What Life Taught Me During My Journey from Small-town Girl to Global Business Owner
September 17, 2018
By Lauren Stiebing
By Lauren Stiebing
It’s been three years since I started LS International, an Executive Search business that operates ... Read more
Articles
Change Management: When and How to Lead it
The pace of change in the world is undoubtedly accelerating, forcing leadership teams to devote more and more resources (people, money, management attention) to effectively managing change in their organizations. The current wave of change is being driven by external forces such as technology (e.g. AI), regulation (e.g. GDPR), emergence of new business models (e.g. online only retailers) or even geopolitical considerations (e.g. trade wars/embargos) as well as internal imperatives (e.g. a new purpose or vision).
Over the past three decades Change Management has been extensively studied and many different frameworks and best practices have been developed. These are intended to help organizations plan for change, implement it, communicate it, help people to adapt, and measure the impact. Most large-scale organizational changes impact processes and their technology underpinnings (the systems, their user interfaces, what data is fed in and when etc.). Of course, policies and procedures also often need to be amended. But the ultimate burden of “living the change” falls on those people who are tasked with driving and managing the change and those who are called upon to make small or large adjustments to their attitudes, habits, mindsets and managerial/leadership abilities.
As Mattia Aste, Global Manufacturing Excellence Lead at Monsanto says in a recent LS International Podcast, “… a transformation is a transformation… only if it's really touching the full operating model, so you really take care of process, system and people at the same time”. So how can change in organizations be led more effectively, so that the goals are achieved with minimum “collateral damage” in the form of customer loss, employee attrition, non-compliance or other forms of resistance to change that might disrupt business?
Clearly, it’s best to start at the beginning, which is understanding why a certain change is needed and why now. All worthwhile organizational change must be around improving performance, an objective that can be achieved in many different ways. For instance, revenue from existing products could be grown faster by enhancing the efficacy of targeted marketing so that first-time purchases as also repeat purchases increases. A similar outcome is also possible through product innovation and compressing the time needed to launch them. Cost reductions could be achieved by using technology to raise productivity of employees or processes or changing mindsets so that “waste” such as excess inventory can be eliminated (the holy grail of Supply Chain transformation over the past two decades).
But not all change is about increased revenue and/or reduced costs in the short term. For instance, a merger could also be a trigger for massive enterprise-level change; in such a situation, while fresh revenue streams, synergies and cost-saving opportunities are important, perhaps even more important is the need to evolve a new culture that combines the best from the merging organizations. Such situations offer leaders an unprecedented opportunity to create something that is far better than either predecessor organization was. As a result of this headline intent, multiple functional transformation programs are identified and implemented. For example, a smarter, leaner supply chain or a more collaborative R&D network that is more tightly integrated with Marketing (to sense and respond to changes in customer preferences for instance).
As Mr. Aste points out, “A transformation is always designed around your customer”. It is important is for leaders to articulate a compelling vision of the change and why it is needed now. This needs to be communicated across the organization in ways that make sense to employees at every level. Often, large-scale change programs are encapsulated in slogans and posters. These are undoubtedly aides to spread the message, but what is also needed is a series of conversations between the leaders and those below. The first round of these conversations is too important to be delegated and must be led by the highest echelons of the organization. At one level, these conversations must be aimed at informing the middle levels and the rank and file of the proposed change and its contours, including the rollout plan. At another level, they must be forums for debating and discussing concerns and fears that, if unaddressed, could derail the program in the days ahead. This also serves to finesse the business case or plans by factoring in additional information from closer to the trenches. Additionally, such a step helps individuals to buy into the change program and take ownership. Personal commitment to change helps build accountability, which is critical to garner commitment and unleash the power of innovation.
Arguably, it is easier to drive change when the organization is doing well, as the pain associated with the change can be somewhat cushioned, but it may well be more important to drive the change when the organization is losing its competitive edge and ceding ground to competitors. Depending on the situation the organization finds itself in, leaders must convert the stark reality of under-performance (or the promise of a tremendous opportunity waiting to be tapped) into a powerful motivator for organizational change. They must infuse confidence across the organization by communicating and reinforcing important messages:
- There is a clear set of reasons for the change and this is the best time to make traverse the leap across the chasm;
- Necessary resources in the form of money, technology, people etc. will be made available;
- The road ahead will not be easy and progress will depend on a unity of purpose, the “collective intelligence and will” of the organization;
- Perseverance in the face of setbacks that may force course correction; and
- Leaders are personally committed to the success of this change and will lead by example.
September 10, 2018
Podcasts
How to Transform a Supply Chain, with Mattia Aste
We hear about how supply chains are changing, transforming. But how does that actually happen and work? In order to discuss that, we’ve invited Mattia Aste, Global Manufacturing Excellence Lead at Monsanto, which is currently integrating with Bayer. He has a vast experience in Logistics, Planning, Manufacturing, Strategy in Europe, US and Global roles. Given his end to end perspective, we discuss with him how he sees supply chain transformation and what it takes, as a leader, to drive these changes.
Main topics:
- What a Supply Chain Transformation means and encompasses
- Why do companies need to Transform their Supply Chain
- Which are the key elements in a modern Supply Chain
- How, as a leader, engage and motivate peers and team to lead change
September 3, 2018
Leadership
Enhancing employee engagement through efficient and effective on-boarding
The process of employee engagement begins during the search and interview stages but really kicks off in earnest when s/he formally reports for work. For every new hire, irrespective of seniority, location and role, the first few days are vital. This is the time when s/he meets new colleagues, peers and team members and starts to get a feel for the new workplace, its culture and policies. What the organization, represented mainly by the Hiring Manager (and assisted by HR and other support functions), does to make the first few days smooth, easy and memorable for new hires is the essence of “Onboarding”.
Here are two data points quoted in https://blog.octanner.com/editor-picks/an-onboarding-checklist-for-success-infographic that reinforce the importance of onboarding:
- Up to 20% of turnover happens within the first 45 days of employment; and
- 69% of employees are more likely to stay with a company for three years if they experience great onboarding.
- Paint an honest picture of the organization’s culture and ways of working during the interviewing phase, so that new hires do not experience dissonance caused by a reality that is different from what s/he expected.
- Ensure that the new hire is made to feel welcome. This means having office seating, stationery, configured laptop and mobile phone, email id, etc. ready.
- Introduce the new hire to his/her colleagues, managers and reports. If a buddy or mentoring system exists, facilitating such introductions should also be part of the onboarding process.
- The Hiring Manager must ensure that someone from the HR team is specifically available to meet the new hire when s/he reports to the reception and helps in completing all administrative formalities (e.g. ID, biometric access, business cards, IT systems and access, bank accounts for payroll, application for corporate credit cards, cafeteria cards, parking slots etc.). Obviously, the specific tasks will depend on the new hire’s seniority, role etc.
- The HR point of contact must escort the new hire to his/her Hiring Manager’s desk/room.
- Hiring managers must ensure that they personally meet the new hire on the first day. If a personal meeting is unavoidable, a call is essential, and must be followed by a personal meeting at the earliest opportunity.
- Ideally, on the first day itself, the Hiring Manager must send out an introductory email to people in the organization who will eventually become key members of the new hire’s professional network. This should be done after the new hire’s email has been activated so that s/he can respond and start integrating with the organization.
- After the new hire has spent a couple of weeks in their role, the Hiring Manager must meet with him/her to find out how they’re settling in and if there’s something more they need. Having been told of any “gaps”, the Hiring Manager must make all reasonable attempts to plug them. If there are specific reasons why such gaps cannot be filled, s/he must close the loop with the executive. This might not sound like a big deal, but is an example of the “honest and open communication” that the candidate was told to expect.
August 20, 2018
Leadership
On-boarding: Critical to every leaders success with Ralf Neuser
This episode of the career success podcast we are joined by Ralf Neuser to discuss the on-boarding process for new hires. The onboarding process is a key factor to the success of every new hire and according to the SHRM Foundation which is a nonprofit affiliate of the Society for Human Resource Management, half of all senior-level outside hires fail within the first 18 months. Ralf will give some tips on how to make sure all new hires into your team are successful.
August 12, 2018
Guest Article
The Benefits of Making Your Business Eco-Friendly
Guest Article by Cloe Matheson
Image Source: Unsplash
Image Source: Unsplash
Image Source: Unsplash
August 6, 2018
Podcasts
Leading Through Diversity in Supply Chain with Flavia Sebastiani
There’s no doubt that supply chain and logistics are going through a major transformation, and the demographics isn’t an exception. In a space that used to be a dominated by males, women have gained territory in the last decades. Globalization has also contributed to diversifying the supply chain community.
To speak about this topic, we’ve invited Flavia Sebastiani, currently a VP at DHL Brazil to speak about this topic and understand her personal experience and advice.
In this podcast, we discuss:
- The changing role of women executives in Supply Chain
- How to lead diverse teams
- Diversity as a key business driver
- Advice on managing and leading through diversity
July 30, 2018
Toys
The Toy Business: Child’s Play no Longer
For many in the US, Canada and in some European countries the Toys “R” Us chain of stores was an important part of growing up. Therefore, the iconic chain’s decision to shut all 735 of its US stores earlier this year has shocked many. This outcome was the culmination of many factors, such as the growing preference to buys toys online, the ability of competitors to offer superior “experiences” and the chain’s own poorly-made strategic choices of price as the go-to-market plank and not investing adequately in e-commerce capabilities and experiential retail (and of course, the burden of debt).
Analysts expect that in the short-term, rival retail chains will benefit from the closure of Toys “R” Us stores. Target is seen as a particular beneficiary because more than 90% of its stores are within five miles of Toys “R” Us stores. But by no means will Target be the only chain to benefit. Ollie’s Bargain, The Children’s Place and others see themselves gaining from the situation.
But the really savvy retail companies will look beyond such immediate benefits. Like every other business, the toy industry too is going through major change. Innovation and technology are driving not just new products but also customer experience during the purchase- whether in-store or online. The medium- and long-term beneficiaries of this shake-out in the toys and sporting goods retail industry will be those companies that understand the emerging contours of the business and focus on the new drivers of growth.
Some companies have themselves been at the cutting edge of these changes. Not surprisingly, they are doing well- for example, Build-a-Bear, which allows consumers to customize stuffed animals by offering a range of animal skins, clothes, accessories and even scents. Watching the “stuffer” working to create the stuffed animal of their choice is truly an amazing experience. And because adults love stuffed animals, the company has expanded its target customer segment beyond “kids” and “toys”. By opening stores in popular holiday destinations, Build-a-Bear now enables customization of stuffed animals with clothes and accessories that will always remind buyers of their holidays. In other words, they have ensured the longevity of the experience by creating a tangible memory aide.
Large toy manufacturers such as Lego, Hasbro and Mattel are also being impacted by the industry trends as well as the bankruptcy of Toys “R” Us, a major brick and mortar retail partner for these companies. They will perhaps use this disruption to realign their business strategies and embrace digital capabilities that enable new ways for these toy-makers and their brands and products to engage with customers and consumers around the world.
