Corporate Innovation

How Nestle Found Millions in Savings Right Under Their Noses

Olivia O’Sullivan
Sep 14, 2020
min read

When it comes to Enterprise Innovation, a lot of conversations hinge on “sexy” topics like partnering with startups and building new business lines. Other conversations focus on solving for external threats and opportunities. While both of these are incredibly important, there are often massive opportunities for innovation within the organization just waiting to be uncovered and solved. 

On top of net-new partnerships or builds, innovation leaders should always be on the lookout for latent innovation, meaning opportunities that already exist within the organization but need to be uncovered. These projects can’t be found by looking outward. Instead, leaders should analyze internal data and ways of working to see what could be lurking beneath the surface. 

During the research process for our enterprise innovation playbook Stories from the Trenches: Sustainable Innovation in the Corporate World, we interviewed innovation leaders from multiple global corporations, including Orchid Bertelsen at Nestle. During our conversation, Orchid shared how Nestle leveraged a latent innovation discovery process to find a huge innovation opportunity - one that led to millions of dollars in savings.

The latent innovation discovery process

Broadly speaking, there are two ways to identify latent innovation opportunities: 

1 - Push innovation: A problem or challenge is pushing the company to think differently. You can uncover push innovation opportunities by: 

  • Collecting P&L-owner problems 
  • Empowering front-line workers to report the challenges they see day-to-day
  • Looking for anomalies in regular customer interaction data

2 - Pull innovation: Identifying innovation opportunities for the company based on a 1-3 year horizon. You can do this by: 

  • Analyzing what you’re already capable of to meet your relevance goal
  • Identifying which existing problems pose an existential threat to your relevance 
  • Looking at what new innovations are in the market that could help you

In Nestle’s case, Orchid and the team found a push innovation opportunity with Toll House. 

Finding latent innovation at Nestle

Orchid’s job is to help Nestle, a company founded in 1866, stay relevant in the 21st century. The company was already working on external innovations around ecommerce and partnerships, but that didn’t necessarily solve every problem the organization faced.

One particular problem came to light internally was around Nestle Toll House, the company’s famous chocolate chip cookie product.   

“Nestle pretty much invented the chocolate chip cookie,” said Orchid. “And we had a lot of support calls about the recipes and how to use them.”

The key challenge became how to handle the increased customer support requests in a way that provided the same quality and customer experience that Nestle buyers were used to.

After the challenge was uncovered, the team brought a lot of solutions to the table. The first and most obvious solution was to hire trained chefs to answer support calls. That way customers would get the same high-quality service they were used to from Nestle with the same method as before - calling. Nestle was looking for ways to do this scalably and affordably, but it became clear that hiring a team of chefs would be significantly more expensive than hiring standard customer support professionals. In total, this solution would cost Nestle millions of dollars per year. 

“Serving all those customer calls would have required a staff of chefs, which would have been very expensive,” said Orchid. “We saw an opportunity to innovate.” 

Building for the future

In response to the customer support data and realizing that hiring chefs to be support reps was unsustainable, Orchid and her team looked to technology. Ultimately, the team built an AI-based chatbot and FAQ system that could handle a significant amount of support requests. 

With this new tool, customers could get answers to the most frequently asked questions about Toll House cookies in real-time, which not only helped reduce call volumes but also provided a great experience to Toll House bakers. From there, Nestle’s customer support reps were trained on some of the more complicated questions that had been asked, so if a customer did end up calling they would still receive the help they needed. 

The result was a better customer experience and saving millions of dollars per year - all by finding a latent “push” innovation opportunity.

Look for opportunity everywhere

Innovation is not just the process of partnering with a startup or using the latest technology. It’s fundamentally about creating something new that helps the organization move forward. In Nestle’s case, the innovation team created something new to solve a problem before it became a major issue, leveraging the latent innovation discovery framework. 

Once you have the right issue or problem to solve, then the fun begins with building, partnering, or hiring to get the job done. However, it all starts with uncovering the opportunities, many of which already exist in your organization.

To get inspire by more success stories from global CIOs, check out our enterprise innovation playbook Stories from the Trenches: Sustainable Innovation in the Corporate World.


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