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FEI25: Aligning Business Success Through Strategic Transformation

KEY QUOTES

  • “This whole shift to consumer centricity means a few different things… every innovation that we put into our innovation pipeline has to have a consumer need or a consumer intention that it’s answering, and that consumer need or intention also has to align with our business strategy.”
  • “There’s no such thing as a boring category. There’s just boring execution.”
  • “Product communication doesn’t happen after the work—it is the work.”
  • “The only edge that your rivals can’t copy is an architected customer journey that compounds value and differentiation across moments.”
  • “Human obsession and understanding the real problem to solve is the only way that you’ll commercialize excellent product and product execution.”

Full Track Summary: Strategy & Transformation

The Strategy & Transformation Track at FEI25 provided a multifaceted exploration of how organizations can effectively align innovation with business strategy to drive sustainable growth. Across multiple sessions, speakers from leading companies like Lagunitas, PepsiCo, and Procter & Gamble, along with innovation experts, shared insights on consumer-centricity, emotional innovation, effective communication, and organizational design.

Delivering on an Integrated Innovation Strategy: A P&G Case Study

Procter & Gamble’s R&D strategy highlights the challenge of managing both sustaining innovation (optimizing current products) and disruptive/discontinuous innovation (new products, business models). Liza Sanchez explained that these require different organizational structures, leadership behaviors, and metrics. P&G allocates 70-80% of resources to sustaining innovation and 20-30% to transformational innovation, emphasizing the need to protect resources for future-focused work. Transformational innovation requires managing uncertainty and embracing experimentation, contrasting with sustaining innovation’s focus on risk management and process. P&G’s consumer-centric approach leverages core competencies across business units to create “irresistible superiority,” testing complete propositions early in the innovation funnel.

Designing Innovation with Human-Centered Approaches and AI

PepsiCo Design’s approach to innovation is deeply human-centered, focusing on defining the right problems to solve, embracing talent, and championing integration. Their methodology employs a “double diamond” approach with four key lenses: feasibility, viability, sustainability, and desirability, ensuring early connection with the broader organization to build trust. PepsiCo is also heavily leveraging AI to enhance design innovation, using tools like ChatGPT and Adobe Firefly for storyboarding, journey mapping, and customer engagement. Examples like the Bear snacks expansion and Wing drone delivery demonstrated how design drives both short-term and long-term innovation by exploring new categories and emerging distribution models.

Activating Emotional Innovation and Redefining Value

Another critical aspect of innovation discussed was the emphasis on “emotional innovation” over technical innovation alone. The speaker, who created successful brands like Method, EOS, Hello, and Happy Coffee, argued that “there’s no such thing as a boring category, just boring execution”. True innovation, he posited, comes from creating products that connect with people’s hearts and are “as endearing as they are enduring”—products people would genuinely miss if they disappeared. This approach shifts the focus from disruption to delighting consumers, with disruption being a byproduct of that delight. The concept of “responsibility” was highlighted as more meaningful than corporate “purpose” or “mission,” exemplified by Happy Coffee’s partnership with NAMI, which included giving NAMI an ownership stake in the company. This perspective encourages brands to focus on people, not just “consumers” or “targets,” and to recognize that “ideals are important and there’s margin in meaning.”

Why Stories, Not Just Science, Should Start in the Lab

The session “Why Stories, Not Just Science, Should Start in the Lab” emphasized that product communication should be developed simultaneously with product innovation, not as an afterthought. Most innovations fail due to poor storytelling rather than poor product quality, as “people don’t buy the best products; they buy the products that they understand the fastest”. The “Who, How, Wow” framework was introduced to help innovators distill complex scientific concepts into compelling, three-second “wow” moments. This framework encourages identifying the target audience and their problem (“Who”), explaining the science simply (“How”), and articulating the transformative result (“Wow”). Early cross-functional collaboration, termed “Wow Workshops,” brings together teams like marketing, R&D, and legal to develop the product story alongside the product itself, ensuring alignment and preventing “phantom work.”

Killing “Me Too” Innovation

To combat “me too” innovation, a four-move strategic framework was presented: developing critical insights, embracing iteration, mapping customer journeys, and enhancing value through experience. Critical insights go beyond surface-level trends and require personal engagement, listening to the right people, building trust, trading quantity for understanding, and including live observation. Iteration is crucial for refining these insights before scaling. Mapping the customer journey—identifying all touchpoints from awareness to repurchase—helps create a competitive advantage that rivals cannot easily copy by enabling unique business decisions and an integrated system. Finally, enhancing value by adding “Experience” alongside Price and Quality transforms transactions into loyalty and enables higher margins.

Navigating Disruption

The “Navigating Disruption” workshop introduced “constrained consumption” as a new economic context shaped by three emerging consumer trends: the Appetite Edit (GLP-1 drugs’ impact beyond food), Money Maxing (economic uncertainty driving value redefinition), and Buycott (values-based shopping). These trends fundamentally alter consumer behaviors, from reduced impulse purchasing to increased financial literacy and values-driven buying decisions. Businesses must pivot from promoting instant gratification to emphasizing purposeful pleasure, delayed gratification, and aligning with consumer values.

