Micro-Innovation in FMCG: How Small Changes Can Lead to Big Wins
John Elliott • May 28, 2023

In the fast-paced world of Fast-Moving Consumer Goods (FMCG), innovation is the lifeblood of success. Companies constantly strive to bring new and exciting products to market, but often, the focus is on grand, game-changing innovations that promise revolutionary outcomes.


While these transformative breakthroughs certainly have their place, it's important not to overlook the power of micro-innovation - the small, incremental changes that can lead to significant gains. In this article, we will explore the concept of micro-innovation, why small gains (and small failures) can be advantageous, and why it is crucial to look for leaders who embrace these qualities when hiring.



What is Micro-Innovation?

Micro-innovation can be defined as the process of making small, incremental improvements or adjustments to existing products, processes, or services. It involves identifying and addressing pain points, inefficiencies, or areas for enhancement on a micro level. Instead of reinventing the wheel, micro-innovation focuses on fine-tuning the existing systems and processes to drive continuous improvement.


Consider the example of a leading FMCG company that manufactures bottled beverages. While a grand innovation may involve developing a completely new line of beverages with unique flavours and packaging, micro-innovation could involve small changes in the formulation, packaging design, or even the cap mechanism of an existing product. These small adjustments may seem inconsequential at first glance, but they can make a substantial difference in terms of customer satisfaction, operational efficiency, and ultimately, financial success.


Small Gains: The Power of Marginal Improvements

One might argue that seeking small gains is not as exciting as pursuing radical breakthroughs, but overlooking the power of marginal improvements would be a grave mistake. In fact, numerous success stories demonstrate how small gains can lead to big wins.


Take the example of Toyota, a company renowned for its continuous improvement philosophy. The concept of "kaizen," which means "change for the better," lies at the heart of Toyota's success. By encouraging every employee to contribute to small improvements in their daily work, Toyota has achieved remarkable results. Over time, these incremental changes add up, leading to enhanced quality, increased efficiency, and reduced costs. By embracing micro-innovation, Toyota became one of the world's leading automotive manufacturers.


Similarly, in the FMCG industry, Procter & Gamble (P&G) is known for its commitment to micro-innovation. P&G's researchers and scientists constantly work to make small, incremental improvements to their products, from laundry detergents to skincare solutions. These micro-innovations might include optimising the ingredients, refining the packaging, or enhancing the user experience. By focusing on small gains, P&G has built a portfolio of household brands that consistently deliver value to their customers.


Small Failures: Lessons in Innovation

While the concept of small gains is enticing, it is essential to recognize that micro-innovation is not a guaranteed path to success. Small failures are an inevitable part of the innovation process, but they can also be advantageous if approached with the right mindset.


Failure is often viewed as a taboo in corporate culture, with a focus on avoiding mistakes at all costs. However, embracing small failures as learning opportunities can foster a culture of innovation and growth. When leaders encourage their teams to experiment, take calculated risks, and learn from failures, they create an environment that promotes continuous improvement.


One of the most famous examples of learning from failure comes from Thomas Edison, the inventor of the electric light bulb. When asked about his numerous failed attempts, he famously responded, "I have not failed. I've just found 10,000 ways that won't work." Edison's persistence and willingness to embrace small failures ultimately led to the breakthrough that revolutionised the world.


In the FMCG industry, the concept of embracing small failures is exemplified by companies like Coca-Cola. Despite being a global beverage giant, Coca-Cola has had its fair share of unsuccessful product launches. One notable example is the introduction of "New Coke" in 1985, which was met with strong consumer backlash. Rather than retreating and abandoning the idea of innovation altogether, Coca-Cola listened to its customers, quickly acknowledged the failure, and reintroduced the classic formula as "Coca-Cola Classic." This strategic move not only helped the company regain consumer trust but also demonstrated the power of learning from small failures and adapting accordingly.


Leaders Who Embrace Micro-Innovation: A Valuable Asset

In a rapidly evolving business landscape, leaders who embrace the concepts of micro-innovation, small gains, and small failures are invaluable assets to any organisation. They possess the vision to recognize the potential in incremental improvements and the resilience to learn from setbacks. When hiring, it is crucial to seek out these qualities in potential leaders.