Despite all these winds of change, it is fair to say that certain things will remain the same going forward: kids will want to touch, feel and experience a toy before buying it. Earlier, walking into a toy store was the only option; now, technologies make it possible for kids to do almost exactly that from the comfort of their homes. Toy-makers and retailers will rely more on “unboxing” videos and pop-up stores to attract kids to their products and brands and thus drive growth and profits. And of course, they will need social media smarts to direct and harness influencers in the form of other kids who can make a certain toy cool (or not).
With the government’s emphasis on Make in America and cutting the trade deficit with China (the world’s largest manufacturer of toys), American companies such as Crayola (crayons, silly putty etc.), Beka (building blocks) and DirtKing USA (tricycles) are expected to do well. So too could niche players like Green Toys and Begin Again. The former recycles milk jugs to make its vehicles and playsets, while the latter uses sustainably harvested rubberwood and plant-based dyes to make its interactive toys (including replica John Deere tractors). But the future could just as well be shaped by start-ups like GoldieBlox or Tiggly or littleBits, that cleverly combine STEM learning or robotics with fun. And that might just be the new engine of growth the industry needs to bounce back.
Companies such as MGA Entertainment too seem to have found the magic sauce. Though they have been around for many decades, they were not as well-known as say Mattel or Hasbro. But as CEO Isaac Larian recently said, “Clearly our innovative product, packaging and marketing is hitting a chord with consumers around the globe, especially in the UK”. The company’s name may not be top-of-mind recall, but its franchises and brands sure are- Little Tikes, L.O.L. Surprise, Bratz etc. are already names to reckon with in the US and UK; they are expanding rapidly in Europe and Latin America. The company has tied up with Amazon as well with retailers like Walmart and Target. For overseas markets, it has tied up with local players. It thus melds ecommerce with brick-and-mortar presence.
The history of business is full of examples where nimble and innovative newcomers have got the better of established players. A similar story is likely to play out in the toy retail sector as well. Whether you are part of a company that’s being threatened or are in a company that is perceived as a threat and wishes to push home its advantage, you need the right talent to win this war. Clearly, no child’s play, this, but then, even toys are serious business.
July 24, 2018
Articles
Negotiate Your Way More Effectively Through Life
For most people, having to negotiate probably ranks right up there with undergoing a root canal procedure or even public speaking. And yet, we all face many instances in both our professional and personal lives where we have to negotiate. M&A deals, supplier contracts, agreeing merchandising displays at retail stores are all business activities that involve extensive negotiation. But so too does asking for a raise or promotion. Persuading one’s child to go to bed on time or trying to get the salesman at the used car dealership to agree to a lower price are also examples of “negotiation”.
Despite the all-pervasive nature of negotiations, the process is something few of us enjoy. This is because some of us are not assertive enough and are unable to articulate our expectations and position firmly. In some cases, the two parties are not clear about what each of them values in a given situation and thus, what each is willing to give up to get what they value. In certain cultural settings, age and hierarchy also deter effective negotiations.
As Minerva Acevedo says in the LS International Career Success podcast, “negotiations may seem like an intimidating process because our egos get in the way and we let our emotions get involved. We tend to associate negotiations with being fair or about compromise when it really depends on the specific situation and how well we can control the process in order to achieve the outcome we desire. It's not really necessarily about winning”.
At its heart, successful negotiating is about giving to get; therefore, what matters is what each side gives up and what it gets in return. Negotiation is more art than science, as it involves other human beings, their egos and emotions in addition to more tangible gives and takes. The good news is that it is possible to acquire the skills needed to be an effective negotiator. Listed below are practical tips designed to improve one’s ability to negotiate and to also help move the other party along in the direction of a possible agreement. While some of the tips focus on the preparation, others are intended to guide one’s behaviour and actions during negotiations.
- Do not view a negotiation as a conflict- it is in fact a process to narrow down differences and converge on common ground. All negotiations need not be inherently “zero-sum” in nature (meaning that one side loses all while the other wins everything). View negotiations instead as a way to ensure that both sides get what they respectively value more in the given situation.
- Learn to separate person from the offer or counter-offer. We often view the offer made by the other side as inseparable from the person making the offer. This makes it easy to bring our biases, prejudices and personal dislikes into the negotiation process. In turn, this clouds our ability to assess the merits and demerits of the offer/counter-offer and respond meaningfully.
- The key to negotiating successfully is to plan well. Give enough thought to what your side values and is ready to give up. But also try and anticipate what the other side values so that you can identify possible trade-offs that could become concessions that the parties agree to.
- A seasoned negotiator is necessarily a consummate listener who picks up verbal and non-verbal cues to get a sense of what the other side values and what they might be willing to potentially give up. This information is critical to create new pathways and move forward, when what one has planned and practised is leading to deadlock. This is like a playmaker in a football game creating openings and pushing forward.
- Understand that the other side may have different expectations than you in terms of the targeted outcomes. For instance, one side may be looking at maximizing prices (the supplier), while the other (customer) may be concerned about timely supplies, material quality and overall reliability- in addition to reasonable prices. Ms. Acevedo is bang on target when she says in the podcast “…negotiating is about maximizing value and involves a lot of planning, research, questioning, listening for what’s being said but also to what's not being said in order to have better control of the outcome”.
- Often, we are afraid of putting our proposal on the table first, and we wait for the other side to make their move. Do not be afraid to be the first to articulate your expectations and proposals clearly. You get the first-mover advantage because you force the other side to respond to what you have offered. At the very least, you will get more time to discuss it thoroughly. But make sure you have thought through it beforehand.
- During the negotiations, tempers may rise. Seasoned negotiators do not lose their cool; instead, they use the other side’s emotions to their own advantage. It is tennis season- so think of it as “unforced errors”.
- There are instances where an apparent impasse is reached during negotiations just because the parties are unable to differentiate between their “interests” and “positions”. This results in people sticking to positions and in the process, losing sight of their interests.
- Frame your proposals in ways that highlight what you believe the other side values. Your research will help you identify this in advance of the actual negotiations. This signals that you are thinking about the other side’s interests and helps making the other party more receptive. If possible, simulate negotiation sessions with your team members (some of them play the other party)- that can harness the creative diversity of the team and may give you new insights.
- Sometimes, agreeing to met again after a few days to continue discussions and negotiations is itself a significant win- for both sides. It allows you to consult with your colleagues and bosses and re-evaluate your trade-offs and outcome expectations based on the information you have gleaned during the earlier meeting.
- Be realistic about possible outcomes. There may be situations where what one side is asking for is simply not doable by the other due to reasons of law, policy, ethics/morality or even financial considerations. If you encounter non-negotiable trade-offs, be prepared to walk away. But remember that both sides are there to reach agreement- so chances are that the journey will continue after a break. Use every interaction to create a more robust picture of the other side’s preferred negotiation style, what they value, what trade-offs they are open to etc.
- The most important piece of advice I can offer is this: overcome your fear of negotiations; the more you operate from fear, the greater the risk that you will give up more than you would have liked to simply because your fear will cloud your judgement and trigger reactions such as anger and obstinacy- the arch enemies of successful negotiations.
July 16, 2018
Business
The Art of Negotiation with Minerva Acevedo
On this episode of the Career Success Podcast we invited Minerva Acevedo to speak with us about the art of negotiation. Minerva has worked in consumer packaged goods in both marketing and sales roles, in the health and wellness industry with Johnson & Johnson and in the food industry with McCormick & Company. Through both experiences, she have been exposed to negotiations with large corporations such as Costco, Wal-Mart and some of the top Canadian retailers and media companies.
In this episode we discuss:
- Negotiation vs. Selling - what are the key differences
- Why many people feel uncomfortable with negotiation and how to overcome this
- How to walk away from a negotiation feeling successful
July 9, 2018
Beauty
Indie Beauty Brands on the Rise
The global cosmetics market in 2017 was valued at over US$532 billion. This large market, which includes products for the likes of hair care, skin care, oral care, color cosmetics, fragrances, soaps and shower gels etc. is expected to grow at an annual rate of more than 7% in the next five years[1].
Historically, this market has been dominated by large players with well-known brands such as L’Oreal, Coty, Revlon, Elizabeth Arden... but like in most other consumer markets, the winds of change are blowing in the beauty products market too. The following trends are especially noteworthy in terms of their impact on the future of this business and how players must respond, as they impact both the demand and supply sides of this industry:
- Baby Boomers and Generation X consumers are being supplanted by millennials and Generation Z
- Growing move away from synthetic chemical-based products to those made from natural ingredients
- Rapid growth outside western markets, especially in countries like China
- Ready capacity for outsourced manufacturing is available in North America, Europe and Asia
- Outsourced R&D of cosmetics and beauty products is now far easier than before
- Convergence of channels to enhance experience
- Digital technologies are making it easier for sellers to connect with and sell to consumers and prospective consumers
- Social media is playing a key role in influencing first-time product users.
July 2, 2018
Podcasts
What’s Happening in Beauty? With Gianni Pieraccioni
Beauty is one of the most dynamic industries out there today. To learn more about it, we've invited Gianni Pieraccioni. He’s a C-Level executive that’s worked with global companies like Revlon, Alitalia, J&J and Pepsico and we’ve invited him to understand more about the beauty consumer, its distribution and how it will evolve in the coming years.
In this Podcast, we review:
- The beauty consumer and the evolution of its behaviors
- Retailers adaptation to this new environment
- Technology's influence on the beauty market
- How the big beauty companies are reacting to these changes
June 26, 2018
Guest Article
Nathalie Nénon: Do you Speak Brand Sponsorship?
The FIFA World Cup has started on and the sponsorship circus is on. When brands try to get traction from their partnership with the elite football teams and the World Premium Football competition we can question the future of sponsorship in the new digital era.
A long time ago, when Gen Z’s parents just graduated, i.e. approximately 25 years ago, sponsorship was all about putting brand names on panel boards around the football pitch and on team jerseys. The objective was to raise brand awareness in a gamble that the TV audience will help recognise and memorize the name and/or logo.
Sport Marketing Sales agencies have continued to flourish by selling to medium-sized-wannabe-big companies the opportunity to have their name around the pitch of a national or European matches or other sporting events, comparing real advertising time with hazardous visibility raising more internal C-suite pride than consumer intention to buy. When it comes for big or major events, on site visibility has moved from prime argument for partnering to must-have but not-enough-to-have, a somewhat reinsurance for the potential sponsors.
The measurement of the so-called TV exposure is still a golden standard as a KPI and the bread and butter of some research companies in the sports industry, without demonstrating the impact of the sponsorship as delivering big numbers in terms of equivalent advertising’s time and valuation, which doesn’t provide any insight about the performance of the brand among the main target audience of the corporate sponsors[1].
