Episode Summary
A few weeks back an email out of the blue came our way. Would we would be a part of Ferrara Candy Company’s internal innovation event? By now you know we love talking about innovation, so the answer was YES!
Today you’ll hear Josh interview Greg Guidotti, the General Manager at Ferrara, about what it takes to be an innovation high striker. How do you innovate in a company like Ferrara? We visit the age old question, “What is innovation?” and talk about insights, foresights, and candy!
We reference other interviews in this episode:
How To Leverage Insights for Innovation (with Ferrara’s Andy Renaud)
Innovation Through Incremental Change
How To Create an Innovation Framework
About Ferrara
Ferrara, a company related to The Ferrero Group, is an emerging powerhouse in the North American confections and sweet snacking categories. A passionate team of more than 6,000 employees works together to share delight in every bite through leading brands that have shaped the industry for more than 100 years. Our diverse portfolio of nearly 35 brands includes SweeTARTS®, Trolli®, BRACH’S®, Black Forest® and NERDS®, along with iconic favorites like Lemonhead®, Red Hots® and Now and Later®. Ferrara also manages the Keebler® and Famous Amos® businesses for The Ferrero Group. Headquartered in Chicago, Ferrara has an operational network of 20 locations in North America that includes manufacturing, distribution and R&D facilities. Learn more at www.ferrarausa.com.
Timestamps
What is the innovation secret sauce? – 1:48
Insights & Foresights? – 02:05
What is the opportunity for innovators?– 05:12
Small as an advantage – 08:53
Qualities of Successful, Innovative Companies– 10:09
Let Eagles Soar – 12:48
Difference Between a Great Brand & Innovative One – 13:51
Innovation Led– 16:42
Innovation is a Mindset –18:37
Cultivating Great Innovators –21:56
Full Podcast Transcript
Greg Guidotti: [00:01:04] Josh, before I started asking you questions, you just want to introduce yourself, let everybody a little bit about you and the work that you do.
Josh Barker: [00:01:09] Sure absolutely. First I want to preface this with the reason I’m here is I was promised a suitcase full of candy. So that’s primarily why I’m just kidding. It’s true. It is true. Exactly. Yeah, I’m really excited to be here. Background is all in innovation. I was a Director of Innovation at KPMG. I was a CTO out in Silicon Valley doing a lot of cool things with Google ventures . So my career has led me from the digital side, doing a lot of digital innovation with apps and building the right thing. I’ve been able to, and privileged to be able to interview hundreds of people all over the last couple of years.
It’s just a complete privilege to be here and being able to talk about my experiences.
Innovation Secret Sauce
Greg Guidotti: [00:01:48] So Josh let’s do kick it off. And I mean, what, in your perspective defines an innovative company. So is it just the ability to turn launches year on year or like what’s the secret sauce of an innovative company?
Josh Barker: [00:01:59] It’s a good question. What’s interesting is I was just telling you about all the different people I’ve interviewed on this. And the funny thing is this is the first question we ask a lot of people on the podcast. So we ask what defines an innovative company?
What does the word innovation mean? And what’s interesting is how many people started out defining what it’s not. And that’s what I find really fascinating. The second thing you mentioned is, is it the ability to turn out launches year over year over year?
I think we all here could say that’s not necessarily what makes an innovative company. If the launches aren’t effective at driving to a bottom line, then it really isn’t innovation. What are you doing when your litmus test is launches?
Insights & Foresights
It’s more than that. If you take a look at what it actually is it’s really about foresight. So, if you think about innovative companies think about ones that are so relentlessly in the shoes of their customer. They’re so customer focused that they have this foresight to see what the customer wants without them telling what they want. So great examples here are like Apple, right? You take a look at Apple. Everyone knows Apple. I think when you hear Apple, you immediately go to Steve Jobs and you think of innovation, it’s like, what is it? The three, five levels to Kevin Bacon. It’s kind of the same thing when you hear innovation to Steve jobs.
When you look at that, what’s interesting is, no one asked for the iPhone. No one asked for the iPhone. You look at Henry Ford and I think everyone’s heard his old phrase of, if we were talking about how to increase transportation speed, everyone would just say they want faster horses.
They’re not going to say they want an automobile. So this is where my word foresight comes in of being able to be relentlessly in the shoes of your customer. To know them well enough to understand what they want before they’re asking for it.
Greg Guidotti: [00:03:39] Yeah, Josh, I’m gonna ask you one more question on companies that have foresight
I think Apple is a great one in a well-known one. What would be a company that you would know that some of the people on this call would not know? How did they represent this is why they’re really innovative and this is the foresight that they’ve driven. Do you have a thought there?