First and foremost, leaders who champion micro-innovation have a keen eye for detail. They understand that success lies in the fine-tuning of existing systems and processes, rather than solely relying on big, disruptive changes. Their ability to identify areas for improvement on a micro level allows them to make calculated adjustments that have a significant impact on overall performance.


Furthermore, leaders who embrace small gains possess a growth mindset. They see failures not as roadblocks, but as stepping stones to success. Their openness to experimentation and willingness to learn from setbacks create a culture of continuous improvement within their teams. They inspire others to think creatively, take risks, and pursue innovation, knowing that even small steps forward can lead to significant breakthroughs.


Consider the case of Satya Nadella, the CEO of Microsoft. Since taking the helm in 2014, Nadella has been a strong advocate of micro-innovation within the company. Under his leadership, Microsoft has shifted its focus towards cloud computing and subscription-based services, making small, strategic changes to its business model. This approach has resulted in remarkable growth and profitability for the company, propelling it to the forefront of the technology industry.


In addition to their attention to detail and growth mindset, leaders who embrace micro-innovation are exceptional collaborators. They understand the importance of engaging diverse perspectives and fostering cross-functional teamwork to drive innovation. By encouraging employees from various departments to contribute their insights and ideas, these leaders create a culture of collaboration that fuels continuous improvement.


When hiring, it is crucial to assess candidates not only for their technical skills but also for their ability to embrace micro-innovation and lead others in doing so. Look for individuals who have a track record of implementing small, impactful changes, who are not afraid to take risks and learn from failures, and who inspire collaboration and creativity within their teams.


While grand innovations may capture headlines and attention, the power of micro-innovation should not be underestimated. Small gains and small failures play a vital role in driving continuous improvement and long-term success in the FMCG industry. Leaders who embrace these concepts possess the vision, resilience, and collaborative spirit necessary to navigate the complex landscape of innovation. By prioritising micro-innovation and seeking leaders who embody its principles, organisations can unlock the potential for significant wins and stay ahead in a competitive market.


So, the next time you consider innovation strategies for your FMCG company, remember the profound impact of small changes. Embrace micro-innovation, encourage small gains, and learn from small failures. In doing so, you'll be paving the way for remarkable success and solidifying your position as an industry leader.


