By Fonterra’s director for Category, Strategy & Innovation, Mark Piper
There’s more to innovation than simply looking towards a new technological invention or product development to keep up with the fast-changing business environment – people and culture also play a crucial role.
The emphasis on people has never been timelier, as the world considers its next move in a post-COVID-19 era. Trust gained from long-standing relationships will be essential for businesses as they restart innovation pipelines.
While it’s important to be agile, companies must also make a conscious effort to better understand consumer needs in the new normal. They need to do more than just jump on a new tech bandwagon – businesses need to focus on getting robust consumer insights to better deliver products and services with empathy and care.
Teams need to have the opportunity to consider new perspectives and better anticipate how products will be received in different cultural contexts. Because diversity doesn’t just fuel creativity, it also drives profit – according to a Boston Consulting Group study, companies with a more diverse management team achieved 19% higher revenues as a result of increased innovation.
This holds true at Fonterra Research and Development Centre (FRDC) where we have a team of 350 people, representing over 40 nationalities, and over 4,000 years of combined dairy experience. Based on my personal experience, disruptive ideas seldom occur when the team is made up of members from the same background who have a similar point of view.
The complexities of Fonterra’s products also require us to work in cross-functional teams with employees across different professional backgrounds – from nutritionists and dieticians to food scientists, process engineers, and clinical researchers.
The unique perspectives our diversity offers have sparked some of the most resilient and effective solutions I have observed in the dairy industry. Thanks to collaboration and knowledge-sharing by teams across different specialties, we introduced the world’s first heat-stable whey protein in 2012, which has since been successfully applied to a range of product categories.
Unshackling innovation needs to begin with encouraging each employee to think creatively and push boundaries by cultivating an environment that welcomes a healthy level of risk and experimentation.
To do that, the focus on diversity also needs to be underpinned by a culture of honesty and openness, so that everyone within the company feels comfortable to share their ideas and work collaboratively.
Despite the transition to people-focussed business models to spur innovation, companies still find it challenging to deliver a consistent pipeline of innovation because of the rapid pace of technological transformations, complex product ecosystems, and evolving consumer needs.
That’s where open innovation allows companies to tap into the strengths of external parties such as universities, start-ups and even competing players within the industry to get solutions. This kind of collaboration also provides employees with an opportunity to learn from the best practices of other firms and enhance their skills.
Innovation and technology have become an important competitive differentiator for businesses, but organisations that are able to consistently maintain that success are those that realise the innovation pipeline cannot be sustained with just technological advancements.
The real enablers of disruption and growth are the people – and that can create a positive shift in corporate culture as well as profitability.
Mark Piper is Fonterra’s director for Category, Strategy & Innovation and has been with the Co-operative for more than 20 years in different parts of the business. He leads Fonterra’s Palmerston North-based Research and Development Centre (FRDC) – home to more than 350 researchers, engineers, nutritionists and scientists from 46 different countries, with more 4,500 years of combined dairy experience.