a strong start to addressing the unique dietary needs of patients with serious illnesses. Powered by a proven science business model and a commitment to science-based nutrition, Abbott Nutrition R&D teams keep the development pipeline filled with products that allow us to deliver nutrition science that matters.

Abbott Nutrition employs more than 700 scientists, clinicians and engineers in the United States, Europe and Asia. The staff has a broad range of scientific and clinical expertise, including nutrition, pediatrics, gastroenterology, immunology, food science, chemistry, biology, medicine, and engineering.

MP: Please tell us a little about your innovation organization.

CB: Our Global Innovation Office (GIO) is responsible for leading the global innovation process from early-stage insights and ideation through commercial launch. There are two primary groups in the GIO. The i2i team, embedded in markets around the globe, is responsible for market, consumer and environmental insights that can potentially become breakthrough innovations, while the PPMO focuses on execution, driving projects after they have entered the Stage-Gate^® process, and handing them off to the commercial team for launch.

Our efforts in innovation focus on six global platforms grounded in key healthcare and healthy living needs: metabolism, immunity, inflammation, cognition, tolerance and lean body mass.

MP: Where is your group located?

CB: The GIO team is headquartered near Chicago, IL, with key offices in Columbus, Ohio; UK; Singapore; China; and India to meet the varying needs of the global population.

MP: Why is innovation important to Abbott Nutrition?

CB: The way we innovate is critical to our global success in a demanding and competitive business environment. Innovation is the lifeblood of our business. It is currently driving a significant percentage our incremental revenue, and that is expected to grow over the next three years.

MP: What is your most important strength when it comes to innovation?

CB: At Abbott Nutrition, our most important strength is that we have built global strategy, insights, infrastructure, and processes that are transforming innovation into a competitive advantage for Abbott Nutrition. By enabling more breakthrough innovations and the ability to get them to our customers faster, we are generating greater market share gains, increased revenues and develop pricing power ahead of our competition.

MP: What is a winning formula for driving innovation in your company?

CB: Our winning formula is simple:

• Consumer insights key to driving relevant innovation
• Disciplined process driven through Stage-Gate architecture with a highly effective governance model including decision rights and prioritization
• Broad range of scientific and clinical expertise, including nutrition, pediatrics, biochemistry, chemistry, clinical research, food, flavor and packaging and processing
• Strong resources and complementary external partnerships that align with our business goals and expand our core capabilities

MP: What is Abbott Nutrition’s biggest innovation challenge?

CB: Our biggest innovation challenge is maintaining the right balance between our biggest innovations and necessary, shorter-term brand maintenance and improvement projects.

MP: What is your favorite new product?

CB: Ensure Muscle Health with HMB, which is targeted nutrition to help rebuild muscle and strength lost naturally over time, because I think it defines who we are as a science-based, clinically proven nutrition company utilizing relevant consumer insights to develop new products.

MP: Looking into your crystal ball what do you think will be the greatest challenges facing innovators 10 years down the road?

CB: While the same holds true today, I think ten years down the road the greatest innovation challenges will be about remaining relevant and differentiated, and doing it faster and better than our competitors.

Chester Baker will also be delivering a case presentation at Stage-Gate Innovation Summit 2013, highlighting the journey Abbott Nutrition took to make innovation a driving force within their company.

Six steps to consider for a successful product innovation program

Companies, like Abbott Nutrition, rely on new products, technologies, and platforms to advance their business strategies in a variety of ways, and a Product Innovation and Technology Strategy forms the essential link between an organization’s development efforts and their business strategy. Developing an innovation strategy and the power to propel product innovation results to the next performance level lies in 6 practical steps. Have you considered the following in your organization?

1. Objectives and Role – does your company have clearly defined objectives and roles around your new product innovation efforts.
2. Arenas and Strategic Thrust – as a company do you know which areas you want to focus and play in – i.e. the markets, industry sectors, applications, product types, or technologies on which your business will focus its new product efforts.
3. Attack Strategy and Entry Strategy – as a company is you strategy to be a “fast follower”, waiting and watching, a differentiator or do you plan on a regional strategic approach to product development?
4. Deployment – Spending Commitments, Priorities and Strategic Buckets. – ‘Strategy becomes real when you start spending money!’ As a company make sure you are clear on how and where you want to spend resources on in order to ensure the strategic alignment of product innovation with your overall business goals.
5. The Strategic Product Roadmap – Does your company have a strategy that maps out your planned major new product initiatives (and their timing) that are required in order to succeed in a certain market or sector?
6. Tactical Portfolio Management Decisions – new product development can be a risky for many companies – while initial attractiveness seems positive it can improve or deteriorate as new information becomes available.  Make sure that your company is prepared to make though GO/Kill decisions throughout a project’s journey and be able to reallocate resources.

By Michael Phillips