How Do Technology Silos Form in CPG?

February 04, 2019

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

If this sounds familiar, don’t worry. Every organization suffers from some form of information fog, especially when it comes to product development and innovation research. Innovation gaps, the blank spaces that exist between scouting teams, R&D, product development, and marketing, tend to cause similar issues across organizations: needless re-evaluation of the same technology, data loss through multiple versions of the same spreadsheet being distributed across teams, and a persistent struggle with gaining clarity into group data.

But how do these barriers form in the first place? How do groups end up reworking the same dead leads and how many viable innovations up lost in the shuffle?

The CPG space, in particular, has difficulty with silos, simply based on the structure found within most CPG companies. Generally speaking, consumer goods companies are broken down by division, with each division having several unique brands grouped by category, with each brand category having specific innovation goals defined by marketing. Furthermore, each group generally has its own R&D team for each brand category, individual product managers for each brand, and a scouting group for each division. More importantly, individuals teams within the brands generally have their own scouting tasks: product managers attend conferences while R&D scientists build relationships with local academics and other external partners.


Understanding where silos form

Given these structures, how do information silos form? Simply put, innovation teams lack a centralized means of managing data flows across all of its divisions, brands, and individual teams. With the communication and reporting structures highly focused on each specific division, teams have little visibility into the activities of their peers. Rather than working as a cohesive unit, the fractional structure of CPG innovation teams means they largely work as individual islands disconnected from the work of other divisions.

Problems in innovation in CPG companies rarely has anything to do with finding new ideas; brands are typically inundated with potential new technologies and typically have a reliable process for sourcing new opportunities. Rather, innovation teams struggle with what happens next.

While problems can be specific depending on the organization in question, they can be broadly summarized in three areas: structure, strategy, and retention.


Without a defined process for managing new opportunities, routing evaluations, test pilots and more, teams can’t advance an opportunity beyond their immediate charter.

Imagine a bench scientist in one division learning of a new technology that could be beneficial to the work being done in another group. If the scientist informally knows of the work in another division, they might forward an email with the opportunity to their friend in the division, or even directly ping the scouting group.

But then what?

Without a formal process, or ability to track an opportunity, it will inevitably be lost in the milieu of spreadsheets, emails, and informal conversations. No one individual feels responsible to track, report, or follow up on the opportunity, meaning it can be easily lost without a single formal record of its existence.

These structural gaps prevent good opportunities from moving forward and create confusion as to who is responsible for vetting potential technologies. More importantly, other groups will have no idea that the opportunity existed, meaning that if it has a use case the initial evaluation glossed over, the opportunity would have been wasted and a promising technology would have been lost. Innovation requires a clear and reportable structure that allows opportunities to be systematically tracked, evaluated, and escalated so that every group is aware of every opportunity.


Without a structure for sharing information, teams in different areas don’t know what to look for.

At a basic level, groups can’t operate cross-functionally if they aren’t aware of the work done by other groups. One researcher that spots a promising technology for another group would have no way of knowing whether its a good fit, or if the opportunity has been evaluated multiple times by multiple groups. These information gaps cause organization blindness, as teams are unable to effectively triage opportunities or deputize their members as scouts for brands within other divisions.

To stay innovative, teams need to be able to quickly and easily identify old opportunities across the entire organization, identify what led to their failure, and move along. In order to do this on a company-wide level, teams need a centralized system of record that serves as the single source of truth for innovation.


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.


How does the organization retain knowledge?

To be successful, teams need the ability to retain knowledge and transfer it widely throughout the organizations. Data and relationships kept solely between individuals aren’t worth anything to the organization, as they are entirely lost during employee turnover. Without a centralized repository for organizational knowledge and management is unable to truly understand the innovation pipeline and identify disruptive opportunities as the technology landscape shifts. As organizational developments depend on the storage and transmission of institutional knowledge, the inability to do so means that innovation efforts have to start from scratch every time a team turns over or a new innovation is identified.

Building Processes for Success

Creating formal processes and structures does not mean you need to reorganize your scouting or innovation team. In fact, chances are your innovation program is already able to successfully uncover emerging technologies. To succeed, these already successful processes need to be formalized and establish clear steps for evaluating, testing, and implementing new opportunities.

The most effective scouting and innovation teams are able to quickly and easily route opportunities and communicate their activities across the entire organization. More importantly, they are able to measure and analyze their performance, turning innovation from a sporadic activity to a predictable process that ultimately generates revenue for the organization.




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