Kraft Heinz ‘embraced failure’ in digital transformation

Discussion
Photo: Groceryshop
Dec 12, 2018
James Tenser

Through a special arrangement, presented here for discussion is a summary of a current article from the bi-monthly e-zine, CPGmatters.

To drive its digital transformation and fully explore new solutions, Kraft Heinz had to create a “culture that really embraced failure,” Nina Barton, president of global online & digital growth at Kraft Heinz, said in a keynote address at October’s Groceryshop Conference.

She admitted, “For a $26 billion company it meant we had to actually reward people for taking risks. We did this through incubating people in an environment that allows them to thrive without fear of failure.”

Ms. Barton identified “seismic shifts” across the six stages of the shopper journey — discovery, inspiration, planning, shopping, cooking and eating, and sharing.

“Three out of four consumers now expect companies to understand their needs and expectations even before they know what they want.” As a result, she said, “We need to be mind-readers, anticipating and giving consumers what they want.”

Consumers also  crave “one-stop solutions” that take into account what the typical family is dealing with to put meals on the table: Round-the-clock activities; schedules that don’t match up; dietary restrictions; picky eaters; and limited time to run to the grocery store.

Kraft Heinz’s digital transformation priorities focus on hyper-personalization and creating “seamless consumer experiences” that connect the whole shopping journey.

When it comes to creating CPG business growth in the era of digital transformation, Ms. Barton enumerated four key learnings so far:

  1. “Create a culture that celebrates failure. Perfection is so yesterday and speed really is the future for us.”
  2. “Data is only as good as the consumer insights it uncovers.”
  3. “Create a process around innovation.”
  4. “Don’t just build a team. Build a movement. Create a unifying battle cry that makes teams excited to show up every day to work and grow the business.”

Ms. Barton summed up: “Growth doesn’t magically happen, as much as we may want it to. Growth requires rigor, especially in a big company where there is a lot of competing demands, and where sometimes the very processes that allow large companies to succeed can actually tend to stifle growth.”

DISCUSSION QUESTIONS: What advice would have for larger CPG vendors around encouraging employees to take more risks and innovate more quickly? Do you agree that the “very processes that allow large companies to succeed can actually tend to stifle growth?”

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"There should be no fear of failing, but there must also be the expectation of designing and measuring tests in ways that lead to insights. "
"It is easy to say that the company embraces failures to spur innovation, but will they actually change employee policies and process to support this approach?"
"Among the brave individuals, there are brilliant stars that continue to face giant hurdles. It’s no wonder many talented folks have bailed out to the start-ups."

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11 Comments on "Kraft Heinz ‘embraced failure’ in digital transformation"


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Chris Petersen, PhD.
BrainTrust

Removing fear of failure is a foundation of innovation. However there is a corollary principle from one of the most innovative leaders on this planet right now: “It’s not an experiment if you know it’s going to work.” — Jeff Bezos. I would underscore the word EXPERIMENT in the Bezos quote. There should be no fear of failing, but there must also be the expectation of designing and measuring tests in ways that lead to insights that change the customer experience.

Brandon Rael
BrainTrust

It is imperative for large global CPG companies such as Kraft Heinz to challenge the status quo, and take calculated strategic risks to innovate quicker. The customer preferences, especially when it comes to food and health are transforming and evolving significantly faster than most CPG companies are able to keep up with.

The time to keep things consistent and steady are long over. Consumers have shown a propensity to try, experience and experiment with new grocery products. In its three-year history as a combined company, the Kraft Heinz company has the strongest innovation pipeline they’ve ever had in place. Kraft Heinz has joined companies like PepsiCo, Coca-Cola and General Mills in setting up incubators to foster the growth of disruptive products.

James Tenser
BrainTrust

I’m of mixed mind regarding the highly-touted innovation labs, venture funds and incubators set up by large organizations.
In their favor is their declared intention to vigorously pursue development of new products, services and businesses. Large brand marketers and retail companies need to step out of the “failure-is-not-an-option” rut, without risking their large scale, cash-cow businesses.
But the downside of this approach may be the sequestering of all the cool new ideas, disruptive talent, and future-focused projects away from the core business. What does it say about management’s ability to trust its brand stewards? About how it can build a culture of innovation that permeates the entire company?
After listening to Ms. Barton’s remarks, I believe this is an issue worthy of thoughtful debate.

