Consumer product and retail companies team with entrepreneurs to innovate: EY report

Three pillars of agile innovation to ensure successful collaboration

MONTREAL, Sept. 17, 2014 /CNW/ - The vast majority of consumer products and retail executives say that collaboration with smaller entrepreneurial firms has become increasingly important to drive innovation and achieve their strategic goals, says EY in a global report, Delivering agile innovation.

"The rapid evolution of technology and data has fundamentally changed consumer behaviour — and the way companies must think about delivering innovation," says Daniel Baer, EY's Canadian Retail and Consumer Products Leader. "It's increasingly difficult for large companies to deliver innovative products, services and processes."

That's where external partners come into play. Many consumer products and retail companies are looking outside their organizations to smaller entrepreneurial firms to unplug innovation bottlenecks.

"Large companies are often hardwired to maximize efficiency and avoid experimentation," says Baer. "Collaborating with smaller entrepreneurial firms offers the agility, creative thinking and the risk taking attitude needed to identify, develop and scale up promising ideas. In an environment where consumers are constantly upgrading their technology, speed to market becomes critical in the delivery of such innovative products and services."

Globally, 49% of executives from consumer products and 32% from retail companies are set to increase the proportion of product innovation that they source from external firms over the next three years. Executing these relationships is not without its own set of challenges, however.  

Only one in 10 consumer product and retail executives deem their companies very effective at both sourcing potential collaborators and aligning incentives between the two partners.

Managing the challenges of collaborating begins by following the three pillars of agile innovation:

Create:

  1. Make the case for being agile
  2. Cultivate an agile culture of experimentation
  3. Think simple, act fast

Incubate:

  1. Identify the right team
  2. Determine the appropriate framework for each collaboration
  3. Maintain open and frequent communication

Activate:

  1. Adapt processes and break rules as necessary
  2. Define and measure success
  3. Iterate and work incrementally

"Overcoming the difficulties of working with entrepreneurs will be critical for consumer products and retail companies' long term success," says Baer. "Winning in this age of innovation depends on collaboration."

About EY
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.

EY is proudly celebrating 150 years in Canada. For more information, please visit ey.com/ca. Follow us on Twitter @EYCanada.

EY refers to the global organization and may refer to one or more of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.

SOURCE: ERNST & YOUNG

For further information: Erika Bennett, erika.bennett@ca.ey.com, 416 943 5497; Sarah Shields, sarah.j.shields@ca.ey.com, 604 648 3607; Julie Fournier, julie.fournier@ca.ey.com, 514 874 4308


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