With premium right holders driving the most of their revenue from broadcasters with a correlated effect to push the matches’ broadcasts from free to air TV to pay TV with sometimes very narrow audience, the power of the brands as event sponsors is shrinking and the potential influence of the TV brand exposure is a less and less sustainable argument. Although TV is still king in terms of media consumption for sporting events, sport is going digital and social. The youngest audience and young adults have been shifting from TV to digital devices – the Olympic Games 2016 in Rio have been the turning point and the FIFA World Cup 2014 suffered from a decline of TV audience of the youths for the first time ever due to a transfer of viewing to digital devices (Laptop, mobiles, tablets). The digital landscape has currently no recognised measurement standard similar to what exists for TV, which brings more uncertainty about the understanding of the impact for sponsors.
Mc Kinsey already pointed out in 2014: “Sponsorships have become an integral component of marketing strategy. Yet many companies still do not effectively quantify the impact of these expenditures, even for events requiring significant spending such as the World Cup. A systematic commitment to a menu of analytic approaches allows executives to identify sponsorships that create value as well as those that don’t live up to their names.”
Disrupting the sponsorship approach is now mandatory to hit brands’ objectives as it’s more
and more is all about consumer engagement, impact and return on investment[2].
Brands should focus on 5 key rules to get more impact and traction and none of them is about brand exposure during the games.
- Exclusive territory of expression vs. exclusivity of product category: so far Coca Cola gets the exclusivity of communication for the product category soft drinks and water for the main contracts. Now to raise the interest of the consumers, brands should define a territory allowing them to demonstrate what they bring to them and their community. The territory can be shared with several corporate brands as long as the consumers get the message: sustainability can apply to energy carrier, water supplier, waste management company… It’s all about a convincing and acute story telling towards the company main target audience.
- Exclusive contents vs. “same right for the same category of sponsors” policy. Since the late 80’s, sponsoring packages were the same among the sponsors of a set level. Now each brand needs to offer a unique experience to their customers and consumers to differentiate from their competitors and deliver a strong advantage against those which are not official sponsors and use the theme. This implies as well that the right holders (for example an International Sports Federation) carve out some media rights to allocate them to their sponsors such as behind the scenes stories, athletes’ preparation … We have all seen during the last winter Olympics athletes sharing directly on their social media depriving the sponsors from potential activation.
- Preferred access to data and analytics. Very few organisations are able to nail down all their data in a same place (for example ticketing buyers, merchandising consumers, audience). So far the ticketing data of the last Olympics or FIFA World Cup don’t belong to their respective international organisation, preventing to share with their international sponsors a clear picture of the fans. Sponsors should access data and connect them with the own ones to elaborate sophisticated and efficient activation’s plan.
- Co-creation of unique assets. One of the privileges of an official sponsor is to use and print the logo of the sponsored event or organisation on products. Millions of Coca Cola bottles have been carrying the logo of the FIFA World Cup, for example, all over the world. This doesn’t deliver any advantage neither to customers nor the company itself as such. Sponsorship will move to strategic alliances allowing the co-creation of new products and new services with a revenue sharing scheme for a mutual benefit of the right holders (more potential revenues if the strategy is correctly defined and implemented), the corporate company (more profit if the offer is very attractive and unique vs the competition or money saving if the sponsorship doesn’t prove to be successful), the consumers (better engagement with the co-branded product or service).
- Definition of sponsorship purpose. A sponsorship deal is usually contracted for a set period of time and the corporate company is focusing on getting a return of investment during this set period of time. The subject of legacy is more and more of importance for the companies’ shareholders, staff and consumers. What should the sponsor achieve to make its world sustainably better? This element is now crucial for companies willing to partner with mega events such as the Olympics or the FIFA World Cup
June 18, 2018
Articles
My Own Experience Working Abroad by Lauren Stiebing
As an executive search professional, my life straddles two continents- Europe and North America. There are many differences in day-to-day customs and practices between any two countries, even neighbours such as the USA and Canada or France and Germany. The more I interact with executives working away from their home countries, the more I realize the importance of people making adjustments to their views, habits and expectations to account for and adapt to cross-cultural differences. In this article, I list some tips that I draw from my own experiences and hope readers will find them useful as their own careers take them from one country to another.
Be Open Minded
Take the simple example of waiting in line. In the US or the UK, people would stand in a line without a second thought. But when I moved to Spain, I was struck by the absence of lines. It is common for people to just gather around the area and ask “¿quién es la última” (“who’s last in line”?). Initially, I must admit that I found this quite annoying (probably because my Spanish wasn’t great at the time). But over time, I got used to it and now, I think nothing of asking who’s last in line and wait accordingly. This example might sound trivial, but it underscores an important point- when in Rome, do as the Romans do. Things will be different in a new country, but if that’s the norm there, who are we as outsiders to pass judgement or criticize practices? It is far easier to accept that things are different, keep an open mind and adjust. Trust me, it will save a lot of frustration (and you will save money on antacids too!).
Learn the Language
Learning the local language should be another high-priority item on the “to-do lists” of expatriate managers. In multinational companies, English is often the lingua franca, and expatriates do not usually need the local language for work. But in every country, people appreciate efforts by foreigners to speak their language. They don’t expect fluency, and usually the very fact that you are making an effort to learn their language will endear you to them. Also, when you rely on interpreters or translators, what you may get is a filtered version limited by the interpreter’s proficiency, willingness to translate, biases and personal agenda.
Be Patient
Patience is held out as a great virtue. Adjusting to a new country and its culture is a prime example of where patience pays. Most of us are quite impatient when it comes to adjusting to a new environment; we expect to be on top of things in a day or two. But getting used to certain things in a new country can take much longer. The format in which dates are written is a simple but telling example of this. I must admit to having written my birthday as the 1st of May on many occasions before making the change. Do not put yourself under pressure to hit the ground running. Give yourself a reasonable amount of time to settle into the new environment- but be aware that you need to work hard to settle in.
Talking about her own experiences of living and working in the US and Europe for over 20 years, Carole Rissmann, who was most recently VP Marketing at Beiersdorf USA, says in a podcast you can listen to on our website, “… every country has (its own) culture, background… so I would say be curious and ask questions. There is a lot to learn from people…. there's never just one way of thinking or doing something…. and you're better able to make a decision if you have multiple perspectives…. it has always been an eye-opener for me how much there is to learn from others- not just professionally, also personally.”
Other aspects of culture too permeate the workplace. For example, while the US is largely non-hierarchical, in many other countries people are respected for their age or experience. Someone who moves from a hierarchical to a non-hierarchical culture (or vice versa, for that matter), will find it tough unless they make a conscious choice to understand these differences and factor them into what constitutes appropriate behaviour. As Ms. Rissmann says in the same podcast, “acknowledging or recognizing [cultural] differences can help to move the business forward more quickly or in a different way”.
Accept Diversity
Another aspect that is likely to come to the fore is acceptance of diversity. In some countries, opinions are valued on the basis of merit, and not whose opinions they are; but in other countries, the views of senior leaders are considered sacrosanct. This might stifle creative thinking and force people to adhere to the tried and tested. So, when someone from a country where diversity of opinion is welcomed moves to a role in a country where it is not, s/he may wonder why nobody else is speaking up. It is easy to form judgement about the competency of individuals, but remember that sometimes, cultural shackles may be responsible. Of course, the reverse is also possible, with executives being affronted at the temerity of fresh graduates offering suggestions and nobody else viewing it as a breach of hierarchy or protocol.
A recent article in FT quotes researchers from a group of US universities who studied the effect of foreign postings on self-awareness reporting in the Organizational Behavior and Human Decision Processes journal that “No longer immersed in the values and norms that they take for granted, people are frequently faced with new situations that prompt them to reflect on the dissimilar values and norms of the foreign culture. Such recurrent reflections may strengthen self-concept clarity because they make people more confident in what they actually believe and, ultimately, who they really are”. (Source)
In addition to providing functional or key market experience to executives, cross-cultural stints strengthen an individual’s core leadership capabilities by making them more open-minded to change and adaptable. They become more willing to consider diverse views in order to make better decisions. Indeed, some decisions could be so radical that they elevate the company’s growth trajectory to an entirely new, higher level. But all this will not happen automatically. Every individual needs to be self-aware, mindful of how the new environment differs from “back home”, accept the differences for what they are, and factor them into the process of interacting with people and making decisions. And remember that organizations increasingly value self-aware people.
June 7, 2018
Europe
Business in the North America vs. Europe with Carole Rissmann
Navigating your way in a new business culture can be difficult, on this episode we speak with Carole Rissmann about her experiences working in the US and Europe. Carole has a 20 year success record at Beiersdorf, where she led strategically and operationally top-ranked and Iconic global skincare brands like NIVEA and Eucerin. Her last role was as VP marketing for Beiersdorf in the US.
In this episode we discuss:
- Business culture and how this is defined
- The types of profiles which are hired in each region
- How living and working in diverse environment effects your problem solving skills, creativity and leadership style
- Carole's 3 tips on being successful in any new business culture
June 4, 2018
Latam
Latin America: Challenges and Opportunities for Retail and Consumer Goods
Latin America experienced extended economic growth between 2004 and 2012 due to rising prices of natural resources (minerals, energy, timber etc.). Things started going bad for the region in 2013 when prices of natural resources crashed. After almost five years of pain that hit the region’s corporates and individuals, things are starting to look better. GDP growth estimates in 2018 for the top six economies (Brazil, Argentina, Chile, Mexico, Peru and Colombia) range between 2-3%. Of course, major risks remain, such as what happens to NAFTA after President Trump’s actions to revoke several clauses, the outcome of elections in Colombia, Mexico and Brazil, and the US Fed’s actions on interest rates (Source).
Especially for companies with interests in sectors driven by “retail consumption”, LatAm’s bright growth prospects are attractive. For example, McKinsey predicts that the fashion industry will see a 2x to 3x growth in turnover between 2016 and 2018. However, this growth will be driven mainly by markets in the Asia Pacific and Lat Am markets. Their study concludes that more than half of global clothing and footwear sales will be outside Europe and North America (Source).
Other consumer product categories that are expected to record healthy growth in Latin America during 2018 and beyond include beauty and personal care products (4% CAGR till 2026); energy drinks (12% CAGR till 2021); pharmaceuticals (9.3% CAGR till 2028). The number of malls too is expected to increase at 5% per annum. Despite a dip in sales of mobile phones costing more than US$400, the wave of low-price smartphones from China has made them affordable to almost 80% of adults in Latin America (Source). In fact, China’s growing interest in the Caribbean and LatAm is reflected in its growing economic presence in the region. China is currently the second largest bilateral lender, the second largest trading partner and the third largest source of new FDI in Lat Am (Source).
As Mr. Jeferson Fernandes, Coty’s Supply Chain Head for Latin America points out in LS International’s recent Career Success podcast on What makes Latin America different, the region’s “lack of maturity will be a key driver of opportunity” (Source). However, Latin America is a unique market especially when compared with Europe or North America. As such, companies looking to do business there must give careful thought to the implications of these differences on their strategies and operations.
