Chunking up Kit-Kat

A client friend, Kees Langerak, was appointed to be marketing director at Nestlé’s confectionery business in York.

After a couple of weeks, he called me: “This business seems scarcely to have innovated at all in years,” he said. “Fact is we are tremendously pushed for cash right now, so I really can’t afford to pay you. But would you do us a favour and advise me on what I might do about it?”

He knew that I had worked in the past extensively with what had been the Rowntree business and so knew the brands intimately. And he had always been an exemplary client!

“I’ll call you back in ten minutes,” I told him.

And this is what I advised: “Invite lots of people from around the business to come into one big room, and ask them to bring their favourite innovation idea that’s been rejected or ignored in recent years. Set the room up as a ‘street-market’ and enable everyone to display their nominations. And then pick out the biggest ideas that can be implemented quickly.”

Out of this simple exercise, in just a few months, came Chunky Kit-Kat. It doubled the size of that already massive brand.

Renovation and Corporate Culture

Skoda is of course a rather exceptional example of successful brand renovation (“Renovate or die,” 1 January 2010). Perhaps more realistic and valuable is the case of the great consumer goods giant, Nestlé.

Over several decades I’ve worked on a dozen or more of Nestlé's brands, getting to know the style of the company quite well. A couple of years ago I interviewed their Chairman, Peter Brabeck. It was he that recognised that renovation was a critical core competence of the business.

Nevertheless, there was even more they could do to ensure that their major brands and products stayed relevant to changing consumer needs and ahead of competition. So from the start of his period of leadership, renovation became a key pillar (alongside innovation) – and this has continued throughout Brabeck’s stewardship of the company.

He told me that he had first realised the importance of renovation very early in his career, when he was a young ice cream salesman. “It’s now a key driving force for our business,” he said to me. And from Kit-Kat to Maggi, that’s exactly what they did.

Is Nestlé the only major corporation to recognise so explicitly the value and power of keeping everyone focused on renovation? Certainly it seems to me that having it separate from, but parallel to, innovation is good and helpful to managers, making clear that both are vitally important to building sustained profitable growth.

And if you aspire to be truly world-class at renovation, it has to be a clear corporate priority, continuously activated, supported, communicated, recognised and rewarded by the top team.