Josh Barker: [00:03:54] Yeah. I mean, what’s interesting is a prerequisite to foresight is insight. Right. So if you look at companies that have insight. What does insight mean? If we’re going back to the concept of being relentlessly in the shoes of your customer, insight is being able to see and watch their habits. Watch them as they’re interacting with your product. As they’re interacting with their world around them. There’s a lot out in Silicon Valley that have gotten really, really good at being able to see this insight. Which helps them project the foresight. So like Airbnb, that’s another well-known brand that everyone knows,
The reason why they’re so successful isn’t because they built this online platform. It’s because they actually started out with insight and they started out saying, how can I rent my own apartment? How can I recruit my friends to rent their apartments? There was all managed by spreadsheets up until I think it was property, a hundred or 200.
They were focused on insights and relentlessly focusing on their customers. So. That’s it. That’s another example I would use.
A question I’ve got for you, Greg, is I know when you and I were talking a couple of days ago is you’ve worked with tons of brands.
The funny thing is , you showed me a brand page. I was like, all the brands my kids love! Like P&G, Kraft Heinz, now you’re at Ferrara. What’s the opportunity for innovators here at Ferrara?
What is the opportunity for innovators?
Greg Guidotti: [00:05:12] I appreciate the question. It’s funny because when we were talking through it and when I was reflecting on the discussion we had, when I think about my history across, whether it be Kraft, then Gillette became P&G, back to Kraft Heinz I’ve really been renovation led. And I think we talked a little bit about that within Post cereals. Lessening sugar and adding whole grains to each one of our cereals.
And then back at Kraft Heinz removing high fructose corn syrup from Capri sun and replacing it with real sugar and actually removing 10 calories out of each pouch. So 70 billion calories out of the marketplace. Mac and cheese and it’s changed, but it hasn’t, which was an incredible renovation.
And then did a very same playbook too with hotdogs. It’s funny. I see Heather Boggs on the phone. We both work together on Mac and cheese and really reinventing that business. But being right by the consumer increasing the sales of that business by 33% and then did a very similar playbook, removing nitrites and nitrates on hotdogs.
Again, grew the business 17% and it’s $400 million business. So, you know, it’s funny. So I spent my career on renovations and then actually in launched a couple of pretty interesting innovations, a few different battery applications when I was in Asia, but one that was really interesting to me was crack an egg and really it’s simple. It’s essentially everything you need to create an omelet. All you need to do is just crack an egg and it comes in a microwaveable bowl. So just crack an egg. It was really about that insight to foresight and how do you unlock a quick breakfast to get there?
It really was just such a simple concept of just cracking an egg and that whole notion of, you know, with cake mixes and Betty Crocker if I crack an egg, I’m actually making something as opposed to some sort of meal kit. There’s so much embedded in the consumer, but I ramble on, on the past. And I think your question was, what’s the opportunity for innovators here at Ferrara? I honestly think that, what got me to come to Ferrara was that opportunity to actually innovate as we think about we here are driving a growth algorithm across driving velocity, distribution, and innovation. Innovation being the lifeblood to confections consumers because they’re variety seeking so what we can do from an experience perspective is just so amazing.
Even though we’re in a sugar category, you know, what this team has been able to even achieve in just a couple of years, really step changing, whether it be Nerds, gummy clusters or Trolli gummy creations, really creating products and experiences. What I think is special about being an innovator at Ferrara is because we work in a category and while it’s consumer packaged goods it’s not necessarily food.
It’s a treat. It’s not sustenance. So there’s ways that you could play on emotions more than ever before. I had worked on a coffee business, a premium coffee business with Katie Duffy who’s on the phone here. And that has a category that’s highly driven by emotion and ritual.
I think confections and candy is very much in sort of what you’re able to tap into from a consumer is so amazing in terms of whether it be a treat, whether it be a reward because it plays into so many other emotions. So the opportunity for us, because confections is so loaded with emotion because it is not sustenance.
It is a treat and it’s based on that reward and you bring a smile to your face. So we are sharing delight in every bite. And I think that opportunity is there. And I think, as we’ve tried to stand up our organization. We have that common intent across in tech, finance, sales, operations, and marketing to really drive that change.
And we’re small, we’re small enough to make a positive difference.
Small as an Advantage & Ferrara Fast
Josh Barker: [00:08:53] And you and I talked about, small is an advantage, right? I mean, you can move quick and fast. That’s great.