Despite language and cultural diversity, Europe is a fairly homogeneous market, thanks largely due to relative political stability and the unifying legal/tax structures of the EU. North America too is homogeneous in nature, allowing companies to integrate production, marketing etc. at a regional level. But such an approach cannot easily be applied to markets in Latin America, where each country has its own political nuances and differences in tax structures and rates. In fact, even within the same country, there are variations in tax rates between states. Also, unlike Europe or North America, where even towns with populations of 50,00 are seen as attractive markets for retail products, in South American countries, socio-economic disparities between urban and rural segments of the population mean that many products are available only in larger cities.
Even in the new millennium, Latin American countries have generally been characterized by poor innovation. Even their ability to assimilate new technologies that boost productivity is lower in comparison with most other regions in the world. This partly has to do with the weak legal system in the region that is often unable to protect intellectual property (IP). In turn, this makes IP owners and investors less willing to commit to transferring technologies to the region. In fact, inventors and entrepreneurs from the region head to Silicon Valley or other parts of North America to incubate their ventures and seek early-stage funding (Source).
But in recent years, this is changing. With the advent of cloud computing, new age ventures like Uber, AirBNB and Netflix are growing rapidly across the LatAm region. Although Venture Capital (VC) activity is still small relative to other parts of the world, investments in start-ups are doubling every three years. There is now thus greater hope than ever before that the benefits of technology-led innovation will accrue to citizens in this part of the world sooner rather than later.
Latin America is emerging as an attractive e-Commerce market, thanks to internet penetration that is at 61% and growing every day. As a direct consequence of internet and smartphone penetration, a growing number of consumers (more than 41%) research products and compare them online before even visiting stores. One in every three consumers search actively online for deals and promotion offers. It is estimated that online sales will grow at 19% per year- well above the global average of 11%. These trends have collectively created a huge opportunity for retailers willing to invest in e-Commerce infrastructure in Latin America. Not surprisingly, Amazon, Walmart and Alibaba are among the global giants ramping up their operations in various South American countries (Source).
But in Latin America the road to e-Commerce success is paved with additional challenges that include citizens’ limited access to banking services, security of online payment gateways and corruption associated with customs. In countries like Brazil, state-to-state variation in taxes adds another layer of complexity. Logistics represents another challenge mainly due to the relatively poor physical road and transportation infrastructure in the region. It is estimated that this adds a hefty 15% to costs, besides increasing lead times for delivery. Bloomberg and Simpliroute report that the time between order placement and delivery at the customer’s door could take weeks (Source).
All things considered, both companies that are already operating in Latin America and those that seek to enter must ensure that they adapt/plan suitably. Wherever possible, hiring mid or senior-level talent with a blend of local and global exposure will facilitate ease of doing business.
May 28, 2018
Podcasts
What Makes Latin America Different? With Jeferson Fernandes
Latin America is a market that is still a big mystery for many. While it’s biggest country, Brazil, has been recently on the headlines because of political instability, it is back on the growth track after some years of deep recession... this depicts the region a bit, unstable, unreliable in the short term, but a fantastic opportunity for long term growth. But what are the challenges in LATAM? What’s this market even like? To answer these questions and more, we’ve invited Jef Fernandes, Supply Chain Leader in Brazil and has experience across the region and as well in the United States.
In this Podcast you'll learn:
- Advice on how to approach the Latin America Market
- Supply Chain challenges in the region
- How to transition from Europe or North America to Brazil as an executive
- Future of the market
May 18, 2018
Digital
Podcast: Digital Transformation and Impact on Value Chains and Routes to Market with Craig Binkley
On this episode of the career success podcast we are following up with Craig Binkley, CEO of BINKTHINK Strategy Group on his white paper Digital Transformation and Impact on Value Chains and Routes to Market.
During this podcast, Craig takes questions from our network on:
- The healthcare industry: how does Craig see the impact of digital fitting into the industry and what that means exactly.
- The human project in New York which is embarking on like the largest study ever, and could revolutionize healthcare because of digital technology.
- How to get your organization ready to embrace and drive towards digitization.
- How to motivate and enable people to think and act digital.
May 5, 2018
Leadership
How Can You, as a Leader, Create a Purpose-led Organization?
A purpose-led organization and its benefits
Leadership gurus affirm that the single most important responsibility of a leader is to define their organization’s “purpose”. And having done so, they must ensure that stakeholders understand that purpose and are empowered to act in ways that help achieve that purpose.
But what is “purpose”? It is essentially the raison d'être. Maximizing profits has for long been seen as the reason why businesses exist. However, in recent years this belief has begun to change, and “purpose” is now being defined in ways that go beyond profit maximization. This shift is the result of the growing realization that for any business, sustained growth and profitability depends on people- whether they are employees, customers, prospective customers or business partners.
Especially in the face of rapid change, a clear organizational purpose acts as a beacon to decision-making and as a rallying point. It also helps the organization make better decisions around whom to hire, how to retain talent, what products/services to offer, how to market/sell them etc. It also motivates people to do their best- and stretch. In turn, that drives higher levels of innovation, customer service and commitment to the organization.
How you, as a leader, create a purpose-led organization?
The theory, as always, is simple. As Prof. Dan Cable says in an HBR article (Source), leaders must trigger employees’ “seeking systems”. Let’s now look at some specific actions leaders can take to create and nurture a purpose-led organization.
The implementation of the theory must clearly begin with defining an organizational purpose that is both authentic and aligned to the business model. But the real task lies in personalizing this purpose to individuals and teams within the organization. Leaders must recognize that individuals are motivated when they have the freedom to express themselves. This means giving them more opportunities to do what they are good at, so they can shine. This means assigning people roles that leverage their strengths- in practice, this could well include facilitating transfers and role reassignments based on perceived or assessed strengths and not just qualifications or experience. It could also mean allowing employees the time, budgets and space to experiment with ideas. Of course, to the extent possible, all such experimentation must be aligned with the organization’s strategic priorities, so that the outcomes will help further the organization’s legitimate interests. The payoffs are potentially huge, though, as people working on what they like doing will almost always be better performers.
Research also shows that people tend to be more engaged with their work if they can see how their role/work contributes to larger organizational goals. To facilitate this, leaders must break down corporate strategy and departmental plans into smaller components and explain them to the relevant departments and teams. This allows people in individual departments to formulate their goals and KPIs in ways that are clearly aligned with the larger purpose. Many leaders and managers do not deconstruct and personalize the organization’s purpose and strategy; this results in employees feeling disconnected or like they are in a black box, not knowing the value of what they contribute.
Periodically (say at the end of each quarter), managers must show each department how it has made a difference. This may mean going beyond the standard performance dashboard or evaluation metrics- and this is what Purpose-driven leaders are willing to take the time and effort to do. For example, leaders at Novant Health encouraged employees to create their own job titles; this prompted people to highlight their unique contributions to their teams, and over time, caused a marked improvement in morale and performance.
Leaders must remember also that keeping the organization purpose-led is not a one-time exercise. As the business grows, new people join, and some people retire or otherwise separate from the organization. Regulations change, as do technologies. Collectively, these shape operating conditions. In response, company managements will take actions from time to time that may also impact employee morale and motivation. It is at such times that reaffirming the purpose and painting a clear picture helps. It may also need a new purpose to be defined. It would be a big bonus if As Peter Hall, President of Consumer Brands at New York-based Dean & DeLuca says, “The most motivating thing I think as a leader is to paint an exciting vision (for the team). And then secondarily, define team members’ part in the plan… then you’ve gone some way to fulfilling your leadership obligations and to motivating your executives.”
April 30, 2018
Podcasts
How to Motivate your Team? With Peter Hall from Dean & DeLuca
Motivating a team can be a challenge. As business leaders, we will have to get people of different origins, ages, nationalities, genders, functions and even industries to work together.
As this is a topic that comes up in many of our conversations, we have the pleasure to have Peter Hall on this edition to discuss it. Peter is currently the President for consumer brands at Dean & Deluca. Born in Australia, he’s held executive positions at the likes of Diageo and Heineken before his current assignment, having been based in the US, the UK, Mexico and Venezuela.
In this podcast we discuss:
- How to motivate a team
- Why can people lose motivation
- Creating a purpose-led culture
- Advice on motivating and creating a purpose=led environment
April 23, 2018
Business
Taking Risks vs. Playing it Safe
Arnd Pickhardt former CMO of Lidl Germany
Challenging yourself to take risks in your career isn't always easy and there could be a lot to lose. We have invited Arnd Pickhardt former CMO of Lidl Germany to discuss with us his experience with taking risks.
In this Podcast, you will learn about:
- Defining your end goal
- How to overcome fears of failure and make that leap in your career
- Overcoming failures and how that effects your career
- Understanding where you best fit in each organization and defining your career steps accordingly
April 7, 2018
Luxury
The Luxury Products Industry: a Great Example of Adapting to Emerging Trends
Our markets are changing. Customer preferences are different from what they were in the past. They buy more online than from stores. Gen Z and Y has more money than Gen X did when they were in their twenties and thirties- and are willing to spend it instead of saving it. Our quality-conscious buyer segments are better-educated and more insistent on using products that are environment-friendly and made without exploitative labour practices.
Each of the above statements applies to most mainstream industry sectors and businesses today. And yet, few industries can claim to have truly adapted to the new reality of their customers and their evolving expectations. One exception is perhaps the Luxury industry. Admittedly, this is not a homogeneous industry and includes many different goods and services. Bain & Co’s study estimates that personal products, cars and hospitality together accounted for 80% of this nearly €1.2 trillion market in 2017. (Source)
On a global basis, not many industries can boast of a 5% growth in 2017- but here again, the luxury business is an exception. And while this robust growth can be attributed to region-specific reasons such as the buoyancy in China, Europe and Japan, there are other factors at work too. As Davide Lunghi, Projects Director for Tag Heuer (an LVMH brand) points out, travellers represent a major buyer segment. Just think about how many people buy watches, perfumes, beauty products etc. from duty-free shops in airports around the world. Travellers may buy these products as gifts or for personal consumption- but buy they do- and that’s a key driver of growth in this industry. This trend also explains the rise of brand cafes at airports, where brands strive to provide prospective customers and customers with unique experiences, away from the distractions in duty-free stores caused by the presence of rival brands or products.
It is important to appreciate that by itself, having merchandise available in duty-free shops will not guarantee sales. That’s why industry leaders such as LVMH, Richemont Brands, Estee Lauder, Luxottica, Swiss Watch Group and indeed others, are reinventing themselves in order to become more relevant to the fastest-growing demographic segments this industry serves.
