The Top Three Issues Facing Consumer Goods Organizations
by: Trudy Bourgeois
Peter Drucker has said, “The only thing we know about the future is that it is going to be different”. I couldn’t agree more. What has become apparent is that change is a way of life. Only those individuals and companies that stay abreast of these changes and proactively address the opportunities that these changes bring will experience success. What then are the key issues or opportunities for companies that want to succeed in the 21st century?
1. Adopting a fully integrated business model to obtain synergies will enable a company to gain efficiencies. Growth, in a stagnant market, will occur only for those companies who meet the needs of the changing face of a savvy consumer. The ability to proactively meet the requirements of the global consumer will lead to increased profitability. Limited resources will continue to be an issue, so it will be imperative that all departments are focused on activities that compliment each other's work and add value to the achievement of the company goals. Reducing and eliminating redundant work will help to contribute positively to the bottom line which ultimately will always remain the top priority for any company that lives to satisfy the stockholder.
a. There is so much information available; it’s almost to the point of overload. Not only will companies have to keep up with technology but they will also have to be able to use technology to enhance the company’s ability to communicate more effectively with its consumer base. Progressive organizations will challenge themselves and technology manufacturers to help achieve integration throughout the organization.
b. To achieve a cross-functional team business approach, it will take a willingness to break down the silos. This means that IT, Marketing, Sales, Business Development, Finance, Production and Human Resources will all have to be marching to the same drum; pursue the same goals. This is not an easy challenge. It can, however, be overcome with support of process and data exchange.
c. New Marketing techniques and new ways to speak to the consumer at the point of sale will be the key to maintaining and gaining market share. Customized market plans by region will become the norm, given the changing demographics within the country.
As an example, Hispanics and Asians are the two fastest growing demographic populations. What do these developments mean in terms of marketing and sales? Another example would be the "women" factor. A woman influences 80% of all purchases. How can a company ensure that they are probably positioned to capitalize on this huge change? It will take all the talent, energy and effort of the entire organization to maximize these changes. It will also take solidifying business relationships, which leads us to the next critical issue.
Business relationships between manufacturers and retailers will be developed based on fact base selling. Retailers will expect customized promotional offers. In order to achieve superior execution and effectively manage inventory, organizations will be forced to rethink the entire supply chain. This is one of few remaining areas where synergies can translate into bottom line profit contributions.
2. Developing Diverse Leadership. Diversity is not restricted to color or gender, it goes far beyond. Diversity includes innovation, looking at the business from a different perspective, developing new models
and approaches. Successful organizations will embrace diversity in its broadest context.
a. The consumer is extremely diverse and therefore organizations must develop a diverse workforce in order to market effectively. In the 21st century, diverse leadership has been noted as one of the most significant success factors by Fortune magazine. Diverse leadership includes all cultures, all backgrounds, but clearly there is a skew towards women and minorities. In order to attract the best talent, organizations will have to establish themselves as an "employer of choice", which means being extremely flexible, culturally sensitive and acknowledgement that the good old' boy system is no longer effective. Successful organizations will adopt policies and philosophies that support diversity, and build diverse leadership as a key strategic business activity.
b. Buyers are becoming more diverse. The days of margin being used as leverage are gone. We can thank Wal Mart for that development. The opportunity to adopt a more knowledge, consulting relationship with your most strategic customers will be a top priority. To shift from a “gut sales” approach to a “analytical data driven sales” approach will separate the winners from the losers.
c. Global economics will drive the need to reexamine every aspect of business. Those organizations that have diverse talents will be able to get into new markets quicker and experience profitability sooner.
3. Recruiting and Retention: There is an overwhelming amount of evidence that supports the belief that there will be a "skilled" labor shortage in the next ten years. According to information posted by the U.S. Labor Department, the unemployment rate in seven years could be at 2%, meaning that many companies are going to have to acquire qualified workers from others
sources. Couple that forecast with the uncertainty of how long baby boomers will remain in the workforce, organizations will have to address it's culture in order to meet the expectation of four generations. To get the talent needed to maintain a competitive edge, companies will have to begin to think of recruiting in non-traditional locations.
Proactive companies are already investing in developing high school and college programs, which build awareness of their company. Whether it's providing computers, mentors, or leadership development, companies are heavily engaging in outreach programs that will position themselves as an "employer of choice" for the future.
These top issues clearly support the belief that people development will be the most critical success factor in the 21st century. Technology is available just about everywhere in the world. Skilled workers to properly utilize technology to support execution of the strategy are not available everywhere. Only the employers who have the “right” vision, the “right” culture and the “right” business model will be standing at the end of the 21st century.
