“The real voyage of discovery consists not in seeking new landscapes, but in having new eyes.”
Global Forces, commercial coherence tests, the art of the possible and designing 'the right to play'
''Excerpts from my recent address to the Consumer Goods and Technology industry event on 'Building the Revenue Growth Business Operating Model Of The Future' in New York ''
Over the last 15 years I've been fortunate to prototype experiences and learn best practices in proposition development, working for and with some of the world's most admired brands. These brands command enviable positions in retail, consumer goods, banking/ insurance and media, all sharing one common denominator; how to create sustainable revenue growth, at scale, through increasing consumer and market relevance by designing and delivering solutions against very specific, unmet needs.
The Quick And The Dead
In this timeframe, year-on-year EBIT growth across top 100 CPG brand owners across the world has been declining - since 2010 - and even went into negative growth in 2014 and then flattened out a little bit again in 2015 onwards. To offset this, manufacturers have looked further afield towards BRIC and Emerging markets to offset sluggish growth. Since 2014, more than two thirds of revenue growth and an even bigger share of profit growth - among the top 50 global CPG firms - has come from pricing and mix rather than volume.
Over the same period (circa last 4 years) we've witnessed the emergence of tech/ advances in AI and machine learning that will eventually require fewer 28 year old MBA's traditionally working as a data insIght specialists/ strategy leads. Strategic forces are adding 'exponential' tensions to brand performance.
The role of Amazon and its butterfly effect, coupled by the rise of the discounters and the impact on price and margins, plus the fact that consumers are no longer shopping the way they did 10 years ago, is making it harder to predict business model success. These 'evolved' buying behaviours along with a proliferation of competition in the form of upstarts and category disruptors, coupled with increasing supply-side (and socio-economic issues such as Brexit) adding additional challenges for modern leadership teams globally.
The Case For Change
There is no one silver bullet. Sorry! Although there are common principles, observed across some of the world's most pioneering business models, including the likes of Amazon, Nedbank, Coca Cola, Carlsberg, Aviva, Mars and Albert Heijn where we prototyped global best practices in transformational capabilities using advanced analytics/ artificial intelligence, tech and highly collaborative ways of working to create sustainable, profitable revenue growth.
The winners, often those poised to galvanise a team and culture around a vision and a set of values that energises individuals towards rapid iteration (test & learn) to solve big problems, inspiring 'the art of the possible' through lean, highly pragmatic start-up principles of relentless focus and execution. 3 principles emerge as MUST have's to win in the current climate.
3 Core Principles That Enable Agility At Scale:
Connecting-the-dots using proven, structured data and analytics frameworks and methodologies to sift through an abundance of data and information across often silo'd yet highly complementary functions of sales, marketing, supply chain, strategy, finance and customer experience to create and execute on highly actionable strategies and tactics. Playing at this edge requires state-of-the-art systems in artificial intelligence and predictive analytics to create and capture customer value. First movers are using revenue growth frameworks & methodologies enabled via strong tech roadmaps that link fulfilment models with real-time promotion and supply opportunities, often targeted at customer segment level, in the right pack, price format at the right moment, to create value and relevance. These are now, for many top tier players, the basic building blocks of the capability build.
2. Tech is a major enabler; it does not replace but rather augments, the business end of things.
The term 'digital transformation' rarely is about a certain department or event and often tends to not sexy; rather an internal 'optimisation' where labour-intensive tasks (administrative, back-office functions) are automated to allow intellectual capital to focus on higher value creating activities and priorities. For some of the outliers in the industry right now, particularly players who are not reliant on dated Saas stacks but able to mobilise solutions combining machine learning and artificial intelligence with human experiences that optimise ways of working, the future looks attractive indeed. Global players are increasingly looking for technologies and solutions that enable these revenue growth systems and product roadmaps for getting the right Product to the right Consumer at the right occasion for the right Price or in more scientific terms, “The application of disciplined analytics that predict consumer behaviour at the micro-market level and optimise product availability and price to maximise value growth”.
Outliers are already able to inspire enterprise-wide visions, combining left and right-brained thinking to sweat the most from assets in artificial and human intelligence, in equal measure.
3. The third, and by far the game changer in our view, is in the Ways of Working, where ways of working is not 'policies' and internal handbooks but rather a team's ability to 'hum' together as they inspire the 'art of the possible'. Curiosity, a bias-to-action mindset, growth vs fixed mindsets, a willingness to experiment and learn, being kind, all of these give rise to what we believe to be thriving culture and ecosystems, which in turn breeds meaningful alignment between elements of purpose, values, skills and what we are good at, and what the world and the immediate environment around us needs, resulting in our ability to make an impact, which leads to happiness, wellbeing and success.
These elements are crucial for building sustainable, high functioning ecosystems. I'm a keen student of flow theory and unlocking ultra performance states, cultivating the growth mindsets with practical tips and 'how to's', many of which come from unrelated sectors but with common themes. (some with insights that enable greater relational dialogue with others, useful in teams and partnerships, neuroscience-backed insights that help us to become aware of and dissolve the ego, to increase creativity and performance that create energy and flow. How to defrag the mind and become more effective at managing the auto-pilot humdrum of everyday life. Mindfulness and meditation, and how to bring clarity of thought, focus and concentration to individuals and teams. Grounding practices to manage inevitable stresses and modern day anxieties)
Whether it be Propositions, segment marketing, product teams, revenue growth strategy or brand marketeers, these capabilities provide a strategic asset via a structural approach, enabled by people (HI or human intelligence), systems and tech (AI) and organisational ways of working (where collaboration means collaboration!)
For those who succeed in building this capability, involving truly cross-functional inputs, the net benefit can have a big impact on revenues and profitability. Most of these benefits contribute directly to the bottom line and provides funds to accelerate growth.
Working with global tier 1 clients in the US, Europe, Middle East and Africa I have been fortunate to lead the development of best practice case studies for transformation program improvements in EBIT between 2%-5% of sales. For a £10b company, that's £200m to $500m a year in newfound profit. And the game changer for me is not so much in the systems and processes, but rather the people, and ways of working. This, surely, is how we can optimise the human condition in ways that allow us to complement, and differentiate against, machines.
''It is not the critic who counts; not the person who points out how the strong man stumbles, or where the doer of deeds could have done better. The credit belongs to the person who is actually in the arena, whose face is marred by dust and sweat and blood; who strived valiantly; who errs, who comes again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly.''
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