Greg Guidotti: [00:08:58] We did talk about that. We talked about Ferrara fast and I think the element that as we grow as an organization, we need to be able to find the way to harness that speed with a little bit more intention.
Because we said, you know, you could run fast in a circle. And, and I think we’ve been guilty, we’ve been guilty of that on a couple of things, but I do think that with that level of intention, and I was really intrigued by, you know, what you said in terms of insight to foresight, what is that unmet need?
What is the consumer saying? What’s behind, what the consumer is saying to get to that unmet need. And I really do feel like we’ve really cracked the code on quite a few of our businesses in the portfolio, whether it be accelerations ofSweet Tart ropes. On Trolli, in the great innovation agenda they’re nerds, which is an unmitigated success.
I don’t think we said this, but in the latest four weeks, this is a business that in retail dollars has exceeded a hundred million dollars and it’s up 83.9%. You can’t say, “Oh yeah, but that’s a small base.” That’s not a small base. So impressive stuff. So let me ask you when you think about innovative companies, what are some of the qualities that successful innovative companies share?
Qualities of Successful Innovative Companies
Josh Barker: [00:10:09] It’s a great question. Obviously been interviewing a lot of different people over the last couple of years on innovation and there’s three that really stick out to me.
One is being afraid not to fail. I’ll even take it a step further, not only Being not afraid but saying it’s okay. And even more so than okay, saying it’s part of the process. And what I don’t mean is failure in terms of , if it’s blatant, you know, Hey, you just didn’t do your job. That’s obviously not the kind of failure we’re talking about. It’s about taking risks, right. When you’re talking about getting the insights and moving to foresights, a lot of it is taking some risks and trying things.
The second one I would say would be very related to it is really, I think the litmus test of success shouldn’t be revenue alone. If you’re talking about innovation, it should really be the speed of learning. If you can learn faster than all your competitors in the marketplace, you’re going to be more successful than all of them.
So we talked about insights, right? So insights being able to reach into your bag of insights and being able to learn faster will bring more foresights. Which will bring more innovation. They kind of go hand in hand because the speed of learning, you also have to take these risks, which you also have to be okay with failure, because as you look at the startup world, how many startups per year fail ?
There’s a ton of startups and being okay with that mentality of saying, ” it’s okay to fail and it’s part of the process.” What I’ll add to that too, is we talked about being a small organization in conjunction with failure is okay and part of the process and speed of learning.
One of the things that I think Ferrara has an advantage here too, this coming from KPMG as a director of innovation there. One of the things that was difficult is the fact that when you hear the word KPMG and you hear the word big four there’s two things that happen.
One is their reputation is everything. You have good feeling against it, right? No one got fired for hiring. IBM, that’s another saying, right? Same thing with KPMG. But when you look at KPMG, the hard thing is, is reputation can also bind you.
Right, because you’re then too afraid to take risks. So there’s ways of taking more calculated risks. There’s ways of maintaining your brand without tarnishing it in the marketplace and taking risks and being okay with failure. So those would be two. The third one, I would say is empowerment. Because they’re very related. I’m a big, big proponent of hiring the right team and then empowering them to succeed. So allowing them the flexibility to learn and make mistakes. So they’re all three are very intertwined and related. Those are the three qualities that I could say stick out to me in a big way.
Let Eagle’s Soar
Greg Guidotti: [00:12:48] Yeah, I think the last one particularly resonates with me and I know there’s a Steve Jobs’ quote that I will not remember, but there’s one that I I’ve said a bunch , you’ve got to just let Eagles soar. Yeah. And, that’s something that, you know, candidly, I think is an opportunity area for us as an organization too.
We’ve grown our organization, I think we’ve grown our marketing organization, you know, 60%. Now that is a small based argument because we’re still small and mighty, but I think the same could be said across sales, across finance, across intech.
So we’ve committed and we’ve brought incredible people in. And I think the opportunity area for us is to empower and let eagles soar. I’ve used that saying, and I try to live by that saying, and any of the 114 people on this call, don’t see me doing that you could punch me in the face. Let eagles soar because that is, there’s so many people that are so much closer to. The business yes, the line, the opportunity what’s going on with the consumer. How do you really tap into that and we need to, as an organization, listen, and empower for sure.
Difference Between Great Brand & Innovative One
Josh Barker: [00:13:51] One of the things you just asked me, what qualities make, but you know, one of the things I’d ask you is what, in your opinion is the difference between a great brand and an innovative one?
