Ride the Next Wave

The very basis of competitive advantage in the consumer goods (CG) industry is shifting. Winners traditionally worked from foundational capabilities rooted in the physical world. Today, these are “table stakes.” The next wave of breakout winners are building and leveraging capabilities rooted in analytics and actionable insights. They moved beyond product efficacy (which remains very important) to delivering experiences. This transformation has implications for how business value is created, the core competencies required to achieve those results, and the organization designs required to deliver those competencies.

We have identified three key drivers of this transformation:

First, social/digital marketing is enabling delivery of relevant, authentic experiences at the moments that matter most (right experience, in the right context, to the right consumer, at the right moment).

Second, the evolution and engagement of the SMAC Stack  (Social, Mobile, Analytics, Cloud) allows for fast, cost-effective capabilities to enable innovation, testing and scalability (but requires fresh thinking and new relationships between IT and business).

Third, fresh organizational models enable new analytical capabilities, at scale, to  create competitively advantaged insights from the burgeoning volumes of highly granular data that, today, lay fallow in many CG companies.
So what to do?  We suggest a three-part framework for getting started:

1. Build a shared vision of competitive advantage in a digital world.  Most CG leaders have created significant organizational value — and personal wealth — with a highly successful model. That model is obsolete! Remember cassette tapes, VCRs, bank checks, paper maps? Things change. How to win in CG has changed.  Is your “win vector” new product innovation models? Best-in-class shopper/consumer insights? Digital/social marketing? Develop hypotheses/ideas. Test, learn, fail, test again… it’s a different model, but it is essential to have senior team alignment as any big change creates pain.

2. Get a SMAC Stack strategy in place. Remember when people were concerned about commerce on the Internet? Now, we are concerned when we can’t conduct commerce on the Internet. The SMAC Stack is a similar issue. Embrace change, limit risk and learn fast.  

3. Get out of the box on organizational models. Henry Ford revolutionized manufacturing with the production line. He co-located specialized skills to deliver a complex product, a Model A or Model T car. Today, CG companies often co-locate diverse specialized skills to serve accounts. Teams often include category management, shopper/consumer insights, sales, finance, supply chain, etc. Communication and collaboration are the key reasons to co-locate. What happens if communication is “free”. We can now co-locate based on skill sets, invest in new levels of analytic and insight capabilities to create the engine for competitive advantage.

Where are you on the journey?