The team at KICR has seen a cultural shift across many of the food and beverage brands we work with, with an increasing appreciation of the value of outsourcing elements of innovation to specialist partners as opposed to trying to keep everything in house.
This is becoming more important as head counts are reduced to manage overheads yet challenging targets for growth remain!
The key is selecting the right partners – those that can challenge and stretch your thinking, bring additional expertise and accelerate your NPD pipeline fuelling it with breakthrough consumer validated products. But importantly embrace innovation in a way that builds on your internal capabilities, expertise and culture to ensure maximum long term success.
When looking to select an innovation partner, we would recommend the following 5 core considerations:
Finding the right external partner that you can trust with your sensitive information. Look for an organisation that has the right credentials and with advocates you can call on to verify their capabilities.
Ensure that you understand the IP rights and have a clear agreement in place before you commence as this can lead to difficulties later on. Think of it as prenup for innovation!
Do you know what you need from a provider? Is it to create the strategy or to accelerate parts of a complex project that need expertise?
It can be a disruptive or even threatening experience for incumbent teams to have external providers coming into the organisation. Do they have the emotional intelligence to navigate the political fallout? What is the ideal balance between outsourcing and collaboration?
Cost vs. Time
Outsourcing should not be viewed as a way to save cost. It could however be reviewed as a way to save time and therefore save on in house resource; innovation is not a quantifiable discipline to the same degree as a call centre or an office catering contract, where the variables are all known and therefore a robust cost can be applied. It's therefore essential that costs of outsourcing are balanced with the risk of not innovating effectively.
Introducing an external NPD partner is not always an easy decision. At KICR we always invest time to build relationships with clients that are looking to outsource all or some of their innovation process (both decision makers and those that will be involved on a day-to-day basis). We carry out deep dive immersion workshop sessions to align with the new client’s brand and ambitions as well as to understand full pipeline view, guardrails and manufacturing competences.
Now that we have discussed some essential factors to consider when selecting innovation partners, we thought we should also cover off the huge benefits to working with an external NPD partner like KICR!
Speed to Market
Every business faces peaks in innovation activity that cannot be met by internal resource. How you manage those peaks is crucial. It is better to delay than to rush and fail, but if you can find a partner who you trust to flex with your business needs then why wouldn't you? This is increasingly a consideration as R&D resource is stretched and headcounts are reduced… yet pressure to get to market fast remains to gain competitive advantage.
Skills and Capability
Certain projects require skills and capabilities that you may not have access to. Access to additional expertise and competences can remove information blockages in projects and at the same time up skill your internal resource.
A partner that can dip in and out, can often be managed more cost effectively vs. investment in a permanent resource (and more sustainable when faced with peaks and troughs in workflow). Any partner worth working with will invest upfront to understand your culture and business needs - this only needs to happen once, so next time they can hit the ground running.
Do not underestimate the power of external challenge, particularly in cultures heavily dominated by one discipline (such as operations). Finding solutions that are internally considered 'off limits' can be raised without risk and a broad range of experience in different industries can be applied bringing fresh perspective. A 'what if' rather than 'what is' outlook here is key! This external perspective can often be a real catalyst for change too – particularly when they have the credibility to bring together marketing, R&D and even operations to challenge the status quo.
Effective commercial innovation is a specialist business skill, so working with specialists is a great way to bring that expertise in at times of resource pressure or scarcity. What makes an orchestra great is the conductor bringing together specialist musicians at the right time to deliver and command performance, allowing you to benefit from wider ecosystems and networks than would otherwise be possible (without investing a lot of time and effort to build).
Within the food world, a continued migration towards external providers as cost management within the industry is likely to increasingly dominate the board room agenda. Where speed to market is a key profit driver for innovation, considered outsourcing can make a significant and positive impact. However, never abdicate your responsibility as a leader of business for what is the most important element of any business’ future strategy.