by Aaron Lazenby, November 2016
Andrea Simone has worked in the consumer goods industry for a long time—and has seen a fair amount of disruption and transformation along the way. After spending two decades working in the global business services organization for Procter & Gamble—ultimately serving as the chief enterprise architect—in 2011 his experience landed him the position of chief information officer at NBTY, a global health and wellness company based in Ronkonkoma, New York. With more than 22,000 branded and private-label products (including Balance Bar, Nature’s Bounty, and Pure Protein), NBTY was a key player in a dramatic shift in the consumer packaged goods industry.
Along the way, Simone has gained some important insight into what it takes to thrive in a changing market. “Our industry is one where innovation is extremely critical to maintain the freshness of our brands in the consumers’ eyes,” says Simone, who assumed the title of chief business transformation officer at NBTY in 2015. “So for us, becoming more intentional in addressing consumer wellness with better, more scientifically-driven products is obviously a very important priority.”
As part of reaching that goal, in 2014 NBTY chose Oracle Innovation Management Cloud Service as a collaborative innovation platform to help managers organize and develop new ideas within the organization. Here, Simone talks to Profit about NBTY’s dramatic makeover during the past few years, how Oracle has been an integral part of that transformation, and the new products that are now launching in markets across the globe.
Profit: You joined the company in 2011. What was NBTY like then?
Simone: NBTY was a public company founded in 1971 by Arthur Rudolph, who turned the company over to his son, Scott Rudolph, in the 1980s. He grew the company beautifully over the next 30 years from a US$70 million company to a US$3 billion company.
In 2010, right before I joined NBTY, the private equity fund The Carlyle Group bought the company. As part of that privatization, there was a plan to strengthen the capabilities of the company and redesign a lot of its processes as well as its go-to-market strategies.
This was necessary. NBTY had been a family-run company for many years, and while there was tremendous focus on entrepreneurship, acquisition, and top-line growth, there was less attention paid to building the company’s capabilities or integrating its new acquisitions. When I joined, we were dealing with basic systems, legacy systems, or in the case of supply chain planning, systems that did not exist at all.
In 2012 we started a broad IT-enabled transformation, focused on creating or upgrading most company capabilities. Eventually, in 2015, we expanded our focus with the creation of the business transformation office. We wanted to bring all the transformations we were working on under a single umbrella, working specifically on processes that touched more than a single business entity, such as rationalizing our SKUs across our entire company portfolio to streamline our supply chain management.
Profit: What role did innovation play in this new strategy?
Simone: Our focus on innovation came around the time that the company was acquired by The Carlyle Group. We were part of a trend that was going on throughout our industry: There is a lot of growth in the health and wellness category versus some of the other consumer product goods–type categories, and big companies were starting to acquire entrepreneurial companies, such as ours. This meant the battlefield changed quickly. There was a lot more competition, and we could no longer afford to be a fast follower. We had to be a company that really led innovation.
One of the first things we tried to do here is instill a culture of innovation, both in our products as well as in our internal capabilities. We started thinking about aspects of our business, such as product lifecycle management. For the first couple of years, we were not thinking about this from an IT standpoint, but rather asking how we even measure the new products and understand how well they are performing in the market.
We wanted to instill in our company culture the idea that innovation doesn’t happen in one organization, or in one person, or in a few elite people. It actually happens across the whole organization. That’s why we created a program called Ignite to drive innovation throughout the company.
The biggest piece of this program was that we delivered a stage-gate process for innovation. We created a funnel that moved through every phase, starting with determining if there’s a market for a product, then moving to design and all the way through supply chain requirements to marketing strategy, and finally looking at sales and how well the product did. Creating an intentional process helps us decide what to launch so that initiatives that hit the market have a higher chance of success. We focused on building out our business capabilities before we moved on to enabling our organization with the right tools.
Profit: What drove your decision to choose Oracle Innovation Management Cloud Service?
Our industry is one where innovation is extremely critical to maintain the freshness of our brands in the consumers’ eyes.
Simone: This wasn’t the first Oracle product we selected. We actually became an Oracle shop in 2012, signing on for the full cloud roadmap. We began with sourcing in the cloud because we needed to show strong speed to value, and procurement was a great way to demonstrate this. Since then, “cloud first” has been an important part of our IT strategy, and we’ve been strong partners with Oracle for the past four years.
When we look across our different portfolios and determine what our needs are, we look at Oracle tools first to solve them. That was the case with the innovation management tool; we had a need, and we heard about Oracle Innovation Management Cloud Service both from our Oracle salespeople as well as from a third party we worked with who is strong in innovation management. We were one of the first companies to use the solution.
With this tool, we were able to get a much wider range of ideas than we would have otherwise, and still bring them into a single place. Just think of an old-fashioned physical suggestion box, and the very long path an idea would have to take before a decision-maker at the company could do something with it. Now we have a tool that is engineered so that good ideas are in the right place. The right information gets to the appropriate people, and lets them put more meat around the bones of the idea, and then finally come up with an assessment.
Profit: What innovations have you brought to market using Oracle Innovation Management Cloud Service?
Simone: We’ve created new packaging for our Sundown Naturals brand, which is a line of herbal supplements. And we’ve brought in new flavors of our Balance Bar energy bars to market. And we have even created a new form for this product: Instead of a single bar, it’s actually divided into two parts, because we found that many consumers like to eat half the bar and then keep the other half for a second snack later in the day.
Also, for the first time in the history of our company, we’ve started to measure the success rate of these products. Before, we didn’t know how good or bad the results were, so it feels good to get this data right from the start.
Profit: What kind of goals are you striving for next?
Simone: For now, we need to continue focusing on our internal process. We have the funnel in place on the top, but we need to put in place things that then flow from there. So from an IT standpoint, our next implementation would be to work on a full portfolio of management capabilities. Then, we need to start focusing on our speed to market, and looking at the macro metric, which is how much of our total sales volume is driven by new products.
Profit: What would you tell people who argue that innovation should be more of a creative process?
Simone: It is a little counterintuitive in many ways, but I believe that a process for innovation exists and can be formalized. This process doesn’t have to stifle the creativity. On the contrary, a system can enable innovation and get good ideas into the funnel. The more that people in your company understand the innovation process and follow it, the easier it is to actually get these ideas to a place where you can execute on them.
Aaron Lazenby is editor in chief of Profit.