Greg Guidotti: [00:14:02] It’s funny because that’s a really hard question to answer and I think that You know I have just some held beliefs on a great brand is one that, like you said, understands its consumer. I think we said this separately when we were talking, it’s like, if you start with the consumer, you rarely go wrong because you’ll understand what the pinch points are. So if you are consumer centric in, in past organizations, you know, we went so far as to say, you know, the consumer is boss.
And it’s true because they select or de-select you at any given time. So a great brand is one that understands its consumer, but then also understands itself. You have strong foundations to understand what you represent and why you’re actually here. So the equation for me is understanding the consumer. Then understanding who you are and the role that you can play in the marketplace.
So like, are you differentiated as a product or proposition? And for me again, given my history, I’ve been so guided by establishing and reestablishing the foundation of our portfolio or the foundation of our business. That gives you the right to innovate because you cannot innovate your way out of a problem.
So if you have this leaky bucket and you go start innovating here, you’re still going to be dragging off that leaky bucket. You have a responsibility as a marketer or as a business owner that your core is strong.
So a great brand is led by the consumer, knows what they represent and, has a responsibility to build its core. Because when you grow your core, you can then go to school for more because you get the top spin on your innovation.
So Nerds as an example, strong core, therefore as you innovate, it just becomes a self-fulfilling prophecy of success. I’d say that, for me, a great brand is the one that understands the consumer, itself, and then has taken the time to do what’s right. Make the hard choices on its core portfolio to make sure that then you could start innovating.
I don’t know that I have a different definition of an innovative one because I think it has the same level of being consumer centric and understanding where your gaps are. And then I think having the intestinal fortitude to just get out there and make it because for us, listen, guys, we’re not saving the world.
This is just sugar. And I think we could embrace the speed of learning, which was the litmus test of success. And the speed of learning was another inspiration I got from what you said in your last question. So let me ask you, as we talk about the difference between great and innovative. When you’re looking at companies out there what are the biggest mistakes that companies can make when they say I want to be innovation led? What are you seeing as some of the biggest mistakes that companies can make on that journey to becoming innovation led?
Innovation Led
Josh Barker: [00:16:42] Good question. I interpret that as when someone says the phrase innovation led, what I think that needs to be understood is innovation is not a destination. If you look at innovation as a destination you are not uncovering the true why. Because you’re not innovating for innovation’s sake. Innovation is not necessarily a destination you want to get to. I love the term you’ve been using is I’ve been saying relentless about our customers, you’re saying customer centric. I think that’s the same exact thing is being so customer focused that you have that foresight to develop innovation. To delight your customers.
I’ve been involved in a lot of organizations. Giving some examples about innovation being a destination, where they’ve had an internal innovation workshop. And first of all, I want to say this, this whole thing you guys are putting on is fantastic. I love that we’re doing this and I wish more companies would do this. But I’ve seen some, some workshops that have been a part of that, they’ve treated innovation as a destination. And the fact that they’ve started out by saying, “Hey, here’s the latest trend, AI.” They talk about a technology and they say, “How do we use that technology? Now inherently there’s nothing wrong with asking that question.
I think there could be a profitable exercise to be had by doing that. However, I think it’s more profitable to start with, “how do we delight our consumers?” And then thinking of innovative ways of doing that by talking about the insights that you have. I love that, previously you said that, candy is more emotional.
Certainly eat more candy and COVID, I don’t know if you guys have, but I’ve certainly ended more candy and COVID and for me, I totally resonate with it being an emotional thing. So that’s just a great insight that you have. To get back to your question one mistake is innovating for innovation’s sake, you know, in treating innovation as a destination, rather than innovation as a process, right? It’s a process that you get to delight your customers.
Innovation is a Mindset
Greg Guidotti: [00:18:37] I think it’s a process. It’s also a mindset. I think for me, there’s a lot of ways that we can innovate and have innovated, that is not product based.
We think about some of the partners that we had and we have been establishing different ways to connect with the consumer in an agile manner. Listen, that’s innovative. And that’s an example of us punching above our weight. Connecting with the consumer where they are in different ways. As we’ve all been shelter in place and our media habits are exponentially accelerating. Some of our shopping habits are exponentially accelerating, like in terms of acceptance of e-commerce, click and go, and delivery stuff. So like how can we think differently? I won’t rant because I think we’re underfunded as a total portfolio, but we’re making every investment work harder by thinking smarter.
