“Listening to end consumers enriches the strategic innovation portfolio of a B2B company”

Dr. Hilmar Klink, Consumer Innovation / Concepts, New Business Development & Innovation at Evonik Nutrition & Care GmbH

The innovator’s roadmap: Listening, empathizing and creating

Innoboard: There is no generally applicable definition of innovation. Every industry and every department conceive it differently. How do you define innovation at Evonik Nutrition & Care GmbH? 

Dr. Klink: For this purpose, it is important to understand that we are very close to the beginning of the value chain. Evonik is one of the world´s leading specialty chemical companies. Our Nutrition & Care segment contributes to fulfilling basic human needs with applications in everyday consumer goods as well as in animal nutrition and health care.

Thus our portfolio comprises products for diverse markets like consumer goods, nutrition or health care. For example, you will find us in the fields of cosmetics, body care, hygiene products, laundry care, diapers, nutrition, furniture and bedding, and also sportswear. We are active in many markets. But we always develop the specialty chemicals and not the end products for the consumer.

Consequently, for us an innovation is mostly technically and chemically based… at least to a large extent. When we develop a new capability or property of a substance, we are talking about an innovation.

How do you know which technical property you want or need to develop?

For a long time, the process was as follows: Everything begins with the end consumer having a need. An OEM recognizes this need with the help of market research and wants to offer a new applicable product. To manufacture this new product, a chemical ingredient with certain properties is required. The OEM therefore approaches Evonik with these mostly technical requirements, and Evonik launches an internal development project.

The point is, there is a significant distance between a specialty chemical company and the end consumer. The OEM has a particular understanding of the consumers and shares this information to a certain extent.

This is sufficient in most cases. However, we as specialty chemical company always have to act on relatively short notice. What we are missing here is a deep understanding of end consumers, their motivation, needs and market trends. But this in-depth understanding would empower us to act more proactively towards our B2B partners and to support their innovation activities on an even more long-term level.

What solutions do you have to confront these problems?

We established a new consumer-centric innovation approach about 3 years ago that deals with the end consumers and takes them into consideration. The findings are then fed into our R&D and strategic marketing workstreams and enrich our innovation portfolio.

Thereby, a completely new perspective arises for us. Before that, we developed a chemical that is, e.g. rudimentarily better in terms of applicability. Now, the motivation is that the end consumer wishes to spend 2 minutes less in the bathroom in the morning. This results in a whole new approach and a much broader solution space within his routine.

In this context, we had to redefine innovation for ourselves. Suddenly, the new dimension “consumer needs” has gained importance and the term innovation refers to the solution of a consumer problem or need.

With our new approach, a third party joins the classic duo of consumer and OEM. We are convinced that this is a win-win-win situation. The consumer gets a better end product, the OEM can innovate even better, and we are perceived as more proactive and innovative and have a long-term perspective.

How do you approach consumer research? 

For us, the process consists of three steps: insights, ideas, and concepts. Our methodology is to gain insights from consumers, to generate ideas, and to formulate concepts. This applies to most of our projects and markets.

An insight is the understanding of a problem or a need of a specific consumer group. Insights form the so-called problem space. In the idea phase, we generate ideas that should solve the problem. These ideas are solution components in different fields (technical, chemical, design, etc.). As a whole, this is the solution space. Subsequently, the problem space and the solution space are merged, and the ideas are bundled into product and business model concepts and provide a decision basis for the next steps.

This approach is based on that of the OEMs. We now get into substantive discussions with the OEM much faster, because we no longer have to argue whether the results were generated correctly and turn out to be relevant.

How do you generate insights? 

Our goal was always to gain a deep understanding of the end consumer instead of a superficial understanding of the masses. Thus we focused on qualitative market research in order to detect hidden and implicit consumer needs. In our context, conventional quantitative market research unfortunately helps to discover space for innovation only to a limited extent.

Therefore we opted for ethnography as our key exploration method: in the sense that we accompany the consumer, we sit next to him in the bathroom in the mornings, we look at what the consumer does exactly with which products. Every small step is important to us. After the observation, we ask the consumer about the process to see whether “he really walks his talk”.

You notice that the observation often does not coincide with the face-to-face interview. Small steps (unconscious steps) are often omitted unintentionally or intentionally (due to social pressure or the like) from the answers during the interview. Many distortive effects occur during the interview, and, therefore, the combination of observation and face-to-face interview is very important for us. This opens a vast space for innovation for us.

We also use the analysis of certain blogs or posts on specific topics. This is another exciting way in which you can explore needs and consumer preferences.

What barriers does this approach encompass?

The generated insights are typically worded in consumer-specific expressions and idioms. We at Evonik, however, have a very technical and chemical wording.

An example is a project concerning mattresses: We asked the consumers what is important with regard to mattresses. The answers could be summarized as “comfortable to lie on” and “hygiene”. Then we went to our chemists who responded with the question “what does “lie comfortably” and “hygiene” mean in a chemical sense?” So, in the next step, we had to translate the needs of the end consumers into technical and chemical properties and requirements.

After ideas have been generated and concepts developed from the insight, what are the next steps?

We test the concepts with the end consumer. The basic question we always ask ourselves is “will the consumer accept the solution and would he also purchase it?” In the consumer survey, we must translate our concept back into the consumer wording. For this purpose, we formulate a consumer concept.

This consumer concept has very specific building blocks: The insight, the benefit, the reason to believe, and the claim. The insight is the part that comes out of the ethnography research. With this, the consumer feels picked up. The benefit describes the properties and benefits of the new product. The reason to believe is the technical and chemical reasoning for why the product has these new properties and benefits. The claim may be a catchy slogan or the like.

You expose the consumer to several of these consumer concepts, and then they decide whether they like the concept, buy it, or have suggestions for improvement. With these consumer opinions, we go to our decision makers and make a recommendation.

The result is the start of a new development project.

Do you collaborate with the OEMs or other partners when generating ideas?

In the scope of our projects, we found that in some cases this entire process can take quite long. Therefore it makes perfect sense to coordinate with the B2B partners in order to reach a solution faster within the framework of workshops where the end consumer could participate, too.

How high is the acceptance at Evonik Nutrition & Care in terms of new solutions such as those we have just discussed?

At Evonik Nutrition & Care, there is a general openness, and new approaches are always of interest. And moreover, there is also always a willingness to take on new approaches.

It gets really exciting once the initial results become available. Especially if the results are more radical than usual. That is when a sponsor is needed in order to formulate a project. This is where the decision as to whether or not the project should be launched is made. It is important that not every project is accepted. Every business needs a functioning system to prioritize and select all concepts and projects.

 

Hilmar works in the NBD team at Evonik Nutrition & Care GmbH. The team´s novel approach focuses on ethnography-based end consumer exploration leading to new product concepts and aims at strengthening co-development activities with Evonik B2B customers. Therefore Hilmar´s work comprises both managing consumer-centric innovation projects and designing appropriate organizational processes, methods and tools for leading consumer insights into proven new product concepts.

Before joining Evonik, the innovation passionate started his vita activa in the field of innovation research (working for Fraunhofer-Gesellschaft and writing his PHD thesis at TU Dresden), then moving to innovation consulting (with focus on consumer research and product conception) and later working in the innovation strategy department of E-Plus Mobilfunk.

Hilmar studied Wirtschaftsingenieurwesen at Universität Kaiserslautern (Germany) and Università Perugia (Italy). In his vita contemplativa, he likes heist movies, adventure tours and jazz´n soul music. 

 

ILI CONSULTING AG thanks for this interview.