Innovation and Tobacco at R.J. Reynolds

An Interview with Dennis L. Potter, VP of Innovation in the Growth and Innovation Group at Reynolds American Inc.
By Sandy Staggs
While Research & Development has always played a pivotal role in the success and longevity of tobacco giant R.J. Reynolds, parent company Reynolds American Inc. (RAI), has recently synergized all of its units with the creation of the Growth and Innovation Group, anointed with the objective of expanding RAI’s tobacco business model into a more diverse and competitive portfolio for consumers.

R.J. Reynolds is America’s second-largest tobacco company and currently claims approximately 28 percent of all U.S. cigarette sales, including six of the top 10 brands: Camel, Pall Mall, Kool, Winston, Salem and Doral.

Dennis L. Potter is the Vice President of Innovation in the Growth and Innovation Group at RAI, based in Winston Salem, N.C., where is responsible for the identification and advancement of tobacco innovations in product and packaging and a member of the Growth and Innovation Group Leadership Team

Dennis recently shared some of his thoughts on innovation at RAI/R.J. Reynolds with

Sandy Staggs (SS): What role and level does innovation play at RAI?

Dennis PorterDennis Potter: While innovation has always played an important role at RAI, it has, in the past, been left to R&D, in collaboration with the individual Business Units, to seek their own methods and approaches to the creation of innovative new products. While we have enjoyed significant innovation success with this approach over the years, hindsight also shows us that we succeeded in a high rate of unconnected, short-term focused, incremental innovations with a few evolutionary and a very few break-through product offerings.

As RAI evolves from a cigarette manufacturing company to a Total Tobacco Company the creation of the Growth and Innovation Group is a very recent development. The Growth and Innovation Group is made up of integrated units that will create and manage the strategic equity of our diverse tobacco offerings by exploring consumer, customer, and market insights. We believe that these are the key components for a successful innovation business model.

SS: Can you name some tools and techniques you have utilized, and with what result?

Dennis Potter: We have the various capabilities to capture, track, categorize, segment, and rate our ideas and concepts but these do not form the core of our success metrics. Past experience has taught that too much focus on the numbers associated with innovation ideas can become a barrier to the innovation effort by hijacking the objectives to quantity over quality and focus.

SS: What else do you do to encourage innovation at RAI?

Dennis Potter: The quantity and quality of innovative ideas is actually improved through focus. We set boundaries around where we will focus our innovation efforts through a series of cascading strategic innovation platforms that are bounded by things like our trademark equity, established and emerging cultural cohorts, consumer and market insights. We spend nearly as much time defining what is not in the scope of these platforms as what is in.

SS: Are you collaborative? Do you outsource or use outside consultants and companies?

Dennis Potter: The nature of our business and products carries with it a fairly complex set of both regulatory and self imposed rules and standards to which we rigorously adhere. Our focus to the outside tends more in the direction of finding innovative solutions to our innovative product concepts than to the creation of the concepts themselves.

SS: Have you used online ideation/innovation/collaborative resources—i.e. software, online sites, etc.?

Dennis Potter: Beyond our internal capabilities, it is an area that we will look at and consider, but one that presents considerable complexity given our internal standards.

SS: What is the most exciting innovation you've been involved in developing?

Dennis Potter: As I mentioned, our Growth and Innovation Group is still young so we don’t have any exciting innovations that we can share at this point. However, our team was formed from individuals that have been involved with creating and bringing our innovations to the market for most of their careers like the recently introduced CAMEL Crush product, and our recently announced lead market plans for a new line of CAMEL dissolvable tobacco products called Camel Sticks, Camel Strips and Camel Orbs.

SS: When you are stuck, what do you do?

Dennis Potter: Most worthwhile opportunities present difficult problems to solve. If they were easy, someone has probably already solved it, and we do look for the simple solutions first. We have attempted to staff our Growth and Innovation Group with diverse, open minded, individuals working in a collaborative open environment; Collaboration is further extended through excellent R&D and Engineering resources within the company; we are fully engaged in technology scouting; we actively seek out open innovation partners; and we pursue excellence in market and consumer insight understanding. By taking an ‘orchestra leader’ rather than a first violin approach, we are able to progress multiple innovation objectives and leverage cross synergies to provide fresh perspective and solve problems.

SS: Can you recommend any particular books on innovation that you or your staff have read?

Dennis Potter: Top of mind would be “Payback” by Andrew and Sirkin, “A Whole New Mind” by Daniel Pink and Anthony Ulwick’s “What Customers Want.”

SS: What, if any ideation/problem-solving/innovation software do you use?

Dennis Potter: We are currently evaluating Invention Machine’s “Goldfire Innovator” software but we are still in the very early stages.

Dennis L. Potter joined R.J. Reynolds in 1977 as a Senior Research Chemist in the R&D Packaging Development Group. In 1979 Potter moved to the Purchasing Department where he advanced to the level of Senior Buyer of Specialty Tobacco Papers before returning to R&D as a Development Brand Manager in 1983. Over the following years Potter held a variety of R&D product development positions including Director of Emerging Technologies until becoming Senior Director of Winston/Camel/Innovations & Packaging Development in 2002. In 2006 Potter accepted a second assignment with BAT Pacific Corp. in Japan where he helped to establish a startup regional innovation group. Potter returned to R.J. Reynolds in January 2008 to form the Strategic Innovation Group in R&D, which has now evolved to become part of the Growth and Innovation Group.

Potter received B.S. degrees in Biology and Chemistry from Truman University. He lives in Kernersville, N.C. with his wife Marcia and has a son Matthew, and two daughters Courtney and Kelley. Potter enjoys woodworking, outdoor activities and reading Science Fiction.

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