Playing It Safe Is No Longer Safe
Innovation comes with risk, but it also provides the opportunity for maximum growth. Nielson cites their own 2016 study in reaching the conclusion that when creating new products, 70% of companies prioritize risk mitigation over innovation that disrupts the category. However, that stunts growth, as illustrated by the top 25 established companies’ only accounting for $1 billion of the $35 billion in 2015 category growth. That’s an enormous opportunity gap!
So what should companies do about it? Nielsen suggests four mindset changes: focus on solving consumer problems; use consumer research to inform how to meet consumer needs rather than trying to diminish risks of new product launches; be willing to create the technological and logistical processes for the innovation rather than limiting themselves to their current capabilities (aka think outside the box); and consider supporting innovation launches with quality in-market execution strategies essential rather than a luxury.