Podcast

Lauren Stiebing 24 September 2019

Winning Through Strategic Innovation with Cecile Budge

Now more than ever, the line between a successful business and one that struggles has become a foggy frontier. Digitalization, personalization and technology can make the most successful company models outdated in less than a decade. Having the ability to adapt to ever-changing landscapes and adjusting to the newest social trends are some of the key factors to thriving in today’s world. To understand how to make this happen we have invited Cecile Budge. With over 20 years of experience in the FMCG and Personal Care industry, Cecile has led both P&G’s mass and prestige beauty businesses, and then more recently headed up the UK business at Shiseido.

Topics covered in this podcast:

  • The importance of strategic innovation
  • How to strategically innovate
  • The Who, What and How of Strategic Innovation
  • What are the typical barriers to innovation and how can you overcome them as a leader?

[Music]

Lauren:

Hi I’m Lauren Stiebing and thank you for joining us today on the career success podcast. Today we’ve invited Cecile Budge. Cecile has had a long career at P&J where she led both Mass and Prestige beauty businesses and then more recently heading up the UK business at Shiseido. Cecile will be starting a new role shortly, still in the beauty sector where her passion lies. Today we’ve invited her here to discuss a very exciting topic: strategic innovation. Cecile, thank you for joining us today on the Career Success Podcast!

Cecile:

Lauren, thank you very much for inviting me. It’s a pleasure!

Lauren:

So, yes, as I was mentioning in the introduction, we’re going to be discussing a bit about strategic innovation. From your perspective, why is strategic innovation important?

Cecile:

Well, great question. I’m very passionate about strategic innovation. As I see it, in every sector or ecosystem – as I like to imagine it – that you’re operating in, there are market forces at play and the value that’s being created – so when I talk about value I mean basically profitable growth, which is what all we are trying to achieve as businesses –, that value continuously migrates and moves around. And often it happens very gradually, which is the tricky thing. Sometimes, it can happen quite dramatically. A really good way of thinking about it is like this: everyday you get up in the morning, on that day somewhere, one of your consumers, shoppers or stake holders, so whoever is having an effect on your business, will have slightly changed their behavior. Like in a minute way, but it quite happens every day. So, after a while, the change veils and becomes obvious. And key as a business is not to leave it too late and to be proactive in seeing these changes early on so that you remain competitive. And what that means? It’s that it’s really hard work to be a business because you have to continuously tweak, refine, and sometimes to have the courage to radically change your business model to thrive.  And at the core of this, there is strategic innovation. And strategic innovation is about making choices about how to best create value. And I’ve used to word “choice” here, and that’s an important word and distinction because it means that you’re deciding to do something instead of something else to create value. Not in addition or on top, it’s instead, which makes it much harder for businesses to just do it because you have to have the right conversations and the courage to go ahead with plan A instead of plan B.

Lauren:

Sure. And it’s a very big challenge for all companies with such a fast-changing world that we’re living in now. How do you think you can strategically innovate in your business as the landscape changes? Could you give us some examples?

Cecile:

Yeah, great question. So, a while back, I was actually given a framework to help me with this. And, as most frameworks, it’s really simple but really powerful. And I tried to use it all the time, it’s actually imprinted in my brain and I tried to use it daily. Basically, what it does is that it defines you a business model as being about the who, the what and the how.

Lauren: And in terms of who, what, and how, could you walk us through a bit of what you mean by that?

Cecile:

Sure. So, “who” is all about who is your target customer in your business model and in the business you’re operating. “What” is about your value proposition to them. And the “how” is how you’re choosing to deliver this proposition. Basically, how you’re going to go to market on your brand. And the skill is to rethink or revolve or tweak across the who, what, how access as you see the market change; and to redefine boundaries, so to think about the who, what, how differently, in a way that few others are considering or doing right now to drive your point of difference. And this sounds a little bit theorical and actually, you can really bring it to live with some examples. So, I’d be very happy to give you examples of real innovate as I’ve seen them from the past five years in the beauty, caring industry which obviously I know about.