A UBS report states that 50% of Gucci’s sales and 65% of Saint Laurent’s sales are to millennials. (Source)“We see that Generation Y and Generation Z are bringing the luxury brands to move away from a dogmatic approach, and to cooperate with street wear brands and artists.”, says Mr. Lunghi. Explaining the many impacts of this strategic shift, Mr. Lunghi points to how luxury brands are specifically doing two things on the supply side:
- By sourcing from new corners of the globe they are raising the standard of raw materials; and
- Through external collaborations, brands are driving innovation to expand the definition of “luxury” from the traditional “classic” to “casual”, more affordable offerings. For example, LVMH’s collaboration with Supreme has created product lines that are more appealing to Gen Y and Z. By creating products that attract buyers from this segment, business will grow faster.
April 2, 2018
Podcasts
The Transition of CPG/FMCG into Online with Sri Rajagopalan
The transition of Fast Moving Packaged Goods into the Online Retailing space has been a rocky one. Swinging from Direct to Consumer to Partnership approaches, the scenario does look clearer now than 4 years ago. But, is this going to settle like this?
To look back into what's happened and what is to come, we invited Sri Rajagopalan, Vice President and leader of eCommerce for J&J's consumer business.
In this Podcast, you will learn about:
- What's happened in the last 4 years.
- How will CPG approach online in the next 5-10 years?
- Is going DTC still an option?
- Which categories will be disrupted next.
March 24, 2018
Guest Article
Marko Mintas: 6 Things Every Great Leader Should Have
“Leaders are the ones who run headfirst into the unknown.
They rush toward the danger.
They put their own interests aside to protect us or to pull us into the future.
Leaders would sooner sacrifice what is theirs to save what is ours.
And they would never sacrifice what is ours to save what is theirs.
This is what it means to be a leader.
It means they choose to go first into danger, headfirst toward the unknown.
And when we feel sure they will keep us safe,
we will march behind them and work tirelessly to see their visions
come to life and proudly call ourselves their followers“
Do you know what leadership is? What do you perceive when you talk about leadership?
Upper beautiful part from one of Simon Sinek's books is describing what leadership is.
I would even enhance the last sentence and instead of "followers" use "leaders". The main task of every great leader is to develop new leaders, not followers. Great leaders need to establish leader-leader approach that is simply better than leader-follower approach.
Nobody can force you towards leadership.
Leadership is choice. Your choice. Only your choice.
What are the main things every great leader needs to have? I am sharing with you my view of 6 Things Every Great Leader Should Have.
Listen.
What is harder for you - to talk or to listen?
Do you listen? When was the last time that you listened?
Listening is essential skill for every great leader. Moreover, it is the one of hardest ones to have. In today's world we are used to talking, we are used to giving advice and we are used to expressing ourselves. However, do we really know how to listen? Do we listen or we are listening and preparing our counter response?
What we can differentiate are three main types of listening.
Level 1 is internal listening based on your own agenda. Meaning you listen, but you do not care what other person is saying. You are already preparing your own answer. Level 1 is only about you.
Level 2 is focused listening. We are focusing on the other person. We can hear what the other person is saying. We are listening without our own agenda.
Where are you as a listener? Are you in Level 1 or Level 2? What do you think?
Level 3 is the deepest global listening. The listening that differentiates great leaders from good leaders. It is not listening only about words, it is about change of tone, it is about body language and it is about hearing what kind of words are being used. Level 3 listening is listening without judgments and without evaluation. You are fully there - you are present. You listen - you really listen.
How often have you been in Level 3 listening? This is ultimate goal of every great leader.
In addition, not only listening to others, but also listening to you. When was the last time that you manage to hear your heartbeat? You do not remember, ha?
If you want to ask questions then you need to know how to listen.
Moreover, do not forget LISTEN has the same letters as SILENT.
Empower.
“It doesn't make sense to hire smart people and then tell them what to do; we hire smart people so they can tell us what to do.” Steve Jobs
The ultimate goal of every great leader is to delegate authority where information is. Information is on the “first line” and we need to empower our people to develop leaders there. We need leader-leader approach - everywhere.
What are companies usually doing?
Not empowering people and they are establishing endless reporting. Reporting has the goal to bring information from bottom to the top where authority is sitting. Then the decision is done at the top and it is being cascaded down. Instead that “top” has focus on the vision and leads companies towards long-term success, “top” is swimming in information overload. That is example of Leader-follower approach that is short-term oriented approach.
Leader-leader is a long-term oriented approach. Not many companies are cherishing leader-leader as pressure towards results is on a daily basis. Great leaders need to resist temptation and need to balance long-term and short-term orientation. Leader-leader approach is more sustainable and more long-term approach. The main challenge is that it is an approach of delayed gratification. Results are not visible immediately and in today's world of instant gratification, this can be a challenge. That is why great leaders are here - to solve that kind of challenges.
Not empowering people, we are creating followers who are not developing and who are not unleashing their own potential. If we have 1.000 people in the company and just 5 are deciding, do we need then other 995 people? If we have 15 people in the meeting and they all think the same as 1 big boss, then do we need other people? Here comes the HIPPO challenge. Do not be a HIPPO. HIPPO means HIghest Paid Person’s Opinion. In many companies, HIPPO is talking and others are just nodding or saying “Yes, great idea!” That is leader-follower approach. Remember to Listen. Remember to be Silent. Remember to Empower. Then you can avoid being a HIPPO.
“We kill all the caterpillars, then complain there are no butterflies“ - this is the core of no empowerment.
Empower and stipulate diversity in opinion.
Stipulate ownership and stipulate accountability.
This is what great leaders do - they create new great leaders via empowerment.
Help others.
“Train people well enough so they can leave. Treat them well enough so they don't want to.” Richard Branson
You, as a great leader, have personal responsibility to develop others. When you go to the library, you can find section called Self-Help, but where is the section for Help Others?
When someone is not doing well in the job, do you know the reason? Do you listen enough to understand? Do you ask powerful questions? Do you even want to understand what is happening?
On the other hand, you just do not care and you look at the numbers? You then wait for feedback, talk to give negative feedback and you try to use the stick-and-carrot approach? Do you use fear leadership to improve the performance of others?
How much of your time do you use to develop your team? Think about it. When you imagine your working day, what is percentage of your time you use for reading and answering endless emails? What is percentage of your time you use for meetings? The most important is, what is percentage of your time that you use to develop your people? Reflect.
What are you doing for your consumers? What are you doing for your colleagues? What are you doing for your community?
Great leaders care. Great leaders empathize. Great leaders help others - help others to unleash their own potential.
Lead by Example.
“Be the change you want to see in the world”; Mahatma Gandhi
Gandhi's quote is one of the most beautiful quotes that I have ever read. Ten words are sufficient - you as a great leader, need to be a role model. People are looking at you - do not forget that.
Have a Vision.
“You will never reach your destination if you stop and throw stones at every dog that barks”; Winston Churchill
Where do you want to be in 10 years in your business life?
Where do you want to be in 10 years in your private life?
If you know the answers on those questions then you are already on the way towards great leader.
Great leaders know where they are going. You are the creator of your destiny - nobody else. You decide what will happen to you. Do not blame others, do not justify yourself, you and only you are responsible for your life. Do not be a victim.
So have a vision.
Go fast forward 20 years from now. Where are you? Who is around you? Who are YOU? What do you notice?
Now look back to your life. What have you achieved? Are you satisfied? Would you do it differently? What would you do differently?
Think BIG.
Live.
Live life. Hey, you have only one life!
Do not use it on worthless things and worthless moments.
Enjoy time with your family, enjoy time with your friends, travel, be outside, simply enjoy!
Before I close with 30 second speech of Coca Cola's ex-CEO, I would like that you take a moment, check two pictures below and reflect.
What do you notice? What do you think about it.
Bryan Dyson - former CEO of Coca Cola
“Imagine life as a game in which you are juggling some five balls in the air. They are Work, Family, Health, Friends and Spirit and you are keeping all of there in the air.
You will soon understand that work is a rubber ball. If you drop it, it will bounce back. However, the other four balls - Family, Health, Friends and Spirit - are made of glass. If you drop one of these; they will be irrevocably scuffed, marked, nicked, damaged or even shattered. They will never be the same. You must understand that and strive for it“
6 Things Every Great Leader Should Have
- Listen
- Empower
- Help Others
- Lead by Example
- Have a Vision
- Live
March 19, 2018
Luxury
Why is luxury doing so well?
Davide Lunghi of TAG Heuer
Our guest on this episode of the career success podcast is Davide Lunghi. Davide has been working within the luxury industry since 2002 for brands like Fendi, TAG Heuer, Hublot and Zenith.
Key topics include:
- Estee Lauder, Richemont, Swatch and Luxottica - What others in the luxury industry should be learning from them
- The impact Generations Y and Z have had on the growth of luxury
- How the industry can keep up with estimates of 4%–5% compound annual rate over the next three years
March 12, 2018
Guest Article
Craig Binkley: Digital Transformation and Impact on Value Chains and Routes to Market
Guest Article by Craig Binkley, BINKTHINK Strategy Group (Bio below)
It’s impossible to ignore the way that smartphones have become the centerpiece of many consumer’s lives. They are now the hub of much of our daily activity. We engage with our mobile phones through apps more than we even make phone calls. We navigate to avoid traffic as we drive, or we might call up a ride-share service and not even drive at all. So much for what our mothers taught us about getting into cars with strangers! We check in for our flights and hotels, scan our boarding passes, and even go directly to our room using only our phone. We bank, shop, compare products, read reviews, choose to buy, and even pay automatically in many cases with no exchange of cash or card or even a fingerprint.
But what about how we look at our own business models as business leaders? Are we thinking of that same level of seamless integration and behavioral reorientation on our business structures? Studies by many thought leaders suggest that most companies and business leaders are not ready. But modern leaders know that it’s time to fundamentally rethink what the digital revolution and new capabilities mean for the value chain of every business and our routes to market and customers.
We’re not talking here about the black swans and extreme disrupters enabled by new sharing platforms that enabled Uber, Lyft and Airbnb to exist. We are focused more on the type of shifts that impact existing business models and can be driven within the fundamentals of your business. One of the things we do is to help business leaders navigate all the new tools and techniques with the language and systems of business that have been learned over years. We can rely on enduring rules to help understand how to apply new tools.
While there are many factors involved in a full digital transformation, there are four major things that can get companies moving and leading digital success vs. following or being pulled to the inevitable future:
- Redefine what digital means in your organization. This transformation is not simply about digital marketing or new technology systems and point solutions from the IT department.
- Put the customer at the center of your full business strategy and re-imagine how you can best serve your customer along the full value chain of the business with new capabilities.
- Get excited about the possibilities of new data and the insights they can create.
- Drive organizational change in how you approach both internal and external collaboration as you develop a broader eco-system of partnerships along your value chain.
March 5, 2018
Articles
Mind the (Gender Pay) Gap: Causes and Potential Remedies
There is no doubt that the gender pay gap exists around the world. At around 15%, it is perhaps lowest in Nordic countries; in the UK it is 18.4%, while it is 21% and 27% respectively in the US and Japan[1]. The World Economic Forum estimates the global average gap to be around 32%.
