Economies of scale have supported the development of big brands since a few pioneering little brands became the very first big ones. That approach literally held watershed brands up through years of growth and market dominance - make more things, cover more shelves, own all the partners, rake in more profit – until it didn’t.
Today’s consumers want to see themselves in the products they buy, and connect to brands in ways that make them feel more empowered and delighted by their choices.
For big brands, scooping up small brands that help to meet consumer demands for relevance, transparency, and modern customer experience is a smart strategy - but it can’t end there. Hanging on to that new audience requires parent companies to enable the new brand’s dynamism to continue and thrive. The new kids need the support of a corporate structure that gives them room to succeed far beyond the limits of its original size, one that shares the benefits of expanded technological resources, marketing clout, and feet on the ground.
Agility is Key
As big brands navigate the shift in growth models from market saturation to an entirely different kind of immersive approach in the digital age, agility is a necessity. Yet that’s one of the biggest stumbling blocks faced by big brands.
McKinsey is considerably less polite about the “stumbling”:
Consumer companies are not agile: in a 2016 McKinsey survey of 18 consumer companies, there were no companies that qualified as agile. At best, CPG companies create cross-functional teams for certain special projects, but these teams often spend considerable time trying to navigate the “real” organization with its many stakeholders.
We can expand the definition of “certain special projects” to include the acquisition of small and medium size brands as a way to recapture eroding market share. As 90 of the top 100 brands in consumer packaged goods (CPG) have lost market share, 70% of growth in the space has come from smaller brands.
It’s not necessarily that large brands don’t understand the need for agility and the benefits of rethinking economies of scale for the digital age; it’s very much a matter of execution.
Think of it this way: if big brands are leveraging acquisition strategies to meet consumer demands for relevance, transparency, and modern customer experience, why do they tend to ignore those same demands when it comes to their own internal processes?
Internal processes can – and do - hold back your ability to scale.
The way your teams communicate, collaborate, and execute determines how agile your enterprise will be. If they depend on tools designed in the past for use in the past (and by past we literally mean yesterday), that agility is going to be limited. Exactly how limited? Let’s hear from McKinsey:
Agile business units are also 1.5 times more likely to outdo competitors on both financial and nonfinancial performance metrics (examples of the latter include time to market, productivity, and employee engagement). Furthermore, agility supports and benefits from other components of the new model, such as new innovation approaches and getting the most from advanced technology.
Outdated Workflow Management Systems Hamper Agility
Most legacy workflow management tools were designed strictly as organizational tools without the capacity for collaboration, real-time communication, or visibility across teams. What’s more, integration with other technologies is piecemeal or outright impossible. Bolt-on solutions only go so far in adding flexibility to tools that are built to stay rigid, adding complexity to an already unwieldy set of processes. Changes, no matter how small, mean calling in the IT department.
In an age where intuition drives the technology that consumers use, these legacy tools are remarkably lacking in intuitive structure; at heart they can be little more than virtual filing cabinets. Manual workflows are still required; processes that should be intuitive remain tedious and time-consuming - from searching to tagging to ensuring compliance and ensuring access controls and permissions are strictly enforced.
These remedial tools open plenty of opportunities for users to create their own processes outside the system. Ironically, workflow management tools with a singular focus on security and compliance actually encourage users to escape routines that take up too much time and effort for the sake of productivity, exposing the enterprise to unnecessary risk. That’s a very costly escape route.
A Better (and Modern) Approach to Workflow Management
Modern workflow management tools should be built on platforms that are flexible and infinitely scalable. Automation and AI/machine learning should add adaptability, speed, and accuracy to every process. This enables fast, intuitive searching and organization, visibility across all silos - while tagging new versions of assets automatically and automating the tedium of merging and purging duplicates.
Each user should see only the information that’s relevant to them. Data should be organized in different ways for different needs; users should be able to search for exactly what they need, and find it quickly. The ideal workflow tools should be where teams can start, collaborate, and complete projects. In a word: agile.
It’s time to take your thumb off the scale. Visit nuxeo.com/rethinkingCPG for a deeper look at how the right tools can move your brand in the right direction.