How Do Technology Silos Form in CPG?

May 13, 2016

“In one quarter I was forwarded the same opportunity six times by six different people, even though I killed it off months before”

At a recent conference, I spoke with an external innovation manager from a large CPG company. We discussed “innovation gaps”, blank spaces that exist between scouting teams, R&D, product development, and marketing. She described issues I’ve heard before: technologies being needlessly reevaluated, information vanishing into the spreadsheet ether, and a constant battle with data visibility.

If this sounds familiar, don't fret; every organization suffers from some form of information fog, especially when it comes to product development and innovation research. But how do these barriers form in the first place? How do groups end up reworking the same dead leads and how many real opportunities end up lost in the shuffle?

Using this company as an example, let’s look at the basic problems that many organizations face when managing external scouting and try to understand where things begin to break down.

For this example let’s say we are a consumer goods company with four divisions: Personal Care, Disposable Products, B2B, and Health. Each division has several unique brands grouped by category and each brand category has strategic innovation goals defined by marketing.

If we are like most organizations then there are probably internal R&D teams for each brand category, product development managers for each unique brand, and scouting groups for each division. All of these teams want to create the next $100M product and all of them are tasked with some form of external technology sourcing. After all, it makes sense to have your product managers attend conferences related to their brand, and your R&D scientist should probably talk to the local universities.

 

Understanding where silos form

So what exactly makes an information silo? Companies do not have an issue finding new ideas. In fact, all of the groups described above will be able to source some exciting new technologies. Most silos form when these groups stop working together as a single innovation unit.

There are three main problems that commonly contribute to this problem. These come up again and again amongst innovation teams like the one we have described. Broadly speaking they are:

Structure

Without a defined structure for routing evaluations, teams often don't know how to advance an opportunity outside of their immediate wheelhouse.

Imagine a bench scientist in the healthcare division at our company learns of a novel technology that could be used in disposable napkins. Chances are that scientist will forward an email about this find to a colleague in the correct division, or maybe even contact the scouting group for disposables directly. But then what? What is the evaluation process? Who are the relevant parties that need to be involved, and is there a way to track if anyone ever followed-up? These structure gaps prevent good opportunities from moving forward and create confusion as to who is responsible for vetting potential technologies. There needs to be a clear structure for opportunity evaluation and escalation so that individuals can find and contact the correct SME's at different divisions, locations, or functional groups.

Strategy

Without an information sharing strategy, teams in different areas don't know what to look for.

Now we must ask ourselves, does that same scientist really even understand what the disposables group is looking for, or know which technologies they have already considered? If that napkin technology had already been evaluated a dozen times would they have any way of knowing? These information gaps waste time and clog up the evaluations pipeline, making it impossible to effectively triage every new opportunity. The most innovative companies are often those that are able to quickly and easily identify old opportunities, determine why they were killed off, and move along. In order to do this across a large organization, teams need to have access to historical deal information from each open innovation group.

Shuffle

How does the organization deal with turnover?

Finally, what if that scientist has spent the last five years identifying, evaluating, and monitoring technologies in a specific field? If she were to change roles or leave the company altogether, would that knowledge be passed along? Is there a structure in place for storing old opportunities, notes, evaluations, and any other related info or does it leave the company forever with her? Furthermore, how do you replace the relationships that our scientist had with various colleagues in her field? These knowledge gaps prevent management from ever truly understanding their innovation pipeline and create massive disruptions whenever someone changes roles. In order to maximize the retention of innovation knowledge, groups must be able to track interactions, relationships, notes, and opinions.

CPG SIlos

Defining a process

Defining a process does not mean reorganizing your scouting and innovation activities. In fact, chances are your internal programs do a fine job uncovering emerging technologies. However, removing silos must begin with enabling information movement, tracking innovation activity, and developing long-term analysis plans.

The best scouting and innovation teams are able to simply and easily route evaluations to the correct SME’s. They are able to quickly identify if an opportunity has been evaluated in the past, and they are able to share critical data in a centralized, secure, and easy to use location. For more information on tech scouting systems contact [email protected]

 

Agile Tech Scouting
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