Mauro Porcini joined PepsiCo a decade ago as its first-ever Chief Design Officer, overseeing the physical and digital expression of brands ranging from Pepsi to Gatorade to Quaker to SodaStream. Under his tenure, PepsiCo’s design team has racked up over 1500 awards for design and innovation.
Porcini has now distilled his philosophy into a new book, The Human Side of Innovation: The Power of People in Love with People, which hits the shelves in October. It features stories from his career at PepsiCo and 3M; thoughts on the importance of cultivating experiences; and explanations of how a group of keen observers can help set an organization apart. Porcini will be among the speakers on the mainstage at InnoLead’s Impact Silicon Valley conference in November.
Porcini spoke with us about balancing breakthrough and incremental innovation; the importance of observant, talented employees he calls “unicorns”; and the role that acquisitions can play in avoiding disruption from outside.
Balancing Incremental and Breakthrough Innovation
While Porcini believes breakthrough innovation is important, necessary, and possible, he said incremental innovation also plays an important role in most companies’ successes.
“Incremental innovation has a few roles. One is keeping your product refreshed and up to date. … People love to go to the store and see new stuff. There is that emotional need,” he said. “But also, through incremental innovation, you can tweak products and make sure that they’re perfect for the more functional needs of people, or [that] they adapt themselves on the basis of the context that the world is evolving and society’s evolving.”
He said that breakthrough innovation can be much harder for organizations to pull off — and requires a high tolerance for risk from the company. All internal innovation requires investment from the company, and breakthrough innovation comes with a higher cost.
The interest of the company is to [automate] as much as possible; to scale up; to reduce costs; and increase top line and bottom line.
“These companies are all about top line and bottom line. Any innovation is against the interest of the company — the interest of the company is to [automate] as much as possible; to scale up; to reduce costs; and increase top line and bottom line,” he said. “Luckily, companies know — and shareholders know — that you need to adapt your products… and invest in innovation. But incremental is safer, because it’s a lower investment… and it’s less risky. Breakthrough innovation is a major risk for all of these companies.”
But in a changing innovation landscape, Porcini said breakthrough innovation will soon become vital to stay alive. That’s partly because of the speed at which startups can move today.
‘We live in the age of startups’
Porcini said, historically, many companies had the ability to protect their brands and products because of barriers to entry, scale of production, communication, and distribution. He said that today, those factors no longer prevent others from entering the marketplace to disrupt large brands.
“We live in the age of startups,” he said. “Anybody out there can come up with an idea, get easy access to funding through platforms like Kickstarter.com, or through the proliferation of investment funds hunting for the next great idea, for the next startup.”
Funding is not the only barrier that has eroded. Porcini said manufacturing costs have decreased, culture has become more aware of and accepting of products from startups, and distribution has become less of a problem for emerging businesses.
“You can bypass traditional distribution, and you can go straight to your user to talk about your products,” he said.
Breakthrough innovation is becoming imperative.
Those factors pose a threat for more established companies.
“The big companies, they all need to converge with this new focus on the real needs and wants of people, and create something that is extraordinary for them. … Breakthrough innovation is becoming imperative. Either [companies] do it, or they’re going to have problems sooner or later. … Either they’re that competitor — they innovate themselves — or somebody else will do it on their behalf,” Porcini said.
Porcini said that while businesses need to remain aware of their strengths and their place in the market, they should focus more on what their users want, rather than hyper-focusing on competition with another company or brand. He said cross-functional teams should work on innovation activities that are laser focused on people’s wants and needs, not just on increasing profits.
That may lead to productive disruption of a company’s own product line.
Taking a Human-Centric Approach to Design
Porcini said understanding users’ desires and needs can be a difficult task, made easier by both data and people who have strong observational skills.
He said data can be a great tool for understanding people’s needs, but its real power comes from the people who can interpret the data into something meaningful and actionable.
We need people with empathy, people with curiosity — people that are there 24/7 observing the world; observing reality; reading books; traveling.
Porcini said having people who are keen observers can be critical to a company’s success.
“We need people with empathy, people with curiosity — people that are there 24/7 observing the world; observing reality; reading books; traveling. Every moment of the day, [these people are] thinking, ‘How can I solve the problem?’ They are identifying opportunities — looking at something where nobody sees anything, and this person is able to see an opportunity.”
Porcini calls these type of people “unicorns.” A large portion of his book focuses in on their thought processes and the value they can deliver to an organization.
“This is, for me, more important than any data, any information, anything — to find these people… the unicorns,” he said.
Acquisitions as a Mechanism for Disruption
Porcini said companies can disrupt themselves by innovating internally, but they can also use mergers and acquisitions to help.
In 2018, PepsiCo acquired SodaStream International, which allows users to make soda-style beverages and sparkling waters in their homes.
Since that acquisition, though, PepsiCo has built another new product in the SodaStream line, called SodaStream Professional, which can be used in an office, hotel, home, or otherwise. The product aims to please users who have interests in sustainability and personal health, two trends Porcini said have permeated culture.
The SodaStream Professional allows its users to carry a reusable, personally identifiable bottle that they can connect to an online account, and which communicates with the water dispenser itself. A user’s account tracks the impact of choosing not to use plastic, single-use bottles, and tracks hydration and personal wellness goals.
“This is an example of a machine that there is no competition [with]. There’s nothing like this out there that we’re competing with, so [it’s] this idea of trying to disrupt ourselves,” Porcini said.