An interesting article in the Wall Street Journal caught my eye recently. On the surface, it doesn’t look like much. But like most things, if we dig deeper and connect some dots, we’ll see a major new trend emerging.
The article, “Campbell Soup Looks Outward For New Products, Ideas,” speaks of the company’s launch of a new company web site that invites innovative product ideas from entrepreneurs, scientists and inventors.
Most CPG companies, including Campbell’s, have mostly relied on their own internal resources to develop new product ideas in the past. But major innovations and breakthroughs have been scarce, likely prompting this new course of action. Campbell spokesman Anthony Sanzio: “We have to be open to the idea that the next big product may come from someone sitting in their home office.”
Right. And that includes rethinking current products that might benefit from improved flavor profiles, better nutritional profiles or new ingredient ideas for the company’s brands; not only the launch of innovative new products.
As quoted in the WSJ article: “In the last decade, the broad consumer product industry has seen a dearth of big innovations, and most new product launches have been so called ‘brand extensions’ or versions of existing brands (products). Only 6% of new consumer packaged goods introduced in 2007 were new brands down from about 17% 10 years ago.”
It’s worth noting that a number of large CPG manufacturers have started turning outward to glean ideas for innovative new products. P&G’s Connect & Develop program has solicited ideas from entrepreneurs and small businesses, for example, and I blogged about this not too long ago.
While the consumer products giant has consulted with outside sources in the past, it’s important to note that “As of mid 2008, more than half of P&G’s new products and technologies came from the outside, up from 15% in 2000.”
While the move to solicit ideas from outside sources isn’t a broadly based social media initiative, I love the idea of consumer product manufacturers collaborating with sources outside of their companies, even as they continue to encourage innovation from within.
I believe that outside perspectives and expertise can only add new ideas and dimensions to the product development process. There is real potential for exciting new products to come to the marketplace, as a result. . . products we might really need and really want to buy. After all, we’re all consumers.
Questions:
* What do you think of this move on the part of Campbell’s and P&G? Do you think it will lead to more ground-breaking new products and innovations?
* What do you think of opening up web sites to entrepreneurs, inventors, scientists and small business owners for ideas?
* Should these companies also add a section on these sites for consumers as well? Why? Why not?
* Would you be willing to add your ideas to such a site if you could?
I’d love to hear from you.
Related posts:
Unless I am a brand evangelist or am deeply disapointed with a particular brand, I don’t see how it’s in my best interest to share my ideas and IP with a company for zero compensation. Companies like this may be better off listening to online conversations to glean nuggets of valuable information, rather than letting the information come to them…
Thanks for sharing your insights, Thomas. Question: what’s the difference as far as who shares ideas? Whether experts weigh in or consumers via social media, the net result is the same, isn’t it? Also: I’m not sure that Campbell’s wouldn’t pay an entrepreneur or scientist for their ideas. Experts might negotiate with a CPG company or even work on projects with them as outside consultants for a fee. Wouldn’t it be interesting to see how this works from the inside?
Actually, this is a developing trend, and I blogged about this a few months ago. Check it out at
http://www.mpdailyfix.com/2008/11/cashing_in_on_small_company_id.html
Let me know what you think of this if you’ve got a minute, Thomas.
Ted: problems everywhere with this argument.
1. Cultural problems! Risk aversion, lack of innovation, lack of customer insight or an inability to let smart people do their jobs without group-think watering everything down – it’s probably one of these.
2. Reward problems. If new product development can’t create new products, you’ve got either an incentive problem or a people problem.
3. Legal. If I come to you and give you an idea that makes you $100m, I want a piece of that. Does Campbells agree? Who owns what the customer submits? Is everyone on the same page here?
Points 1 and 2 need to be solved regardless of what you think of consumer generated content. But think of the impact that a Campbell’s could have in the market if they offered a licensing deal to anything they launched. “Give us your best and we’ll cut you in on the deal.”
That would be fun. I won’t hold my breath.
Regards.
Love it when a smart, reasoning marketer plays devil’s advocate. Thanks, Stephen, for doing just that. Here’s my view: innovation and great ideas always come from a wide variety of sources. Companies’ own innovators generally work with outside design consultancies, and innovative ideas are collaborative. This is nothing new.
Culturally speaking, companies are going toward a model that invites more and more outside communication and ideas. What about Dell’s Idea Storm site? Same principle, really. . .
