Executive Leadership Tracks

Innovating Beyond Product: Driving Behavioral Change to Build

New Businesses Saturday, July 30 • 9:00 AM – 10:00 AM • Theater

Kevin Hartley, Chief Innovation Officer, Keurig Green Mountain

Karl Ronn, Managing Director, Innofolio

Simon McLain, Global Leader, Customer & Marketing Strategy, Principal, Deloitte Consulting LLP

Moderator

Tom Schoenwaelder, Chief Commercial Officer for Doblin, Principal, Deloitte Consulting LLP

Headline Verdana Bold Innovating with Consumer Behavior Going beyond product July 30th, 2016

Innovation and Behavioral Design: Going beyond product Copyright © 2015 Deloitte Development LLC. All rights reserved. 4

Meet Our Panel

Simon McLain Principal and global leader of Deloitte’s Customer and Marketing Strategy practice, Deloitte Consulting LLP

Tom Schoenwaelder Chief Commercial Officer of Doblin/Deloitte, Consulting LLP

Kevin Hartley Chief Innovation Officer of Keurig Green Mountain

Karl Ronn Founder of Innofolio

Innovation and Behavioral Design: Going beyond product Copyright © 2015 Deloitte Development LLC. All rights reserved. 5

“In more than 20,000 [product launches] since 2008, there have been 74 [breakthrough innovation] winners...”

…but 90% of these are Product Line Extensions.

According to the June 2015 Nielsen Breakthrough Innovation Report

Innovation and Behavioral Design: Going beyond product Copyright © 2015 Deloitte Development LLC. All rights reserved. 6

What isn’t CPG doing, and how can we catch up?

Innovate outside of product

Design for consumer behavior

Develop capabilities to innovate systematically

Innovation and Behavioral Design: Going beyond product Copyright © 2015 Deloitte Development LLC. All rights reserved. 7

Innovate outside of product

Network Connections with others to create value

Process Signature or superior methods for doing your work

Product System Complementary products and services

Channel How your offerings are delivered to customers and users

Customer Engagement Distinctive interactions you foster

Profit Model The way in which you make money

Structure Alignment of your talent and assets

Product Performance Distinguishing features and functionality

Service Support and enhancements that surround your offerings

Brand Representation of your offerings and business

Innovation and Behavioral Design: Going beyond product Copyright © 2015 Deloitte Development LLC. All rights reserved. 8

Harry’s: A polished shaving system sold by subscription...

7 TYPES:

Innovation and Behavioral Design: Going beyond product Copyright © 2015 Deloitte Development LLC. All rights reserved. 9

Design for consumer behavior… and learn from outside of CPG

Between Jan 2008 and Jan 2009:

• The U.S. auto market fell 37%

• U.S. Hyundai sales went up 14%

• Hyundai sold 435,000 cars

• <.01% of customers used the program to return their car

Innovation and Behavioral Design: Going beyond product Copyright © 2015 Deloitte Development LLC. All rights reserved. 10

Develop capabilities to deliver results systematically…

GOVERNANCE

PIPELINE / PORTFOLIO

MANAGEMENT INNOVATION

STRATEGY SENIOR

LEADERSHIP FUNDING

TALENT MANAGEMENT

EXTERNAL ATTRACTION

INNOVATION TOOLS

NON- / FINANCIAL REWARDS

PROCESS

INNOVATION METRICS

COLLABORATION

MANAGING THE PORTFOLIO

CONSTRUCTING, BUILDING AND SCALING INNOVATION

SETTING THE STRATEGY

FUELING INNOVATION

Innovation and Behavioral Design: Going beyond product Copyright © 2015 Deloitte Development LLC. All rights reserved. 11

Where do I stand… and what can I do?

Our Innovation Index maps innovation maturity of nearly

50 major CPG companies

This communication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the “Deloitte Network”) is, by means of this communication, rendering professional advice or services. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser. No entity in the Deloitte Network shall be responsible for any loss whatsoever sustained by any person who relies on this communication. Copyright © 2016 Deloitte Development LLC. All rights reserved.