Diageo's culture of innovation

Diageo, the global drinks giant, mixes its historic brands with innovative new formats, ingredients, and technologies - to do so, it has built up a culture of innovation and an expansive theory for developing rich seams of possibility in which to investigate and develop new ideas toward transformative new ideas. 

Why culture matters

The aim of innovation is not to work on a process of innovation but instead to install a culture of innovation, Guy Middleton, global breakthrough innovation director at Diageo told The Marketing Society Global conference in London. “You need to paint the picture of the future that you want [the organisation] to draw into.”

Diageo’s broad mission

The largest spirit maker in the world and owner of the advertising darling Guinness, Diageo’s mission is a broad one: “to shape the future of social celebration”. This is useful, as it goes far beyond just innovating on its core product and helps drive the brand toward thinking of new categories, business models, and consumption occasions that can unlock breakthrough growth opportunities

The future-back foresight system

Middleton lays out a general theory of innovation that helps Diageo to identify its “hunting grounds” for the next decade.

1. Probable future: this is the close horizon future that is broadly available according to major industry datasets (think: Euromonitor). But this is often too late in a category like Diageo’s in which some of the product takes months or years to age
2. Future shaping: Then, Middleton advises, start to look at “future shaping mega trends” or, essentially the big decade long trends that drive the future and are as close as trends get, or “the next level down” from rarely shifting human needs. 
3. Possible futures: Finally, stretch toward a range of possible futures - this is important to set out the broad range of possible futures with a wide scope. “Remember: strategy is about choices,” Middleton notes. “What are the choices you’re going to make?” 
4. Preferable futures: Create your preferable futures by aligning with a trend that you see potential in and which aligns with the business or brand’s objectives. The idea, he explains, is that it provides something to aim for rather than living in a random world of possibilities. 

In Diageo’s experience, this preferable future work led to the company developing three “hunting grounds”, defined as spaces in which the company can spend the next 5-10 years “mining.”

“Hopefully, where we are today will lead to a preferable future and that will lead to the rise and it gives you that strategic direction.”

How to put innovation into practice

Take risks, test, learn & pivot: or, more brutally, “pivot, learn, and kill”. But Middleton also stresses the need to learn lessons from small successes and understand how they can develop. For instance, an augmented reality experience, “Bartend.ar” which used the camera based technology to teach cocktail recipes, flowed through from the proof of concept to a retail activation, to an ad campaign. Culturally, he says, there has to be a comfort to fail as well as to learn and develop

Collaborate and partner, rather than build new things. This enables access to the very best startups who are focussed on building and likely do it better than a large organisation tuned to service its core business. Middleton cites the printing technology that has led to a worldwide technology: the Guinness “stoutie”, based on a collaboration between Diageo, the brand owner, and Ripple, the printing tech providers

Think about Platforms not projects - projects are often like “little boats” in a huge and dangerous ocean. “You need big platforms that are going to drive you towards that future,” so that the idea can continue even if the project ends. Middleton gives the example of the ‘What’s your whisky’ interactive experience, which quizzes people to find their ideal flavour profile. 

The bigger platform idea was to use an algorithm that can guide consumers thorugh new occasions, new categories, or to a “connecting ecosystem” to connect with retailers and bars.

Reported by SPT