The gender pay gap refers to the difference that exists in the average pay of men and women per hour worked, regardless of their level or function. It is thus distinct from the legal requirement for companies to pay their male and female employees the same if they perform the same (or largely similar) roles in the organization. The gender pay gap exists despite legal and other efforts to narrow it. Iceland recently raised the bar by shifting the onus from employees to prove that they have been paid less to employers to prove that they are paying workers the same irrespective of gender. Further, this law makes it a criminal offence if employers do not take action in cases of unequal pay. Given that several factors contribute to creating the gender pay gap, it is perhaps too early to gauge how successful this law will be in further narrowing the gap.
Causes of the gender pay gap
Various research studies have sought to identify factors that cause this gap. Based on data from Denmark (a country that has very strong maternity benefits and other gender disparity laws), Princeton University economist Henrik Kleven concludes that the gender gap is effectively a “penalty for bearing children”. During the 1-2 years of maternity leave, female employees fall behind their male counterparts (what happens if there are no salary raises in those 2 years for the men?). Over the span of a 20-year career, this grows to almost 20%. The same study also noted that there was hardly any gap between men with and without kids. There are of course instances where mothers re-enter the workforce and in a matter of a couple of years, are able to erase the gap. But exceptions do not make the rule[2].
Harvard University economist Claudia Goldin’s US-based study found that gender pay gap is widest for women in their 30s, which correlates well with their prime childbearing age. Marianne Bertrand from the University of Chicago led a study of Business School graduates and reported that while the average starting salary differential between male and female graduates was about 13% (and attributable to differences in prior experience), the gap grew to 60% nine years into their careers[3].
The time women take off work to raise kids is clearly an important factor but cannot be the only one that contributes to gender pay gap. There are behavioural differences as well that play a role. For example, the Kleven study also found that in Denmark, although both parents were eligible for childcare leave, almost 90% of the leaves were taken by the mothers. This begs the question whether such behaviours are the result of societal norms and expectations or individual decisions. The answer, as is often the case in such matters, is probably “a bit of both”.
Both in the US and Denmark, public opinion tends to support the view that women with young children should not hold full-time jobs. It is also generally accepted that mothers are more committed to providing care and nurture for their children. As a result of such factors (which are not employer related), many women change jobs after motherhood, choosing roles that involve less travel or more predictable work hours.
Evidence that behaviour is a strong determinant of gender pay gap also comes from a study of Uber drivers in Chicago, 30% of whom were women. Allocation of drivers is based on location of the car and the passenger; considerations such as the driver’s gender are extraneous. Even in such a situation, a 7% pay gap was revealed. Deeper analysis revealed that this may be the result of behavioural factors such as the following[4]:
- Male drivers tend to target the more lucrative routes (e.g. airport trips), while women drivers preferred local drives and Sunday afternoons (relatively quiet periods)
- Women drive slower than males- so over a long period of time, make fewer trips than their male counterparts.
- Males have an average tenure of two years; for women, it is a few months- and Uber’s remuneration is linked with tenure
- The average male driver drove 50% more trips per week than women drivers did
- Sensitize school children about the role of men in raising children so that over a decade or so, mindsets about the role of men in raising children will change.
- Encourage moms-to-be to get exposure and training for new roles six months before they go on maternity leave and allow them greater flex-working opportunities when they return. These could include roles as Mentors/Coaches (subject to experience/competence levels)
- Do not consider previous compensation levels during the hiring/selection process for women looking to re-enter the workforce.
- To keep themselves “in touch” with their professional fields when they are on maternity leave, women executives can explore freelancing opportunities.
- Explore the possibility of doing projects that use their expertise but can be done from home or with minimal travel (e.g. how to incorporate Design Thinking into business processes) that are important to the organization.
February 26, 2018
Human Resources
The Gender Pay Gap with Mattel’s Helena Perheentupa
The Gender Pay Gap is the percentual difference of hourly pay between genders across levels and functions. This is a different concept to "Equal pay", which compares pay between genders for doing the same job.
To discuss this particular topic, we've invited Helena Perheentupa. Currently Head of Licencing for Mattel DACH, Nordics and Benelux, she's balanced a successful career with family life, having started at P&G in Finland and working later in Sweden, the Netherlands and now Germany.
In this podcast, we discuss:
- Changes in the last 20 years that have reduced the Gender Pay Gap.
- Measures that can be taken to reduce the Gap further
- Causes of the Gap
- Helena's advice on how to bypass the Gap and be successful in business
February 13, 2018
Leadership
The Art of Leading Millennials & Gen Z
Remember telling college and high school students “You are the leaders of tomorrow” or words to that effect? Well, guess what? The “tomorrow” we spoke about then is now here! Millennials and members of Gen Z are already part of the workforce, working with Gen Y, Gen X and Baby Boomers. Multi-generation workplaces are not new; however, what is different this time is the quantum of difference that exists between Gen Z and even the immediate preceding generation, the Millennials.
These differences are primarily the outcome of the socio-economic conditions in which so many members of Gen Z were raised. Therefore, Gen Z and Millennials born after say 1995 are seen to have attitudes, values and priorities that are quite different from those of the previous generations. Corporate managers and leaders who appreciate these differences will be better-equipped to understand what motivates Gen Z, in turn helping them to make better decisions around selection, training and performance management.
While it is useful to understand what some of these differences are, it is important to keep in mind that any sort of generalisation is fraught with risk. Being truly “Digital Natives”, Gen Z expects “immediacy”- much like their expectation of instant high-speed wi fi access. In one survey, an astounding 40 percent of Gen Z reportedly ranked wi fi access as higher than working bathrooms! Early exposure to video calls on Skype, Google Duo or Whatsapp makes Gen Z arguably better at walking the fine line between synchronous and asynchronous methods of digital communication.
Managers and Leaders are expected to mentor and guide their direct reports, but with Gen Z the approach needs to be different. Gen Z can be influenced more effectively through inspiration and expertise not as much by pulling rank or throwing hierarchy at them. Gen Z is used to obtaining loads of information off the internet- so what they need is help to understand the context in which they are being asked to do certain things. They won’t shy away from asking questions- and their curiosity must be satisfied. As Ms. Montse Passolas, Vice President of Global Marketing, Rimmel and Manhattan - Coty, said to me in a recent conversation, “You have to of course, guide them (Gen Z) in their professional development, but also nourish them in their curiosity, and in the way they relate to the world and to their peers and to their families and to the work life environment”.
Gen Z also tends to think and act more entrepreneurial than previous generations. This is probably because of the start-up boom that this generation has seen over the past decade, creating so many big names that they have grown up with (Snapchat, Instagram, Netflix etc.). Those managing Gen Z employees and teams can derive significant “diversity dividend” by channelling their thinking to help teams and organizations break the mould and drive innovation. As Ms, Passolas pointed out about the young generation (Gen Z), “… they don't find something they will do themselves”.
To me, there are certain other qualities too that are important indicators of leadership potential- and these transcend generations. The most important among them are passion and compassion. Malala Yousafzai, the Nobel Peace laureate is not yet 21 years old. She survived being shot in the head by the Taliban, and after recovering, has been tirelessly working for the cause of education of girls. Jack Ma, founder of Alibaba is another stellar example. Born and raised in China, Ma was passionate about learning English. It is said that he offered free tours to foreigners to learn English. A member of Gen X, he surmounted rejection on numerous occasions and is today among the world’s most successful business leaders.
Unalloyed joy at the success of their people/teams is another hallmark of leaders. My dad is a professional basketball coach, so I grew up watching a lot of basketball. I have seen how he handled players- both through victory and defeat- and built resilience. In turn, I saw how they simply adored him, and would try their hardest to win- for him. Isn’t that exactly how corporate leadership works too? Or at least, should?
To be honest, not everyone will have the leadership spark- even in Gen Z. So what can Gen X or Gen Y managers do to identify Gen Z employees with leadership potential? I would say that in order to spot high potential Gen Z employees, watch how they carry themselves- their self-confidence, their willingness to take responsibility, their ability to unhesitatingly acknowledge that they do not know something and above all, the air of reliability around them that screams “you can count on me”. As Ms. Passolas observed, “So, I think for me the leaders had this conviction, self-confidence without being cocky, and creation of trust”.
February 2, 2018
Leadership
How to Identify Leaders with Montse Passolas of Rimmel at Coty
Montse Passolas is a highly qualified Global Marketing and Branding board level executive with over 18 years of experience in marketing and communications, digital, new product development, retail, PR and business development strategy within leading brands and companies. Montse is a true international profile with experience working in Spain, France UK, US, and with an emphasis on the beauty and luxury markets with a proven ability to adapt and work efficiently in fast-paced organizations. She is a marketer with strong commercial acumen, online discipline and consumer focus; excellent leadership, charisma and communication abilities.
In this podcast we discuss:
- The shift from a boss to an inspirational leader
- The qualities which some of the best leaders portray
- Camillo Pane and Barack Obama - Why Montse believes in their leadership skills?
- Some of the learning platforms she uses to brush up on her leadership skills
- Empowerment, guidance, inspiration and recognition - Montse's secrets to supporting leaders
January 29, 2018
North America
2018 and Beyond for US Retail/CPG: Trends to Watch for
Macroeconomically, 2017 was better-than-expected in many ways for the US. Unemployment rates declined from 4.7% at the beginning of the year to 4.1% in the last quarter. Changes to tax rates are expected to put more money in the hands of consumers. Businesses grew, so not surprisingly, stock markets performed very well. Cotton Incorporated Lifestyle Monitor Survey revealed that “46% of consumers are optimistic about the US economy”.
All this would normally signal good news for consumer spending in 2018, except that the picture gets fuzzier when you consider that the University of Michigan’s Consumer Sentiment Index (CSI) declined in the last two months of 2017. Also, after a slight increase between October and November, the Conference Board’s Consumer Confidence Index (CCI) declined a tad between November and December. The latter is important because it is a measure of how consumers expect to feel about their spending in six months.
The mega trend - especially for Retail and CPG companies- is how American “consumers” are changing in terms of who they are and what they expect/value. In terms of the composition of the US marketplace, Baby Boomers, Gen X and Gen Y remain significant; however, Gen Z is emerging rapidly as a major consumer segment in its own right. It is estimated that Gen Z will represent almost 40% of US consumers by 2020.