Lauren:

Sure, that would be great!

Cecile:

Let me give you an example of a brand that I think did a great job of redefining the who – i.e. the target customer. And that would be MAC Cosmetics, so huge brand that most people will have heard about. Make-up brands historically would have focused on talking to the end consumer – i.e. people like you and me. And, MAC chose to do things very differently. They were the first compelling artistry brand in the market. And, basically, instead of focusing on the end consumer, they decided to set their entire business model around the make-up artist, who serves the end consumer instead. So, they created a brand proposition to the consumer that was completely new – compelling and very credible – and thereby they created a lot of value. The MAC make-up artist became highly visible, colorful and a powerful tripe that you inspire, educate, and transform your beauty look. The brand communication, offering in touch points was fully reflected, you know, this choice of putting the make-up artist at the center. And, to be clear, artists like that did not exist before in the category. You just really had discreet beauty consultants. So, MAC was hugely successful for many years with that point of difference. And, what’s a little bit sad is that, you know, MAC didn’t continue to evolve that point of difference and kind of stayed put as new entrance came in to take a share of the pie, which is why now they are struggling a little bit with growth, and that being a challenge.

This is again another important point. This can happen with leading brands, and actually, you know, often happens with the leading brands. The competitive spirit can erode when, actually, you should really stay healthily paranoid, because that bundle of value in the market place you’re operating continuously moves, and you need to be on it all the time.

Lauren:

Yeah, and was there a defining moment or a point in time where you could see them not innovating? Or how did you see it from the outside looking in?

Cecile:

Well, what was interesting is that at the time I was working on other artistry brands that were starting to really grow and that were taking elements of the MAC business model – because people could see that that was what people were really engaging with -, and it was interesting to see that as you had new brands actively growing in the market and taking some of that share, that nothing obvious was happening  at their end, they weren’t really trying to evolve and move that business model on. They were just trying to keep on communicating louder and bigger but using the same message which clearly doesn’t quite work if you’re trying to, again, evolve and drive your point of difference.

Lauren:

And, moving on to rethinking the “what”, do you have any examples for us there?

Cecile:

Yes, I think there’s a great example there which is Charlotte Tillbury, again most people will have probably heard of Charlotte. This is a really interesting one because people would argue that Charlotte Tillbury is a makeup artist brand too, because Charlotte is a professional make-up artist. But where Charlotte was very smart is that she positioned herself very differently as a make-up artist. So, she focused on demystifying make-up and giving the consumers solutions; so, she was solutions-based, which nobody else had really done well. She offers ten looks that she has made it easy for you to create at home with a simple curating range that she has sorted out and that you can really trust. And this was very different to MAC, where, if you’ve ever gone to a MAC store, there are walls and walls of products, and that’s a little bit intimidating and it’s kind of part of the business model: it’s supposed to only make sense to you as a consumer if you engage with the artists and get their help. But not everybody wants that. So, you know, Charlotte turned that completely on it head and said ‘well I’m going to give you simple solutions but with a huge amount of credibility because I am a makeup artist’. And she also put a face to the brand, being a highly compelling and a very visible ambassador of her brand.

Lauren:

And, finally, let’s look at an example about rethinking the “how”. What can you share with us there?

Cecile:

Yes, so, again, there is another great example out there, in that Huda beauty. And by the way, once you get used to this framework and this model, you can see for yourself what’s happening in the market and you can work out how some of the winning competition are wining. You can go ‘ah, they were really smart on the how’, or ‘they were really smart on the who’. And it really helps you then became a better leader yourself: you can do the same on your business. But Huda really focused on the “how”. So, again, you know, instead of meeting makeup consumers need through range, innovation, artists, stores, solutions, like most other brands had done, she focused instead on engaging with whoever was happy to follow her on social media on the transformative powers of makeup, primarily via Instagram. That was her main handle that she used. And, at the core of Huda Beauty, is emotion, a kind of tribal engagement, and education. And she has great credibility because she recommends many other brands, not just her own line, and that was very unique in the market – nobody else was doing that -, but with a heavy focus on direct consumers, with a bit of a live style tone in the way of what she offers, and, also, centered around trivial education, versus taking the more traditional brand building routes. So, again, that was very innovative on her part, and, as a result of that, Huda Beauty now is obviously a massive brand. Mostly directed to consumers, so she has done a great job.

