Winning consumers with a forward-looking operating model
(Second of two parts)
Consumer products companies face the challenge of transforming to stay relevant in the face of rapidly changing consumer needs, but global research commissioned by EY reveals concerns about whether executives are taking the right steps to lead their organizations.
In a recent global C-Suite survey, “Becoming Future Fit: Challenges and Opportunities for Today’s Consumer Products Companies,” which was commissioned by EY of MIT SMR Connections, 86% of C-Suites surveyed said transformation was essential to become future-ready, but they face uneven progress due to conflicting priorities and a shortage of the talent needed to facilitate change. Unless companies find ways to overcome these obstacles, they will not achieve their transformation goals and will grow increasingly out of step with the demands of tomorrow’s consumers.
In Part 1 of this two-part article, we discussed the first two key design principles needed to foster agility, responsiveness, and resilience: being part of dynamic business ecosystems and being powered by data and intelligence. analysis with the data factory. In this second part, we discuss the remaining three key design principles: encouraging talent flexibility, innovating at scale, and embedding purpose in all facets of the organization.
For these principles to be most effective, it is better for organizations to excel in all of them rather than just well in one or two, and they must be accomplished in a way that builds and maintains trust not only with consumers, but also with their employees and all their ecosystem partners.
ENCOURAGING TALENT FLEXIBILITY
Transformation will require the development of people with deep skills in key areas such as data transformation, but organizations will also need generalists across all functions who can work together in new ways. An adaptive workforce and culture can thrive when supported by emerging technologies and new ways of collaborating in a reimagined workplace. In the EY 2021 Work Reimagined Employee Survey, the focus is on putting people at the centre, with the future of work enabled by transformative digital tools.
INNOVATE AT SCALE
Everyone must be involved in the innovation effort. People on the front lines are often the best sources of ideas, as they deal directly and daily with consumers and ecosystem partners, but those ideas are often not captured or are weighed down by rigid processes.
By taking a forward-looking approach to strategic planning, investing in data, and moving towards resilient data-driven supply networks, companies will be able to innovate at scale and enable the super personalization. The most successful innovative ideas support technologies and cultures that capture, rapidly scale and scale the ideas that work, and move to the forefront of reshaping customer and industry expectations.
INTEGRATE A GOAL-DRIVEN STRATEGY
An organization’s purpose defines its value propositions, its role in ecosystems, how it attracts and retains talent, its partners and the consumers it serves. Although purpose and sustainability are key drivers of value, they are not always integral to operations. While industry-specific issues vary, a purpose-driven growth strategy can address critical issues of trust, technology, commerce, and sustainability while keeping people at the center of every decision.
As leaders seek to reframe the future of their organizations, investors, consumers, employees, and society at large are asking them to become more motivated in creating long-term value. The goals are accelerated but sustainable growth, a stronger market position and a better world of work for all stakeholders.
KEY ACTIONS FOR A FUTURE OPERATING MODEL
While there is no clear finish line in the race to become fit for the future, organizations that transform around the five principles will be in a much better position to stay ahead of the forces. market changes. Fostering better relationships with their consumers will lead to long-term relationships built on trust while being in a stronger position to collaborate with partners with increased agility, allowing them to bring their products to market faster.
CEOs can take three key actions that are crucial to delivering a future-ready operating model, the first of which is defining a leadership vision that disrupts organizational barriers. Although the organization is on a journey of transformation, it is essential to ensure that the whole organization is also on the journey. CEOs are meant to challenge the orthodox and inspire action, but the global Becoming Future Fit survey finds that 63% of leaders expected corporate culture to be a source of resistance, while 55% cite the inability to orchestrate a transformation roadmap as another potential obstacle. .
Second, CEOs need to be realistic when setting timelines for building capacity. In the global survey, 61% of leaders said building a flexible talent pool within two years is essential, but one adjunct professor quoted in the survey reports that it takes three to seven years just to onboard everyone, line up the incentives and get buy-in.
Finally, leaders must start from what is needed in the future, not from what they are capable of today. The global survey found that while 77% of executives said they have the emerging technologies needed to transform their operating model, 70% identified the need to upgrade their technology infrastructure as a significant barrier to transformation. This contradiction highlights the gap between having the capabilities needed for today and those of tomorrow, which has implications for the delivery of the transformation agenda.
THE NEED FOR CONTINUOUS ADAPTATION
It should be established that there is no single business model that can win in the future at scale, as CEOs will need to come up with many different models, strategies, and proposals from a core operating model. Leaders will need to continue to adapt their strategies and business priorities to anticipate potential disruptors and reflect volatile market conditions.
It requires a perspective that does not make the present and the future mutually exclusive. Leaders should keep in mind that the value they create today will fund their transformation in the future, while investments made in future transformation will help create value today, providing the opportunity to create a virtuous circle.
This article is provided for general information only and does not replace professional advice when the facts and circumstances warrant it. The views and opinions expressed above are those of the author and do not necessarily represent the views of SGV & Co.
Maria Kathrina S. Macaisa-Peña is a Business Consulting Partner and Consumer Products and Retail Industry Leader of SGV & Co.