Executive Growth Forum Case Summary: Consumer
A traditional 100+ year-old business recognized the need to innovate to avoid disruption from an increasing number of direct to consumer digital solution providers.
Their first step to address this challenge was a board decision to invest in researching the market and defining a strategy to proceed. First, they engaged a high-end management consulting company, which conducted a two-year study of the situation. This was followed by an additional year of work implementing the recommendation – an outsourced innovation project. However, the time money and effort spent on these approaches yielded minimal results.
By 4th year, when the direct to consumer competition had increased significantly, the board funded a spinout to create their own D2C disruptive solution. The CEO, an appointed 30-year company veteran, had clear (yet traditional) objectives and milestones to develop and monetize digital solutions within two years.
The COO (a prior leader in the parent company and an EGA member) delved into the end customer needs, while initiating product development. At the end of 9 months, it was clear to him and many of the employees that many of the consulting firm recommendations and expectations of the CEO were unrealistic.
Feeling conflicting pressure from employees who were threatening to leave, the CEO and the board which was considering defunding the initiative based on limited results, the COO decided to bring the “Case” to the Executive Growth Forum (EGF). Through his work with the EGA Group Leader in preparation for the session, he outlined:
- The objective: Build an innovative ‘disruptor’ to offer existing customers a D2C option; thereby maintaining customer loyalty while gaining insights to customer behavior and data.
- The challenge: Traditional approach to management and incentives are misaligned with innovation and are impeding the entrepreneurial company’s ability to succeed.
- Tried to date: Relay market needs, employee concerns, principles of entrepreneurship to CEO, board and others with limited success
- Request from peers: Insight from others’ experience, inspiration, and suggestions on how to the shift parent company mindset and the CEO regarding incentives and metrics for the new spinout that would drive the kind of innovation necessary to achieving breakthrough success. This included questions such as:
- What are opportunities for successfully achieving milestones required for renewed/continued funding of the spinout?
- How to motivate and engage young, creative innovation team members when leadership is focused solely on traditional revenue targets?
Discussion and Outcome:
Through facilitated discussion during the forum, the members advanced the conversation and the COO left with commitment, support and actionable takeaways which were used to develop a strong business case for a new approach.
Ultimately the case which was reviewed in the following Executive Growth Forum involved focusing innovation efforts on a specific market which had previously demonstrated early-adopter characteristics. The new focus prompted the creation of new metrics and milestones for driving success. Within months the team at the spinout was able to achieve its first milestones, enlist key talent for the long term, and advance its strategy for longer-term growth.
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