Encourage innovation
Innovation can be an imperfect process. Shreiber found that
out firsthand a little more than a decade ago when J&J Snack
Foods — which garnered nearly $569 million in sales in fiscal
2007 — rolled out a line of oat-bran pretzels.
Oat bran was the “it” health food at the time, so J&J’s leaders figured they could get the company in on the ground floor of an emerging consumer trend.
But forces beyond the company’s control had other plans.
“We came out with the oat-bran pretzel maybe about 12 years ago,”
Shreiber says. “It tasted good, it looked good, we formulated it well,
put it in an attractive box, then we got it into the marketplace just in
time for it to be negatively impacted by the New England Journal of
Medicine, which said oat bran was overrated and didn’t deliver on
all the health claims attributed to it.”
J&J followed that up with a low-carbohydrate pretzel line introduced during the Atkins Diet craze of several years ago. Like the
oat-bran pretzel, the low-carb pretzels didn’t pan out the way
Shreiber had envisioned.
“We developed some pretzels with less wheat flour and other types
of formulation,” he says. “It looked good and was attractively priced
but just didn’t deliver on the critical element of taste.”
The moral of the story: Even a company that has had 144 straight
quarters of growth, as J&J Snack Foods has had during its nearly 36 years of existence, is still susceptible to missteps. But it’s
a necessary risk to take if you want to innovate as a company.
“We don’t encourage failure, but we do allow for the fact that,
now and then, every ball you hit isn’t going to go screaming
through the infield,” he says. “What we do is we discourage too
many excuses for why something didn’t work. We discourage
being stupid, and we discourage not working as a team.”
At J&J, ideas are allowed to well up from within the company. The
main conduit is a teleconference call every Friday morning that
includes members of the company’s management and the research
and development department.
Shreiber says the goal of the teleconferences is to move ideas
along as quickly as possible. New innovations do a company no
good if they are allowed to sit and gather dust in the company channels.
“We don’t want to sit and allow fresh ideas to become stale,” he
says. “We want to get them to an R&D center and get some samples
made by hand, in a lab, and have some product meetings.
“Oftentimes, there will be six, eight or 10 new products submitted
at a time, depending on the potential of the product and whether the
customer involvement is or isn’t there. We are working on ideas that
are three months out, and some [are] six and nine months out. But
all of our ideas have to pass certain rigid criteria in order to get
through our lab and idea-concentrated thinking.”
That criteria covers more than the marketability and customer
appeal of the product. Shreiber says that with any innovation
that might spawn a new product or service, you must first take a
long, honest look at your company’s capability to produce the
new item.
The first place Shreiber looks is at the financials. For an innovation
to make sense overall, it must first make sense financially.
“You go through the investment analysis, what kind of special
equipment it takes to do that,” he says. “From an introduction standpoint, you have to find out if you will be able to adequately produce
the product.”
If the idea makes sense from a production standpoint, you must
then find out if there is a demand for it. Shreiber says that requires
constant communication with vendors and customers as you take
the pulse of the market.
“Look, listen and communicate, and keep doing it until you’re
doing it almost 24 hours a day, seven days a week,” he says. “It’s
something we’re pretty good at, but we could always be better at it.”
At J&J, ideas that end up being presented at the Friday teleconferences usually have their genesis at the customer-interface level.
As J&J representatives speak with vendors, schools and other
places to which they sell the company’s products, the information
is fed upward in the organization — first to the regional level and
then to the national level. Along the way, ideas that lose steam or
otherwise run into roadblocks are usually filtered out. The ideas
that are acted upon are then fed back down through the organization for testing and feedback from end users.
Shreiber says innovation from a leadership standpoint is a balance
between sticking to your guns and remaining open to change. You
cannot stray too far from what your company does best, but you
can’t become so rigid that you choke off the creativity of your people.
“The great football coach Don Shula once said, ‘Always have a
game plan, but be prepared to change it at a moment’s notice,’”
Shreiber says. “You can’t be so structurally oriented that you appear
stiff-collared and buttoned-down. Some products are ready for your
aim, and as long as you have your sights set on that, you can move
on that. But you also have to stay on target.”