So, in summary, you know, there is three examples I think really help you to see that having regular conversations in your business around the who, the what, the how, based on emerging trends, to help you to work out how you can best drive your point of difference, because there are some trends that you’ll pick up and you’ll go ‘I can see that, but that’s not going to be right for my brand, so I’m not going to connect with that trend’. But there are other trends where you go ‘wow, if I move fast, I could really make this big because it kind of fits with the core DNA of what my brand stands for’.

Lauren:

Sure.

Cecile:

And you have to do that, you know, pretty much all the time if you want to continue to deliver profitable growth.

Lauren:

And what are the typical barriers to innovation and how would you suggest to overcome them as a leader?

Cecile:

Unfortunately, there are many barriers, right? Because, innovation is driving change, and change is a very hard thing to deliver in a business. There are probably three main ones for me, but I know there are more. But, for me, the ones that I’ve seen as very meaningful and as killer-behaviors in businesses, one is: most of us will have a KPI dashboard, you know, we have Key Performance Indicators to really help us really keep the finger on the pulse with tin regards to the business. It’s very important that in your dashboard you also have forward looking KPI’s. Either you start tracking, you know, you look out forward looking inside in data, so that you can pick up and keep in touch with new trends as well as current businesses. So, let me give you an example. So, in beauty care, you know, everybody is talking about CBD right now. Well, eighteen months ago, if you were an innovative business, you would have started to pick up that there were quite a lot of conversations around the CBD ingredient and whether that could be part of the wellness journey in beauty. You know, a good business should really track that by social listening, the number of new entrances, the size of markets… you could choose a couple of KPIs that you put on your dashboard to just stay close to that emergent trend and decide whether, you know, that’s going to be meaningful for you, and whether you should move quickly or not. And then that really helps you to stay organized and stay ahead of the game.

The second one is lack of focused decision-making. And what I mean by that is I’ve worked with many people in many businesses where people talk about plans and the to-do list, versus the choice that they are making, and there is a big difference there in terms of the focus that that drives. So, key to go decision-making is to look at every decision as a choice, and that means that something else has to go, and not just the plan which can just be a long to-do list that grows, which can just really kill the focus and the innovative spirit. The other piece that drives lack of focused decision-making is having really big, onerous, annual budget meetings, because what then that drives is a behavior of ‘I will do the for-work properly about where I want to take my business next’ once a year. And it’s going to be really hard work but then we stick to that plan for the next 12 months. And that kind of kills the agility and the ability to tweak, refine. So, having business reviews and budget processes that are agile and nimble and that can help with speeding agility of decision-making is really important. And certainly, some of the bigger businesses I’ve worked in, they struggle with that because the processes are so big and onerous.

Lauren:

 Sure.

Cecile:

And then finally, it’s also question of culture: a culture of embracing change. And, again, that’s sometimes very difficult to make happen in your business. If you’re a start-up it’s very easy, but if you’re mid-size of big-established businesses it’s difficult. So, building a diverse team around you with the right skills, based on current but also forward looking KPI’s, will help you to create the right innovative culture, and reduce what I call unconscious bias, which is a really big thing that people that have been around for a while tend to have and they don’t realize that they have it. And we all have it which is ‘well, we’ve always done it this way. This is how the business model works.’ And what you need is people in your team that will go ‘but, why can’t we completely rethink the who? Why can’t we rethink, you know, the what or the how?’. So, having a mixed group of talented individuals with all the different experiences and styles I think can be a very powerful thing.

Lauren:

Well, Cecile, thank you for joining us. I’ve really enjoyed your input on strategic innovation and really provided some great examples from the beauty industry.

Cecile:

It was my pleasure. I hope it helps. Thank you for inviting me.