Executive introducing new leader as part of executive onboarding process

Executive Onboarding in Food & Beverage: The Blueprint for Success

By John Elliott • 09 Apr, 2024
The arrival of a new executive heralds a period of opportunity, transformation, and, inevitably, challenge. The process of integrating this new leader – onboarding – is a critical, often under-emphasised phase that can significantly influence the trajectory of both the individual's and the company's future. So why do so many organisations fail to get executive onboarding right? The High Stakes of Executive Onboarding The adage "well begun is half done" resonates profoundly in executive onboarding. Harvard Business Review reveals a startling statistic: as many as 40-50% of new executives fail within the first 18 months of their appointment. This failure rate is not just a personal setback for the executives; it represents a substantial cost to the company – often up to five times the executive's salary. The reasons for failure? Poor cultural fit, unclear expectations, and inadequate onboarding support top the list. But what makes the consumer goods industry particularly challenging for new executives? It's a dynamic sector where consumer preferences shift rapidly, supply chains are complex, and competition is intense. Here, more than anywhere else, an executive's ability to adapt and lead effectively from the outset is paramount. The Multifaceted Challenges in Onboarding The failure of many organisations in the consumer goods industry to effectively onboard new executives is multifaceted: 1. Tailored Onboarding Versus Standard Processes The provided text emphasises the necessity of a tailored onboarding process for executives, distinct from standard employee onboarding. This is particularly relevant in the consumer goods industry, where executives must navigate unique market dynamics, consumer trends, and complex supply chains in Australia. Tailoring the onboarding process to address these specific industry challenges ensures that executives can hit the ground running with a clear understanding of the landscape they will operate in. 2. The Role of a Dedicated Onboarding Team The concept of a dedicated project team for executive onboarding, as implemented by Palo Alto Networks, could be highly effective in the consumer goods sector. Such a team could focus on providing industry-specific insights, facilitating connections with key stakeholders, and ensuring that new executives understand the nuances of the Australian consumer market. This team would act as a bridge between the executive and the unique aspects of the Australian consumer goods landscape. 3. Engagement During the Notice Period In the consumer goods industry, where market trends and consumer preferences can shift rapidly, keeping executives engaged during their notice period is crucial. This period can be used to familiarise them with current market analyses, consumer behaviour trends, and ongoing projects. This proactive approach ensures that the executive is well-informed and ready to contribute from day one. 4. Cultural Orientation and Familiarity Building a strong cultural connection is vital in any industry but takes on added importance in consumer goods, which often relies on understanding and adapting to cultural nuances to succeed. Regular touchpoints that orient the new executive to the company's culture, values, and consumer-centric approach can help in crafting strategies that resonate with the Australian market. 5. Collaboration Among Various Teams The need for collaboration between HR, Reward, Performance, and Talent teams is pertinent in the consumer goods sector. This collaboration can ensure a unified approach to addressing the specific challenges and opportunities an executive might face in this dynamic industry. For instance, understanding the compensation frameworks and performance indicators specific to different departments within a consumer goods company can aid an executive in making more informed decisions. 6. 'Just-in-Time' Resources The idea of providing ‘just-in-time’ resources is particularly beneficial for executives in the fast-moving consumer goods sector. Given the rapid pace of change in consumer preferences and market trends, having access to real-time data and concise, relevant information can be invaluable. This approach allows executives to stay agile and make decisions based on the latest market insights. 7. Understanding of Performance Cycles In the consumer goods industry, understanding the timing and nuances of performance cycles is critical. This is especially true in a market like Australia, where seasonal trends and events can significantly impact consumer behaviour. The onboarding process should include education on these cycles, preparing executives to plan and execute strategies effectively in sync with these fluctuations. The Role of the Board in Facilitating Successful Onboarding The board of directors plays a pivotal role in the onboarding process. Their actions, or lack thereof, can set the tone for the new executive’s tenure. What should they be doing? Pre-Onboarding Engagement: The process starts before the executive's first day. Boards must ensure clear communication about the company's vision, challenges, and expectations. This early dialogue helps align the executive’s mindset with the company's strategic goals. Structured Onboarding Plan: Developing a comprehensive, customised onboarding plan is crucial. This should cover not just the operational aspects of the role but also the cultural and interpersonal dynamics of the organisation. Mentorship and Networking Support: Assigning a mentor from the board or senior leadership can accelerate the integration process. Additionally, facilitating introductions and networking opportunities within and outside the company is invaluable. Regular Check-Ins and Feedback: Ongoing support doesn’t end after the first week or month. Regular check-ins to provide and receive feedback ensure any issues are addressed promptly. Performance Metrics: Clear, early-established metrics for success help the new executive understand how their performance will be measured. Enhancing Executive Performance through Effective Onboarding The correlation between effective onboarding and enhanced executive performance is well-established. A study by McKinsey found that executives who had a successful onboarding experience were 1.9 times more likely to exceed performance expectations. Furthermore, these executives reported feeling more integrated into the company culture and more effective in their roles earlier than their peers who experienced less structured onboarding. Effective onboarding leads to better decision-making, faster strategy implementation, and a more cohesive leadership team. It builds a foundation of trust and understanding that is crucial in the high-stake, rapidly evolving consumer goods market. Onboarding as a Strategic Imperative Effective executive onboarding goes beyond mere orientation – it is a strategic process that lays the groundwork for long-term success. As we've seen in the consumer goods industry in Australia, a well-planned and executed onboarding process can be the difference between a flourishing leadership tenure and a costly misstep. In an era where the cost of failure is high and the speed of change is relentless, consumer goods companies must view executive onboarding not as a perfunctory checklist but as a fundamental building block of sustainable leadership and organisational success. Remember, your new executive's journey is a reflection of your organisation's commitment to leadership excellence. Invest in their onboarding, and you're investing in the future of your company.
two men are sitting at a table with a laptop and talking to each other .

Talent Acquisition: Internal Strategies vs. Executive Search Partnerships in Australia's Beverage Industry

By John Elliott • 18 Mar, 2024
Explore the pivotal choice between internal talent acquisition and hiring via executive search firms in the food and beverage industry for optimal growth.
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