Hershey chocolate company’s InnovationOps story
I am interviewing speakers at my favorite annual conference for product managers, the PDMA Inspire Innovation Conference. This discussion is with Shawn Houser-Fedor, whose session is titled “Creating a Recipe for Innovation Success: Hershey Chocolate Company’s InnovationOps Story.”
Shawn is a R&D Senior Director at Hershey and she is about to share with us how InnovationOps helped Hershey and can help your organization achieve innovation at scale.
This episode is sponsored by PDMA, the Product Development and Management Association. PDMA is a global community of professional members whose skills, expertise, and experience power the most recognized and respected innovative companies in the world. PDMA is also the longest-running professional association for product managers, leaders, and innovators, having started in 1976 and contributing research and knowledge to our discipline for nearly 50 years. I have enjoyed being a member of PDMA for more than a decade, finding their resources and network very valuable. Learn more about them at PDMA.org.
Summary of some concepts discussed for product managers
[2:55] Most of your professional career has been at Hershey, and this is not unusual for Hershey employees. What is it about Hershey that keeps employees for long periods of time?
I like to say that Hershey is the sweetest place on earth to work and live for many reasons. The people we work with are the people we see outside of the office. We share a mutual respect for each other. Hershey offers a wide portfolio of products and numerous career development opportunities, so you have an opportunity to learn, grow, and develop into whatever you want to be.
[4:47] What is InnovationOps?
InnovationOps is all the behind-the-scenes work that goes into bringing great products to market—the people, processes, culture, and tools. InnovationOps at Hershey started with R&D and marketing working together. They owned every aspect of innovation other than bringing it to market through sales and commercial organization. When innovation started to grow and get more complex, we realized we were taking people like food scientists and candy confectioners outside their comfort zones. They have different skills from our marketing team members, and neither were well versed in product management. We found by having a group dedicated to innovation, we can bring together the right people to operationalize innovation.
[6:51] What outcomes have you seen from using InnovationOps?
There are three big takeaways:
- We are much more efficient with our resources, including time, money, and people.
- We’ve seen better cross-collaboration across the business and better partnerships.
- We’ve seen great business results. We have fantastic new products that are sustainable in the market and great innovation.
[8:19] How has InnovationOps helped with alignment between different groups?
Everyone has a seat at the table, so ideas can come from anywhere—engineering, product development, sales. If it’s filling a gap, we know it’s going to be successful. That mindset allows everyone to be very collaborative and get behind an initiative to make sure it’s successful in the market.
We have specific values that drive our culture:
- Be real.
- Champion the consumer.
- Create the future.
- Take action.
[10:09] What are the jobs that InnovationOps is trying to accomplish?
The portfolio and project management group within the innovation operations team hold people accountable by making sure they have all the necessary information pulled together before a governance meeting. They make sure all the people present understand what the stage-gate process means to our overall business. They do a fantastic job of holding people accountable to all the company’s goals.
Each person has the same innovation goals. For example, if there’s a financial metric related to innovation we need to deliver for the year, everyone understands that’s a holistic goal. Even when there are controversies in which one function doesn’t think the product should go further through the gate process, each one of us has an obligation to figure out a solution to ultimately deliver that financial target.
[12:06] How does the stage-gate process work?
The stage-gate process starts with an idea, which can come from anywhere within the organization. The first gate is all about resourcing, assessing the commitment of the entire organization to allocate resources to the idea. The key considerations include the idea’s scale, feasibility, and potential for execution. Once alignment is achieved on resourcing, the process moves on to evaluating consumer demand and the potential impact on top-line revenue or bottom-line profits.
Then we assess technical and operational feasibility. It’s crucial to ensure that, beyond consumer appeal, the product can be produced and distributed profitably at scale. The team works on vetting the feasibility of scaling the product from small-scale development in our kitchens to mass production on a manufacturing line.
Then we decide as a company, cross-functionally, whether to invest in and move forward with the idea. This decision involves collaboration across departments. Then the sales team is engaged to sell the product to our customers.
[15:58] What benefits have you seen from an information management system?
We started using this tool right before COVID, which is probably one of the big reasons we were so successful during COVID. We were able to connect through the tool. We could all see the same information, so we didn’t have to go digging for it in different places. When we had our governance meetings, we were working out of that tool, which allowed us to align.
[16:54] How do you manage 900 innovation projects at the same time?
Not that many projects are launched in one year. It’s a pipeline over 2-5 years. Some projects are really simple and relatively easy to execute, and some will take more time and investment of resources. We have 900 projects over a period of time, and project managers take a group of those projects through the process. We are successful because people know how to do their jobs most efficiently and we spread them across those projects.
The stage-gate process helps us prioritize because sometimes it takes a month for a product to go from gate one to gate two and other times it takes a year. We have all that data in our information management tool to help us analyze the pipeline.
[19:21] How do you schedule reviews?
We meet twice a month, but we don’t review every project every month. Pre-reads are available in our system three to four days before the meeting. We also have pre-approvals. Unless there’s a conflict to discuss, we sign off before the meeting. We typically only review a subset of all the projects. A lot of that information isn’t discussed in the meeting, but it will be captured in the tool and through a bi-weekly email sent out after each meeting.
[20:56] How do you contrast InnovationOps with dev ops?
There will always be tension between divergent and convergent ways of working. The best innovation must be able to do both. You have to diverge to get different perspectives earlier in the process and later converge on a decision. You come together and operationalize what will be the best decision moving forward.
[22:15] What is a good starting place for companies starting to get into InnovationOps?
It starts with leadership. Get your business owners and commercial leaders to buy into InnovationOps. They have to realize that innovation is an important growth lever for their business, and they bring cross-functional team members together.
Action Guide: Put the information Shawn shared into action now. Click here to download the Action Guide.
- Connect with Shawn on LinkedIn
“Innovation is a team sport.” – unknown
Thank you for taking the journey to product mastery and learning with me from the successes and failures of product innovators, managers, and developers. If you enjoyed the discussion, help out a fellow product manager by sharing it using the social media buttons you see below.