Brewing Innovation Through Consumer Centricity and Strategic Patience

Lagunitas has significantly transformed its innovation approach by becoming truly consumer-centric, ensuring every new product addresses a specific consumer need while aligning with their business strategy. The company categorizes innovations into “big bets” (within core beer expertise) and “future bets” (stretch products that may take up to 10 years to fully develop). Both categories undergo rigorous testing, but future bets are given extended time to develop and prove themselves in the market, recognizing that successful brands often require significant time to gain traction. Lagunitas uses its taproom as an initial testing ground, and successful offerings sometimes become commercial products. Despite being owned by Heineken, Lagunitas maintains its distinct brand identity by focusing on quality products and understanding different consumer demand moments, exploring growth areas like non-alcoholic beverages while staying true to their craft brewing roots. Quality is seen as a key differentiator in a crowded market.

KEY TAKEAWAYS

  • Consumer-Centricity is Paramount: Every innovation must address a specific consumer need or intention and align with business strategy, moving beyond chasing trends to truly understanding and meeting consumer desires.
  • Emotional Connection Drives Success: True innovation stems from emotional resonance; products that delight and connect with people’s hearts are more likely to be endearing, enduring, and ultimately successful.
  • Communication is Integral to Innovation: Product communication should be developed alongside the product itself, distilling complex concepts into clear, compelling “three-second wow” moments that ensure rapid consumer understanding and market traction.
  • Strategic Differentiation via Experience & Iteration: To avoid “me too” innovation, companies must develop deep, critical insights, embrace iterative development, map comprehensive customer journeys, and enhance value through unique experiences beyond just price and quality.
  • Dual Innovation Structures are Essential: Organizations must adopt separate but connected structures for sustaining (incremental) and transformational (disruptive) innovation, with distinct cultures, metrics, and leadership behaviors, while deliberately protecting resources for future-focused initiatives.

How This Track Delivers on the Event Focus:
Aligning Innovation with Business Strategy:

The Strategy & Transformation Track at FEI25 directly addressed aligning innovation with business strategy by providing actionable frameworks and real-world examples. Sessions emphasized that effective innovation is not merely about creating new products but ensuring these products meet specific consumer needs while contributing to overarching business goals and growth. Speakers detailed how strategic patience, understanding demand moments, and leveraging core competencies are crucial for commercial viability. The track demonstrated how emotional innovation drives market success and how early product communication aligns R&D with marketing to create commercially viable products. Furthermore, it highlighted the necessity of organizational structures that support both sustaining and transformational innovation, linking R&D strategy to overall business objectives and long-term portfolio management.

How This Session Delivers on the Event Theme:
Harvesting Innovation & Sowing Seeds of Future Growth:

The track embodied the theme of “harvesting innovation and sowing seeds of future growth” by presenting strategies for both extracting immediate value from existing innovations and cultivating new opportunities for the future. Concepts like “big bets” (harvesting core expertise) and “future bets” (sowing seeds for long-term development) illustrated this duality. The emphasis on giving experimental products up to 10 years to develop demonstrated a commitment to nurturing innovation for sustainable growth rather than expecting immediate returns. The sessions showed how harvesting deep customer insights from current conditions can fuel differentiated innovations, while exploring emerging trends like “constrained consumption” and investing in new technologies like AI or drone delivery represent sowing seeds for future market relevance and growth. P&G’s model of allocating resources to both sustaining and transformational innovation further reinforced the importance of balancing immediate returns with long-term growth through deliberate portfolio management.

Action Items for Innovation Experts and Corporate Changemakers:

  1. Implement Consumer-Centric Filters: Create clear criteria for all innovation ideas, requiring them to address specific consumer needs and align with business strategy. Conduct deep, qualitative research and direct observation to gain critical insights beyond surface-level trends or AI-generated data.
  2. Develop a Two-Track Innovation System: Establish separate but connected organizational structures for “big bets” (sustaining, core business extensions) and “future bets” (experimental ventures), with distinct timelines, metrics, leadership behaviors, and protected resources for each.
  3. Integrate Product Communication Early: Conduct “Wow Workshops” early in the innovation process, bringing together cross-functional teams (R&D, marketing, legal) to align on the product story and develop the “Who, How, Wow” communication framework simultaneously with product development.
  4. Prioritize Emotional Design and Experience: Reframe innovation by asking how products make people feel, focusing on creating emotional connections and building enduring brands. Map the entire customer journey to identify and design differentiated experiences that transform transactions into loyalty, expanding the value equation beyond just price and quality.
  5. Embrace Iteration and Test Early: Restructure innovation processes to include multiple rounds of exploration, agile market learning, and agile product testing, allowing insights to evolve and deepen before scaling. Leverage existing assets like company taprooms or pilot programs for real-world testing of complete propositions (technical, commercial, organizational).

