How Consumer Goods Leaders Can Help their Companies Weather the COVID-19 Storm
The COVID-19 pandemic has blindsided societies and businesses alike, and its repercussions will be felt across the world for months, perhaps even years to come. It’s possible the way we all live, work and connect will never be the same again.
The effects on consumer goods companies will be profound and lasting. This crisis is permanently changing how and what consumers buy and will likely accelerate immense structural changes across the industry.
The scale and breadth of the challenges can seem overwhelming, but business leaders do not have the luxury of time in developing a response. Societies need their help managing the immediate emergency.
Leaders must also ensure their companies can weather the economic storm and are positioned to help drive the return to growth once the peak of the crisis has passed.
How to respond now
Responding in the short term will be a severe test of consumer goods companies’ operational agility, responsiveness and resilience. We have been advising clients to stand up a cross-functional “command center” to manage the crisis.
This unit should be tasked with continuously tracking key performance indicators (KPIs) to understand what is driving the disruption, who is affected, which external stakeholders they should be working with, and how to respond quickly and effectively to stabilize the business, protect workers and support communities.
The pandemic has disrupted consumer goods supply chains to a degree most companies will never have seen before. Getting end-to-end visibility in close to real time (using tools like a supply chain “control tower”) is now essential, as is expanding the supply chain risk framework, coordinating and strengthening the supply base, and enabling manufacturing to be relocated more easily.
This is a significant challenge, but it is also an opportunity to identify previously hidden weaknesses and rethink the resilience and agility of the whole supply chain.
Protect your people
The workforce is being disrupted too. People are adapting to unfamiliar and often highly stressful working environments. They’ll need the company’s support to stay well and stay productive, whether they’re working onsite or from home.
It’s vital to show flexibility. Where needed, be prepared to override company policies and stop non-essential work. Look to support people’s emotional needs as well as their physical safety.
Highlight the leaders who understand these needs and can show the most compassion and care. Recognize the importance of brand purpose in inspiring workers with a stable connection to something bigger than their immediate challenges.
Where working at home is possible, ensure remote workers have the digital and collaboration tools they need. The sudden shift to widespread remote working means companies must also urgently review their network effectiveness and security profile. Consider actions like distributing secure networking hardware to workers where appropriate.
Adapt to new consumer needs
Lockdowns around the world are driving a great consumer migration to online channels.
In many segments these are likely to be the only viable sales channels in the near term.
But demand is highly variable. Staples such as food, personal care and pet supplies are seeing massive surges, where others like fashion are being hit hard.
Look ahead to the future
Amid all the present challenges, it’s important to remember that this crisis will pass. Economies will rebound creating a “new normal.” It’s therefore vital to build the capabilities that will be needed in the post-pandemic world, closely monitoring the permanence of the different consumer patterns, behaviors and channel preferences established during the emergency.
It also includes thinking about how to reset and repurpose both operations and workforces for those different consumer needs, while increasing flexibility through capabilities like third-party manufacturing and logistics.
The business will need funds for these investments. Finance has a vital role, preserving cash in the difficult months to come and helping to identify and support suppliers and customers who may otherwise be vulnerable, who will play a vital role in the post COVID-19 recovery.
Identify cash collection risks and look for opportunities to optimize costs and payment terms. Reprioritize investments for the post-pandemic era with an overarching objective of renewing the business model and shifting to intelligent, data-driven operations.
For those with the means, this is the time to identify M&A opportunities acquiring capabilities that could dramatically drive growth in the months and years ahead.
Focus on what’s needed now and next
COVID-19 calls on consumer goods leaders to address three key needs simultaneously. The first is the near-term need to respond urgently to protect the business and the communities it serves for the duration of the pandemic.
The second is to reset relationships and ways of working, adapting the business to what may be a very different set of consumer, customer and worker priorities on the other side.
The third is a longer-term need to renew and scale operations to support a post COVID-19 business model for a future marked by growth and resilience.
The pandemic is putting virtually every aspect of consumer goods businesses to the test. In the end, it will be those organizations that are most adaptable to change that will be best positioned to ride out the disruption and help both their businesses and their societies come through stronger.
Oliver Wright is managing director, global lead Consumer Goods & Services at Accenture.