Campbell’s decision to solicit outside ideas does not mean its own R&D people aren’t working on new product ideas. It does mean they’re now opening themselves up to more ideas from “experts”. At the end of the day, we’re all consumers, right? We all have ideas. Not every idea is worthy of consideration–whether it comes from the inside or the outside. . .The legal issue is more the central one in my mind. As I stated in my response to Thomas, I suspect that any great idea that comes to the market from an outside source, must be fiscally rewarded. Then there is the issue of intellectual property. If you take a look at the link to my last post on this topic, many companies are already taking the route Campbell’s has just announced, and many of these issues are being sorted out to prevent problems.
Thanks, Stephen, for adding more weight and strong arguments to my post. I appreciate it.
Ted,
nothing new under the sun! For a decade Professor Von Hippel et al (you can all download his book “Democratizing Innovation” out of his own personal website) has been doing very insightful empirical research on lead user innovation in a number of industries not to account for Professor Chesbrough’s 2003 “Open Innovation” all relate to what the Wall Street Journal accounts for. Anybody interested in the subject I recommend “hearing it from the horses mouth” and reading the books and articles that have given birth to these “innovative approaches”.
Thanks, John for the input. Much appreciated. Very few things are new under the sun, as the old saying goes. . .yet it’s time for businesses to assess things in this downturn and change their M.O. if it leads to true innovation, better products and services, isn’t it? Sometimes ideas are presented and the market isn’t ready to consider them yet as is the case with the writings you cited. It seems that companies are more likely to embrace these ideas a decade later. . .
I recently came across your blog and have been reading along. I thought I would leave my first comment. I don’t know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.
Ruth
http://laptopmessengerbag.info
People who come up with ideas a lot of times do not realize the value of them or do not have the means to take them to fruition, for such people, recognition is a big enough reward.
Thanks for the kind words, Ruth. Please feel free to chime in any time you wish. Everybody’s POV is welcome and equally valued.
Nirmal: thanks for adding your insight. Recognition is important to us when we come up with good ideas. Sometimes an idea that may not have apparent value overall can lead to another, better idea. Sometimes part of someone’s idea can be a springboard for a better one, as well. Rather than disparage ideas, we ought to consider that before dismissing them out of hand. Thanks, Ruth and Nirmal. I appreciate your comments.
Not quite sure how I got to this blog. One of those ADD internet moments …
Starbucks created something similiar as have a number of other companies, so I think P&G are not really innovating.
Are these outside-in approaches really looking for innovation or are they more concerned with appearing to open up a conversation with consumers to garner more advocacy. I am rather cynical about these approaches
No matter how you found this blog, we’re glad to have you join the conversation, Norman. You’re right: a number of manufacturers have started using this approach, P&G and Dell among them. I think more and more CPG companies are doing this, or considering it now. I do believe manufacturers that take this tack are truly looking for innovative ideas. Even if they don’t use any/many of them, the conversation they initiate is important. Anything that enables consumers, creatives and companies to interact more closely should lead to better products and services all around, in my view.
Thanks for weighing in, Norman. All POVs are welcome.
I think it’s great that companies are looking to consumers for ideas. But the underlying presumption is that they need to always be developing new or improved products.
I’ve often been frustrated by companies that don’t leave well enough alone. Many times I’ve seen some of my favorite products disappear from the market because the manufacturers “improved” or replaced them. Once I find a product I like, I don’t want to have to switch to something else.
I wish companies would take that into account as well as solicit new ideas.
I know what you mean, Peter. At times we’re all frustrated when a favorite product is discontinued, or “improved” in a way that we don’t enjoy using it anymore. However, I’d like to comment on your statement: “But the underlying presumption is that they need to always be developing new or improved products.” The fact is that without innovation or a new product pipeline, companies can’t grow. Once sales are maxed out on existing products, there isn’t any room for additional growth. Hence the primary reason for the tweaks. Having said that, CPG companies’ strongest selling products ought to be tweaked sparingly, if at all. Does everybody remember when Coke launched New Coke to replace its classic cola? It was a disaster that was rectified by making sure the original Coke was renamed “Coke Classic” with full distribution. Consumers have the power to voice their opinions as never before, Peter. I urge you to do so when you don’t like what’s being done to products you currently like and use. Smart companies heed the voice of the customer.
Thanks for weighing in with some important insights, Peter. I appreciate it.