Being true Digital Natives, Gen Z consumers are completely at-ease with social media and the convenience of buying services and products “on-demand”. This gives them greater heft in the marketplace. Ms. Roopa Varghese, Sr. Director for Digital Marketplaces and New Brands at Georgia-Pacific says, “Both demographics and in store habits (of consumers) have changed. Demographically, millennials are now in their peak earning years: they actually drive about thirty percent of CPG and Retail spend today”. These demographic shifts have major implications for what products CPG companies will need to offer and how/where retailers will need to sell them. In the past decade (after the financial meltdown of 2008), technology has accelerated the move to e-commerce, but consumers have become more conservative when it comes to spending on discretionary items. Price comparison web sites only facilitate such behaviours. To quote Ms. Varghese, “Consumers are much more cautious than they were prior to 2009 and they're much more value-driven”. This partly explains why discount retailers such as Dollar General and Dollar Shave Club are doing so well. Even in the apparel space, most consumers today seem to consider “discount brands” such as Walmart or Target and casualwear brands such as Gap or Old Navy as “best fitting with their lifestyles”.
America’s multicultural texture adds an additional layer of complexity to the changing consumer landscape. A Nielsen report titled “Multicultural Millennials: The Multiplier Effect”, released on January 18, 2018, contains some very interesting information. “Most multicultural Millennials are fully ambicultural, shifting from what was once a dominant family-based culture to a posture that blends a variety of cultures into a new mainstream”, the report states. The report points also out that multicultural Millennials are first generation professionals with rising disposable incomes and are in “prime acquisition mode”. The study estimates that this segment spends US$65 Billion directly- and influences US$1 Trillion in consumer spending on CPG and entertainment! It is no surprise that retailers and CPG companies are devising strategies to specifically target this segment.
While quality and price will remain critical determinants of the consumer purchase decision even in the years ahead, product attributes such as health and wellness, social impact and safety will become important too. Transparency and customer experience will become front and centre when it comes to shopping- whether online or in-store (or in dual mode). With online shopping becoming more convenient and secure, more and more consumers will adopt- but they will also expect higher levels of customization and personalization. Many consumers will to use a combination of online and in-store purchases. All this will place a greater burden on retailers if they are to consistently deliver on their brand promise. Industry players will need to rely on not just technology-enabled insights, but also product and service innovation. As Ms. Varghese observes, “For retailers, optimizing the omni-channel experience across all of the multiple touch points of the consumer journey both in-store and online, has become really important”.
January 22, 2018
North America
Retail and the US Macro Economy with Roopa Varghese of Georgia-Pacific
Roopa Varghese, Sr. Director of Digital Marketplaces and New Brands at Georgia-Pacific, provides her insights on how the US macro-economy has shifted and affected the Retail and Consumer Packaged Goods industry. Roopa has a lengthy business experience in the US, having been based there for over 12 years, having had leadership roles for the likes of The Boston Consulting Group and The Hershey Company before landing her current role.
In this Podcast, we discuss:
- US Market's recovery after the recession
- Shift of consumer behaviors as a result of macroeconomic turmoil
- The American shopper of the 21st century
- New in-store habits of 2018
- The influence of eCommerce in the current changing environment
- Trends in the next decade and beyond
January 12, 2018
Human Resources
The Right Reasons to Change: a Critical View
Being a recruitment and executive search professional, I frequently come across people looking to change their jobs. No big deal, you say? Well, yes, except that I continue to be struck by the reasons people commonly cite for seeking a job change. Irrespective of their roles and levels, I have heard reasons such as “tired of being taken for granted around here”; “stagnant in my role for too long” or “too many radical organizational changes”.
Reasons such as the above are often legitimate; however, is it not also possible that some of them are symptoms of individuals with the wrong attitude or being unwilling to adapt to change, thus impeding their performance and growth prospects? Moreover, what assurance does anyone have that a change will not land the individual from the proverbial frying pan into the fire?
I am not suggesting for a moment that people should not change jobs. But I do believe that job changes should primarily be driven by the “right reasons”. Examples of such reasons include the following:
- The opportunity to acquire a new skill or gain expertise in a new area (e.g. someone from offline retail joining an online retailer).
- A higher role even if it is in a smaller geography or division, as it can add high-impact experience to the resume/CV.
- The opportunity to spearhead a new business that is viewed as a high-growth engine allows visibility with senior leaders- an opportunity that may not otherwise be easily available.
- In a globalized world, emerging markets like India, China, Africa etc. are critical to organizational growth. The opportunity to gain experience in such environments can be seen as critical in the context of leadership roles.
- Leading or even being a part of a cross-functional project team is another kind of opportunity that is increasingly viewed as being valuable.
- The opportunity to work for a smaller rival- but at a more senior role- is something that can be immensely valuable.
- Certain industries are still in their sunrise phase, so even a ground floor opportunity with companies in such industries can make someone valuable not just in a line function, but potentially, also as in a staff/consulting role (thus allowing for careers to be extended).
January 5, 2018
Food and Beverage
Mike Sukitch
VP Global Sales Planning & Activation at Mondelēz International
This week we speak with Mike Sukitch a global Sales Executive with a distinguished Procter & Gamble and Kraft Foods/Mondelēz International career, which includes sixteen years in key emerging markets assignments and sixteen years in the developed markets of US and Europe.
He has a consistent and proven track record with extensive operational, P&L and strategic management experience performing as the highest-ranking sales officer or department head in several locations. His experience includes executive leadership on multi-functional country, regional and Commercial Board’s for the past seventeen years. He is currently the Vice President Global Sales Planning & Activation for Mondelez International.
During this podcast we discuss:
- Amazon's acquisition of whole foods and how that will change the retail industry
- The leadership skills that will be required in the rapidly changing and digital environment of future
- The importance of an MBA in today's world
December 20, 2017
Leadership
What I think separates the Top CEOs from the rest…
Pablo Isla and Bernard Arnault are on HBR’s 2017 list of “Top 100 CEOs”. HBR follows a rigorous ranking process that takes into account the CEO’s performance on environmental, social and governance criteria as well- which shows that financial performance, while necessary, is no longer a sufficient condition in evaluating CEOs.
This got me thinking about who else from amongst the current set of CEOs might stand out as “inspirational” for me, and how I might pick them. Without getting too hung up on the nitty gritty of specific criteria or methodology, I concluded that I ought to use three indicators to develop my own list of high-performing CEOs. I chose Innovation, Culture Change and Growth. I hasten to add that these are loosely defined terms and my evaluation does not follow a rigorous, scientific, or quantitatively-driven process!
Let me first define the three criteria in my own way. “Innovation” refers to the extent to which the CEO has visibly been able to drive the innovation agenda in his/her company and what results this has delivered. “Culture change” is a bit more amorphous; I use this term to include actions that have enabled drive change across the organization. The change could be a simple tweak in policy that empowers employees to take greater initiative or something more fundamental, such as metrics to measure carbon footprint and work towards specific reduction milestones- in turn making everyone conscious about energy, emissions, water consumption etc. I view “growth” as steady improvement in revenue and profits as well as expansion in footprint (number of stores, locations) or even broadening of product/service portfolio. Please keep in mind that I viewed each of these three criteria in the context of the industry and company.
On the basis of publicly available information, I picked five CEOs. The table below lists them and summarizes why. This list is by no means comprehensive, and I would be delighted to hear from you regarding who else ought to be in this list.
December 16, 2017
Retail
Kate Pearson
Vice President Digital Acceleration at Walmart eCommerce
LS International speaks with Walmart eCommerce's VP of Digital Acceleration, Kate Pearson.
We discuss with Kate about how an army background has contributed to her career in business. Being someone who's managed big teams in traditional Retail but is currently working on projects that are cutting edge, she's developed a leadership style that's enabled her to be successful in very diverse set ups, from the Army to Retail, Logistics and Strategy. "Many people think of the military as a command and control leadership style, but the military really encourages leadership development and is very influential on how we think about leadership in Business. I learnt how to motivate and develop future leaders and grow talent".
During the Podcast we discuss:
- A military background and leadership style in the business world
- Innovations Kate has developed in Omnichannel
- What's next in the eCommerce journey
- Moving from Operations to General Management
December 8, 2017
OTC
How Consumer Healthcare Companies Can Transform to Adapt to Online Purchasing: OTC Industry Changes (part 2)
As if industry consolidation was not enough of a challenge to companies in the Consumer Healthcare industry, there is now an additional threat looming on the horizon. This is the traction being gained in Europe and North America by online players. The first movers were online pharmacies which captured market shares from brick-and-mortar pharmacies as well as mail order suppliers. The trend is particularly visible in the UK and Germany, which together reportedly account for almost 80% of online OTC sales in Europe (source).
Thus far, the online threat has primarily been to non-prescription medicines and other healthcare products. But as other countries catch up and more branded products become available online, the scenario will change even more drastically. It has been reported that online retail giants like Amazon have already obtained pharmaceutical wholesale distributor licences in many US states, perhaps as a prelude to entering the lucrative online pharmacy retailing space (source). Such large players can buy directly from manufacturers in much larger quantities, giving them greater bargaining power in terms of pricing, priority supply, packaging etc. Their deep pockets don’t hurt either!
Even as consumers benefit from greater choices, faster delivery, lower prices etc., these changes will surely set the cat amongst the pigeons, as far as the Consumer Healthcare industry goes.
How should Consumer Healthcare companies respond?
Consumer healthcare companies need to prioritise their strategic responses and act quickly. They now have little choice but to fast-track their programs to “Go Digital”. This is not only about responsive web sites and mobile apps or putting their software “on the Cloud”; it also has back-end implications such as beefing up omnichannel capabilities both for forward and reverse supply chains (i.e. purchase/delivery as well as returns/refunds). Just as important are to create capabilities like real-time store level inventory visibility and empowerment of store level employees to make alternative procurement decisions, keeping in mind customer profile (annual spend, loyalty etc.) and the incremental logistics costs.
Sometimes, M&A may be a quicker (albeit more expensive) route to acquiring the above capabilities. It is thus not inconceivable that a GSK or Reckitt Benckiser acquires an online pharmacy. By doing so, they acquire a lot of the capabilities they can integrate with their own online businesses, giving them a possible edge. This strategy may become harder to execute because large pharmacy chains like the Walgreens-Boots alliance, Zur Rose of Switzerland, Euro Apotheek Venlo of the Netherlands or Poland’s Apteki Dbam o Zdrowie may also be looking at acquisitions to gain market share in emerging European markets. The biggest winner will be those who can quickly- and successfully- integrate the acquisition with their existing business operations.
Another strategic step Consumer Healthcare players might consider taking is to use technology-enabled personalization to a higher level. Although patient compliance per se may not be an issue for non-prescription drugs, in markets like France, Italy, Sweden, Poland etc. where online retailing is still relatively nascent, companies can use technology to track consumption and estimate reorder dates and trigger reminders. With an ageing population, such reminders can also be set on smartphones of family members who may or may not live in the same town/country. Such strategies will also serve to cement the emotional connection between companies and their consumers- the so-called plank of “caring” that brands in this space so keenly seek to build and nurture.
