429: Innovation practices of the best companies – with Sally Kay

Lessons for product managers from PDMA’s Outstanding Corporate Innovators Award Every year the Product Management and Development Association (PDMA) recognizes an organization with the Outstanding Corporate Innovators Award (OCI). Hershey, the chocolate maker, was the last winner, in 2022. The winners of the award can teach us valuable lessons about innovation. To help us learn some of those lessons, Sally Kay is with us. She has served on PDMA’s OCI Committee for several years. Sally spent 36 years with The Dow Chemical Company and GlaxoSmithKline Consumer Healthcare. After working in R&D, Finance, Sales, and Marketing she focused her career on various areas of innovation and new product development. Since retiring, Sally has started her own consulting business, Strategic Product Development, which focuses on the front end of the innovation process.  Summary of some concepts discussed for product managers [3:04] Why was the OCI award created? OCI was created as a learning vehicle for PDMA. When a company achieves a sustained and quantifiable innovation success, PDMA will give them an award if the company will present their lessons learned at the annual conference. The OCI committee uses a rigorous process to evaluate candidates, focusing on identifying unique practices that will provide valuable learning opportunities for others trying to improve their innovation practices. We look under the hood of these companies to learn how they are sustaining innovation success. [5:05] What is required to compete for the OCI award? There are three primary criteria: * Sustained success launching significant new products or services * Significant quantifiable business results delivered by those new products or services * Consistent use of disciplined product development practices that the company is willing to share with others We provide detailed feedback to companies that don’t win the award. Many companies find this valuable, and some later win the award after adapting their practices to reflect what they learned from us. [9:40] What are key innovation practices that winners have in common? The award started in 1988, and in 2004 the OCI committee was asked to write a chapter for the PDMA Handbook of New Product Development about the OCI award. We found consistency in the winners’ practices that others competing did not have. Even though these companies were diverse in industry, size, and geography, their practices were consistent. How they executed those practices depended on their industry and culture. We conducted two more retrospective analyses covering 2004-2013 and 2014-2021. We saw an evolution of the practices that separated the winners, but we still saw that consistency of practices across the winners. We learned that achieving innovation success has not gotten easier over the 35 years of the OCI award. From 1988-2004, winners were early adopters of Stage-Gate, cross-functional teams, and voice-of-the-customer. Today, the practices that differentiate OCI winners are much more complex and involve: * innovation strategy that defines where the company is going to play and how they are going to win * intense focus on the front end of the innovation process * portfolio optimization * external collaboration and open innovation * culture that supports bold thinking, risk-taking, and failure * Lean and Agile practices * metrics to measure effectiveness of the innovation process * strong corporate commitment to innovation [18:07] Do you have any favorite innovation practices you’d like to talk more about? Innovation strategy is critical. The company Corning was once very dependent on the telecom industry. In the early 2000’s, that industry started to decline, and Corning almost shut its doors. Instead,