Contributor

  • Seth Adler heads up All Things Insights & All Things Innovation. He has spent his career bringing people together around content. He has a dynamic background producing events, podcasts, video, and the written word.

    View all posts
 
 

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The Progress of Innovation

Technology is shaping our society, taking us in new directions and playing a key role in our lives every day. These forces can disrupt, or delight, co…

ideation

Generating Innovation Through Ideation

Ideation is often confused with innovation, along with other related terms regarding the creative process, such as brainstorming or design thinking. W…

talent

Managing Talent to Drive Innovation

With the economy producing mixed signals, and companies often in a state of flux, managing innovation talent has never been a more challenging and imp…

innovation culture

Balancing Innovation with Ambidexterity

Innovators have long been tasked with being a flexible part of an ambidextrous team, as part of an organizational cog that can easily pivot and manage…

business innovation

Growing a Culture for Business Innovation

Whether it entails a large jump or a small step, the innovation pipeline for a business keeps it moving forward through a competitive landscape. Busin…

innovation strategy

Gaining True Value While Moving Forward

The All Things Innovation community came together in this Gathering on Innovation Strategy to drive immediate lessons learned through the first half o…

brand innovation

Embrace Good Friction to Stimulate Growth

The concept of positive brand friction postulates that it can be used to stimulate and maximize growth, improve the customer experience and enhance ma…

data science

Diving Into Humanity-Centric Innovation

With the continued emergence and evolving development of artificial intelligence, there rises a question of how humans and AI can work together more e…

human resources

Tapping Into the Innovation Talent Pipeline

In the last few years, the pandemic and a range of other economic factors have influenced the talent recruitment, development and retention practices…

human resources

Ignite a Culture of Innovation

From the successes to the failures, from the breakthroughs to the breaking points, the innovation community knows all too well that fostering a cultur…

innovation strategy

Innovation During A Downturn

Whether you believe the USA is headed toward or already in a recession, there are signs of a slowing or reversal of economic activity. Of the 15 metri…

ideation

Striving for Successful Innovation

In the quest for innovation, there is often a fine line between success and failure. The road to success is not always clear, easy or convenient. Howe…

product innovation

15 Second Workday

This morning I generated 40 new product ideas with concepts and ad copy to accompany each.  It took 15 seconds. This is just a small fraction of what…

business innovation

Innovation Survey

The All Things Innovation Survey Committee along with FEI have created a Spend & Trends survey to provide you the opportunity to benchmark with your p…

2023 Outlook

Known uncertainty. We enter 2023 with some of the most known uncertainty of our lives. Going into 2019- certainty. Going into 2020- certainty-albeit m…

human resources

Fostering Innovation

When you start to talk that way and lead that way, people do feel more psychologically safe to support change and support innovation that’s happenin…

disruptive innovation

Breakthrough Innovation

While the rest of the industry relies on iterative change, Alex Moyes explains the breakthrough innovation happening at Dominion Energy. “So Dominio…

technology

Innovation Reality

When working remotely, the main challenge is bringing people into an office when they live across the country or around the world. The AES Corporation…

innovation frameworks

Innovation Ecosystems

Innovation is a journey, it’s a continuum of experiences, an act of exploration. The orchestration of ecosystems is more and more important in consi…

innovation culture

Control The Sails

Although the world was affected heavily with change in the last few years, not much in the business world has changed as far as topics and issues go….

innovation talent

Innovation Culture

Innovation starts with the employees of an organization. As we know, the people that work for a business are some of its greatest assets. In today’s…

technology

Interaction Innovation

We are at a time in history of incredible change and technological innovations, such as the rise of machine intelligence, and companies who keep doing…

insights

Measurable Innovation

Each company has their own KPIs that are important to their specific business in place to progress and be successful. Are people at the forefront of i…

innovation talent

Certain Uncertainty

Life is uncertain in every way. It’s always interesting to meet new people and try new things. On the other hand, attackers may sometimes appear out o…

adaptation

Rolling Innovation

If you’ve done it once, you can do it again. Make sure to keep doing it, it’s rolling innovation. Amber Case sits down with us to discuss how impo…

Innovation Spend & Trends Report

The Innovation Spend & Trends Report has just been released onsite at FEI: Front End of Innovation. Be among the first to gain from this benchmarking…

innovation culture

Innovation Intelligence

It seems that innovation is one of the biggest buzzwords in business now. To sustain growth and be competitive in the marketplace, companies in every…

innovation culture

Innovation As Constant Change

The key strategy to a successful business is to know when they are being innovative or are just transforming their status quo according to market tren…

innovation strategy

Innovation versus Transformation

Many people think digital transformation and innovation are one in the same, but according to Hatrick, while they are closely related, there is a diff…