Companies across all industries are trying to embrace agility, from assembling innovation teams who are tasked with thinking differently to intelligently testing new products online, with the goal of becoming the next category disrupter. But, it’s harder than it looks.
Adding to this pressure to think differently, are smaller, sleeker companies that are grabbing growth from larger companies. In the U.S., small brands captured a majority (53%) of the FMCG growth in the last year. The trend is also being seen around the globe. In China, for example, local, niche small brands are growing nearly twice as fast as the overall FMCG markets in the country.
This has led to many marketers asking, “What would a startup do?”
“In an effort to move fast, companies sometimes trade rigor for speed. They focus on coming up with as many solutions to the problem as possible, without truly understanding the problem,” said Chris Fosdick, Partner, The Cambridge Group.
The Cambridge Group suggests that larger companies suffer from loss aversion—the tendency to become too focused on protecting what they have instead of taking risks—when what they should be doing is thinking differently.
To win, companies must embrace agility as both a mindset and a movement by prioritizing a learning culture that encourages autonomy, collaboration and iterative testing and learning.
As more companies embrace a start up mentality, this has led to some misconceptions, especially around new product innovations. A survey of fast-moving consumer goods professionals revealed that larger companies are more likely to agree that agility requires relying on gut instinct. This often results in larger companies hastily making expensive decisions based purely on instinct about product launches without the normal level of rigor.
“More and more companies are embracing the ‘fail fast’ approach—hoping to test a product in a small market or online and then reiterate. The problem is, you run the risk of damaging your relationship with both your retailer and consumer,” said Jenny Frazier, SVP, Innovation.
In the video below, Chris and Jenny discuss some common pitfalls when trying to use agility and innovation to find growth.