Innovation comes with risk, but it also provides the opportunity for maximum growth. Nielson cites their own 2016 study in reaching the conclusion that when creating new products, 70% of companies prioritize risk mitigation over innovation that disrupts the category. However, that stunts growth, as illustrated by the top 25 established companies’ only accounting for $1 billion of the $35 billion in 2015 category growth. That’s an enormous opportunity gap!
So what should companies do about it? Nielsen suggests four mindset changes: focus on solving consumer problems; use consumer research to inform how to meet consumer needs rather than trying to diminish risks of new product launches; be willing to create the technological and logistical processes for the innovation rather than limiting themselves to their current capabilities (aka think outside the box); and consider supporting innovation launches with quality in-market execution strategies essential rather than a luxury.