Anne Howe
BrainTrust

I worked for many big CPG companies as an client-focused agency leader, and I will say, frankly, that the climate for experimentation with a fail fast approach, and even a test and learn approach, is barely breathing. Among the brave individuals, there are brilliant stars that continue to face giant hurdles. It’s no wonder many talented folks have bailed out to the start-ups. One day the young folks will be senior leaders in CPG and expansive innovation practices will thrive again.

Doug Garnett
BrainTrust

In 60 years we moved from getting to the moon “before the decade is out” because NASA adopted an attitude that “failure is not an option” to “embrace failure.”

We can debate the subtleties, but the message, as I wrote recently comes across loud and clear: You can always succeed at failing — so set your sights low, refuse to embrace what is hard with a demand for success.

There is no question that processes that allow large companies to milk their cash cows are the same processes that stand in the way of innovation and new product success.

BUT embracing failure is not the answer. Understanding the diseases built into the system that prevent success and treat those diseases – not the symptoms. For example, management by KPIs is incredibly destructive to efforts to create the future. Yet management by KPIs has reached nearly religious veneration among executives in nearly every company. Embracing failure won’t solve that — admitting the problem is the starting point.

Ralph Jacobson
BrainTrust

Bottom line, I believe most of us agree that pushing the envelope and learning from failing is what innovation is all about.

Sterling Hawkins
BrainTrust

The question weighs the classical chaos of innovation with the order of the established business. The corporate processes DO hold back new possibilities, but simultaneously (usually, not always) enable and empower the existing business. Combining the two effectively is the key to success for retailers & brands (plus really any business).

One caveat on Nina’s insightful key learnings thus far though … versus a culture that celebrates failure, what about a culture that celebrates failure as much as they celebrate victory? I think Coach John Wooden said it best: “You can’t let praise or criticism get to you. It’s a weakness to get caught up in either one.” Show me a business culture that celebrates their people actually achieving their personal potential and I’ll show you a successful business.

David Naumann
BrainTrust
David Naumann
Vice President, Retail Marketing, enVista
8 months 12 days ago

“Create a culture that celebrates failure” is a great concept to encourage employees to take more risks. The challenge is for companies to “walk the talk.” It is easy to say that the company embraces failures to spur innovation, but will they actually change employee policies and process to support this approach?

Ricardo Belmar
BrainTrust
If you’re innovating, you’re experimenting. Your experiments can’t be 100% successful or they wouldn’t be experiments, they would be winning deployments. Even the champions of innovations at Amazon fail, and when they do they fail spectacularly (anyone remember the Fire Phone?). So yes, you can’t be afraid of failure, you have to accept and embrace it as a means to learn and improve your products and services. That’s all part of being innovative. Whether a CPG or retailer, not innovating is a recipe for disaster — innovate or die is the age we live in. That said, you also can’t experiment recklessly — you have to have a way to measure progress and success or you won’t know if your innovation is truly a useful and productive one or not. We often see organizations like Kraft Heinz setting up internal innovation labs or incubators to isolate and protect those groups working on experimental ideas. The goal is not to keep them isolated forever, but to protect them from the internal bureaucracy such large organizations tend… Read more »
Patricia Vekich Waldron
Staff

Large, complex organizations struggle to innovate because they have built decades of legacy processes and inflexible infrastructure. Formal rewards and process changes must be put into place to spur innovation.

Joan Treistman
BrainTrust

How about a culture that encourages success and doesn’t punish failure? I believe there is still a high percentage of new products that do not succeed … 85% at least.

Yes, CPG companies should encourage risk taking. At the same time, there should be guidelines about how to process innovation in a timely and effective manner. In my opinion, CPG companies often create barriers that impede achievement rather than facilitate it. Some of these barriers can be around budgets, number of people who are required to approve next steps and the level of proof that the innovation is viable. There are those who can get around the brick walls and move forward, but that’s in spite of the culture.

wpDiscuz
Braintrust
"There should be no fear of failing, but there must also be the expectation of designing and measuring tests in ways that lead to insights. "
"It is easy to say that the company embraces failures to spur innovation, but will they actually change employee policies and process to support this approach?"
"Among the brave individuals, there are brilliant stars that continue to face giant hurdles. It’s no wonder many talented folks have bailed out to the start-ups."

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