That sort of element of innovation for us has really been, you know, I think we’ve got a great product agenda and we stood up across, you know, 1908 and intech and operations and marketing a way to really unlock those insights, to drive foresight, to drive great products and propositions which are winning. I think from there, it’s like, I do think there’s elements on our activation and how we’re engaging, how we’re unlocking and how our brands are engaging on channels that we haven’t had before. TikTok, as an example and the amount of Trolli interest on TikTok organically, it’s like the brand, it’s weirdly awesome. So there’s different ways to think on that. Innovation we should embrace, it plays across the whole marketing mix and the whole proposition mix. The packaging, the product, the proposition, how we’re engaging, where we’re engaging.
That’s where your brand, your foundations, your promise comes to life.
Josh Barker: [00:20:21] Yes. Yes. Real quick here, I mean, I think what you said is so important. I was talking with a director at Anheuser Busch, and one of the stories that they told, which was such an impactful story is they sell beer and when you go to a convenience store, there’s tons of selections. So then the idea is, is how do you have your brand, if you’re a beer company, stand out in that aisle? And so, I mean, they told the story of, they were one of the first people to put on one of those gold foils and what they saw when they did market tests was they saw an increase in sales up to 15%. In just particular locations and then across the board when they rolled it out.
That’s an amazing small innovation. And the reason for that in their studies, when they were gathering insights, before they actually rolled it out, was they actually found that people thought it was a higher quality beer because of the foil on top, there was this perception. I think what you’re driving at with Ferrara is that there’s some things like that in the portfolio that you guys could be thinking about. How can we take the Nerds brand and do that same kind of thing? How can we take this other brand and do the same kind of thing, because there’s all sorts of those kinds of cool innovations that are not just new products, there are new tactics.
And so I think that’s exactly what you’re getting at.
Greg Guidotti: [00:21:35] I want to ask you one more question. As the podcast hosts of Ask an Innovator, you’ve spoken to many innovation leaders and key stakeholders across the process.
So in your opinion, what do you see is the tools, resources, and support that’s needed to cultivate great innovators within our R and D teams, marketing teams across our enterprise?
Cultivating Great Innovation
Josh Barker: [00:21:56] I’ll list out some things that I think are important. Some of them, in terms of tools, resources, support, one of the biggest things that as I’ve been working inside of other companies with talking about their innovation process and on the podcast is. I don’t know if you’ve read a book called Slack, on the cover it’s got this slinky. Basically they talk about the concept that the greatest ideas, there’s a reason why we have these shower moments, right? There’s a reason why you have these moments of inspiration and that’s because when you’re a nine to five in your day job in your business.
And I say day job, because we all have those things that we have to do. And we’re running around keeping the products going, keeping everything going, keeping the lights on. But if we’re not taking time to provide Slack in our day to think about some of these innovative things and being intentional and leaving that room, that’s where all the innovative thoughts happen, allowing team members to have that Slack to say, how can we be thinking about it? So, space and time. Mental space, right? That’s one thing. The other thing is, is I think I mentioned innovation is a process and it’s totally a mindset too. Innovation being a process. I think a lot of people have a fallacy that innovation is a person.
You think Steve jobs right? Or a set of people or it’s a leadership team or it’s all of this innovation is coming from one spot in the organization. There’s a couple of fallacies wrapped up in that, right? It’s it’s not a person, it’s not a group. You mentioned this, it’s actually all of the people boots to ground. That’s where the insights happen and that’s where the foresights will come from. Right. How can you then build systems and systematize and make a process of innovation that’s baked into the organization’s DNA? So that’s where, there’s a lot of creative organizations doing this.
One of those is I’ve talked with as you’ll find on the podcast is Bosch. Bosch is doing a fantastic job at this. I’m being mindful of time here, but check out the episode on Bosch, they’ll show some more systems of innovation of what they’re putting in place of internal startup contests and all sorts of cool things that could be of use.
Greg Guidotti: [00:24:00] I think that’s great. I mean, because if you create an innovation group, you’re dead men. We are all business owners and we know these brands better than anybody else. One other example that I have from my past is that, honey bunches of oats the best post cereal, it is a mega brand.
It was created by a line operator in Battle Creek and the person realized that Post Toasties and CW Post Granola were just declining, like crazy. So put a couple together, did this and that and created a whole cereal. That’s the biggest brand that Post cereal ever made was made by a line operator in Battle Creek.
That’s my best example in life. And it’s true. And if anybody worked on posts yeah. I used to work on the launch and a bunch of, no, it was the person on the line at Battle Creek.
They, did it
