435: Hershey’s award-winning approach to innovation – with Charlie Chappell and Greg Coticchia

Learn from the 2022 winner of PDMA’s Outstanding Corporate Innovator award – for product managers For each of the last 36 years, the Outstanding Corporate Innovator award has been provided by PDMA to an organization that excels in innovation. At the time of this recording, the last winner was Hershey, and I was at their award ceremony. There were boxes of Hershey chocolate treats for everyone. It was a good ceremony :)  We are going to learn what has made Hershey an outstanding innovator, gaining insights that might help you and your organization. With us is Charlie Chappell, the VP of Innovation and R&D at Hershey, and Greg Coticchia, the CEO of Sopheon. Summary of some concepts discussed for product managers [1:54] Charlie, why did Hershey decide to apply for the OCI award? We thought we were having some success as an innovative company, but it’s always good to get an external perspective. We decided to pursue the OCI award as a learning exercise and a moment of inspiration for the company. Applying proved to be a galvanizing effort because we had a lot of people in the company involved as we thought about our innovation process from end to end. It helped bring the team together. Winning provided great external validation and energized the team to ask, what more could we do now with innovation? I recommend applying for the OCI award to colleagues working in other places, especially if you’re at a stage where you’re assessing your innovation operations now. Applying for the OCI award is a great way to document what you’re doing. It’s not for the faint of heart. There’s a lot you put into the application. You get a lot of feedback from PDMA. They do a site visit. It is a lot of work, but the benefit we’ve gotten out of it has been well worth the effort. [4:01] Charlie, what are the innovation practices that makes Hershey an outstanding innovator? Everything for us starts with strategy—both innovation strategy and corporate and total enterprise strategy. In the application, we shared our enterprise strategy and specifically the significant role innovation plays in that. We highlighted how we translate that strategy into the projects we pursue. We had clear KPIs of what innovation had to deliver. We shared how we set up a process and tools to manage and govern projects so we’re hitting our goals. We demonstrated we were meeting and beating our goals. We also emphasized how innovation isn’t just an R&D function or innovation group. We bring in the entire organization and involve everybody in innovation. Everyone plays a role, whether that’s our supply chain partners, sales partners, marketing partners, finance partners. Everybody contributes to what innovation is at the Hershey company. [5:58] How do you communicate the organization strategy throughout the organization to help keep everyone on the same page? Communicating strategy starts at the highest level of the company. Our CEO and executive committee members make a very concerted effort to share the enterprise strategy with every employee in the company. By the time I go to my team, they’ve already heard the strategy from my bosses. I communicate what that means to us. We make sure all our projects align to the strategy. We don’t want to pivot too much on our strategy, but we also need to evolve. Especially at the front end, we’re having discussions all the time, asking, “Does this project still fit with the strategy? Where does it fit in the priorities of everything we’re doing? If it’s not a high priority, what else could we do with those resources?” And then we pivot. At the same time, at the front end we need to see what’s coming next and make a pivot in strategy because of what we’re seeing happen in the marketplace.