Till such time that the separation of pharmaceuticals and OTC consumer healthcare lines of business is complete through various M&A transactions, companies that straddle both segments must be cognizant of the fact that they have other customers too, beyond the end consumers of their products. For example, given the differences in healthcare systems in Europe and the US, Consumer Healthcare companies with significant business interests in the US will also need to renegotiate contracts and other terms with mega pharmaceutical distributors like McKesson and AmerisourceBergen as well as Pharmacy Benefit Managers (PBMs) like Express Scripts.
Undoubtedly, effecting all such transformation needs the appropriate technology applications and adequately scalable infrastructure. Technology is a skill area that requires large numbers of programmers, architects etc. so companies tend to focus on hiring the right complement of people for this function. But successful transformation also needs talent in new areas such as Analytics and IoT. Even more critically, experienced talent will be needed in non-technology areas to envision, implement and fine-tune the changes needed to processes, operating procedures, policies etc. Such expertise can only come by hiring experienced people who have worked in these industries and hence understand their nitty-gritties. Amazon, for example, has reportedly hired a former Director of Operations at Express Scripts. Smart companies will move quickly so that they get to choose from the cream of the crop, besides also being able to start the process sooner.
But as with everything Digital and Online, there are risks that will need to be managed. Customers could well order products from across national borders, where regulatory requirements are different. Apart from the ethics and safety aspects, regulatory compliance will be a challenge that needs to be addressed. Online purchases will involve transmission and storage of sensitive personal information such as credit card details, addresses etc. Data protection thus becomes critical- especially as regulations continue to tighten around the world.
Consumer Healthcare companies would do well to live by the motto of the Boy Scouts: Be Prepared!
December 4, 2017
Digital
Tharyn Estevez
Director of Marketing and Brand Activation CEE at Mattel
On this episode of The Career Success Podcast, LS International speaks with Tharyn Estevez, Director of Marketing and Brand Activation CEE at Mattel.
During the podcast, we discuss:
- Where the toy industry is heading and the role of digital play vs. traditional play.
- Artificial Intelligence (AI) and how employees will work with machines in the future.
- How Tharyn's various leadership roles have shaped her management style.
November 16, 2017
OTC
Frequent M&A Keeps Competitors at Bay: OTC Industry Changes (Part 1)
Birth of the consumer healthcare industry
The global consumer healthcare industry is a great example of consolidation shaping the evolution of the sector. Current players come from the pharmaceuticals & life sciences, healthcare and consumer products sectors. They have chosen joint ventures, M&A and divestitures/divestments to generate synergies, strengthen product/brand portfolios, access new markets (geographies and adjacent spaces) etc. simply to prepare for what each of these companies see as their future.
The wave of consolidation gathered momentum in the past decade for several reasons. Probably the most important factor was the blurring of boundaries between the OTC (over-the-counter) pharmaceuticals/healthcare and consumer products industries. The “consumer healthcare” market is generally seen to comprise analgesics; allergies, cold, sinus and flu; dermatological products; gastrointestinal solutions; and nutritionals. Euromonitor estimates retail sales in 2017 to be $233.2 billion- by no means insignificant. This is why so many global companies remain keen on getting a piece of the action.
How consolidation is shaping the consumer healthcare industry
For most top pharmaceutical companies, the era of blockbuster molecules has perhaps all but ended, thanks to more expensive R&D (given the advent of biosimilars, genetics based personalized medicine etc.), more stringent clinical trial regimes, and insurance companies and regulators exerting greater influence on prices. For most of these companies, which are originally from the USA, UK, Germany or France, the growing demand for generic drugs (manufactured by overseas players) in their own backyards put further pressure on top lines. In response, many companies have sold off divisions, choosing to focus on non-prescription, OTC products or specialty chemicals or just in one therapeutic area.
But this process too hit regulatory hurdles, with some companies forced to sell individual brands or product portfolios to comply with anti-trust regulations aimed at preventing market dominance. For example, Teva was required by the US FTC to divest 75 generic drugs as a condition for its acquisition of Allergan’s generics business (the largest anti-trust mandated divestiture in the history of the pharmaceuticals industry). This was another driver of M&A that helped create today’s consumer healthcare landscape.
Simultaneously, food and beverage companies also sought to enter this lucrative space, leveraging their own proximity to consumers. Danone acquired baby-food maker Numico in 2007, while Nestle acquired Pfizer’s baby-formula unit in 2012. These moves were responses to new opportunities emerging as a result of changing demographics. For example, ageing populations, increasing health consciousness, rising incomes as well as greater awareness of the need for special nutritional supplements for infants, women, athletes etc. have all contributed to rapid growth in both traditional and new geographies. Nestle is looking at sports nutrition and weight management products, which are high-growth niches within the consumer healthcare market. Companies like Coca Cola and Pepsico too are looking at healthy beverages and snacks.
As consumers began to rely on advice from their healthcare advisers on what nutraceuticals, cosmeceuticals and OTC products to use, these products began to be sold by pharmacies/drugstores as well as conventional retailers (and increasingly, by online retailers). This shift has required marketers to invest in building brands with high recall and manufacturers to put in place robust, reliable and extensive distribution networks. As these are assets that cannot be created easily, cheaply or quickly, M&A offered a quick, efficient and effective option. Reckitt Benckiser started to gain a toehold in the consumer healthcare area after acquiring SSL International Plc (makers of Durex condoms) in 2010. Most recently they have increased their footprint even more in the baby food segment by acquiring the Mead Johnson Nutrition Company earlier in 2017. This niche is seen to offer high growth in countries like China, where the one child rule was recently revoked. In 2011, P&G and Teva formed PGT Healthcare, a joint venture that has access to manufacturing capabilities, brands and distribution networks.
As newer paradigms emerge in treating various diseases and disorders, companies began to evaluate their core competencies and refocus on specific areas that played to their strengths. Pfizer chose to exit its consumer business by selling it to Johnson & Johnson in 2006. But it acquired a new portfolio through its acquisition of Wyeth in 2009. In 2013, Pfizer divested its animal health business to form Zoetis. In 2014, as part of its strategy to become the world’s second largest OTC company, Bayer acquired Merck’s OTC division for $14.2 billion.
Earlier this year, Sanofi and Boehringer Ingelheim successfully concluded a transaction in which the former’s animal health business (“Merial”) was transferred to the latter in exchange for BI’s consumer healthcare (“CHC”) business. Consequent to this strategic restructuring, the BI-Merial combine will focus on building leadership in the animal health products space, while Merck will integrate BI’s CHC team and build that business. Also in 2017, cosmetics giant L’Oreal SA announced its decision to acquire three skincare brands from Valeant Pharmaceuticals for $1.3 billion. Valeant is also selling its Dendron anti-cancer business to Sanpower for $820 million. Merck KGaA is reportedly considering a sale of its consumer healthcare business. Recently, Pfizer’s CEO has stated that the company is open to divesting its consumer business. Nestle, J&J, GSK, Bayer and Sanofi are all potential buyers of Pfizer’s business or individual brands.
Clearly, the industry is in a state of flux, with moves and countermoves being made by players with diverse origins. And with technology enabling disintermediation, changing consumer behaviour and preferences and shaping healthcare and retailing experiences, it is very likely that significant disruptions lie ahead for companies and consumers… but that’s for another time.
Please look out for part 2 which will address online retail and what the effect will be for consumers.
November 13, 2017
Online
How Retail is Responding to the “Amazon Effect”
With retailers adding more and more product categories, offering discounted prices and other mouth-watering deals, it is not surprising that more and more people are shopping online. Orders literally come in from across the world, so the number of locations to which products need to be delivered is increasing rapidly. Unlike deliveries to stores, deliveries to individual customers are often in small units, increasing costs. And with customers often promised “free delivery”, retailers are not always able to fully absorb the delivery costs, thus eroding margins. The hit to the bottom line is even greater if deliveries are made across continents.
The Amazon Effect
Amazon and other online Retailers are clearly disrupting the sector by seamlessly offering customers wider choice, guaranteed faster delivery and lower delivery costs. It is the net impact of these forces that is increasingly being called “the Amazon Effect”, which is forcing other players in the retail industry to respond. As several companies offer buyers omni-channel engagement, the trend (in large markets such as the US) of buyers ordering online and choosing to pick up the goods in store is rising.
As a result, the E-commerce space is becoming more and more like an iceberg: what is visible is only a small part- and it is what is invisible that can inflict serious damage. Visible are the responsive web sites and apps that attract buyers with an ever-growing assortment and the promise of “engage wherever, whenever”. It is the Supply Chain executives who, at the back-end, are left to figure out the invisible stuff- sourcing, distribution, logistics, and above all, ensuring that neither online nor in-store purchases are adversely impacted in a world where customers may start engaging in one channel and conclude the transaction in another.
Shifting battleground
The battle between retailers is decisively shifting to the “middle ground”. Traditional brick-and-mortar chains are investing heavily in responsive web sites, apps, more secure payment options etc. Companies like Amazon have started investing in brick-and-mortar stores because they realize that many customers still prefer to see, touch or taste before buying. Indeed, many buyers even opt to place orders via apps but pick up goods from a store, instead of seeking home delivery.
Strategic responses by the retail industry
Strategies being evolved by Supply Chain Managers in response to the Amazon Effect are either aimed at protecting revenue or reducing costs. Costs are squeezed out of the supply chains by focusing on new sourcing options, reducing transport costs etc. Revenue-enhancing strategies include giving greater real-time decision-making powers to staff at stores, warehouses and fulfilment centres, in order to reduce instances of lost sales due to SKU level stock-outs.
Some retail chains empower store level staff to move inventory from another store and promise customers that their order will be delivered to his/her address (or s/he can pick it up from a convenient store if that works better). Although there is an additional shipping cost involved in such cases, such actions could lead to a higher price is achievable than if the unsold inventory is eventually liquidated on sale. This is especially true for products with a short shelf life. Of course, this does mean “cannibalization” of online/e-commerce revenue by offline/brick-and-mortar revenue because retailers view “online” and “offline” as separate businesses. For such strategies to become more mainstream, senior leaders at retail chains must be willing to see the need to be sometimes cruel to be kind.
By taking such steps, retailers are able to experiment with value-added services such as same-day delivery or next-day delivery. Indeed, some retailers, such as H&M are even talking about delivering in specific time slots. It has been reported that Walmart has announced a program that incentivises employees to drop off orders on their way home if the delivery address is en route.
One cost-reduction strategy gaining popularity is to modify packaging to minimize the space it occupies. Material such as boxes and bubble wrap are eliminated if the product is not fragile and can be packed just as safely in an envelope. The reduced volume allows more individual orders to be shipped in one container, reducing the per-unit shipping cost.
In the days ahead, retailers and their logistics partners will innovate new ways to reduce costs. But it is important to keep in mind that for any strategy to be effective, it must be formulated in the context of the business. A one-size-fits-all strategy will not work. To paraphrase an industry expert, Satish Jindel, President of ShipMatrix: Amazon’s competitors cannot beat Amazon by adopting its model; they need to develop their own model by leveraging their assets, which include both warehouses/fulfilment centres and stores.
November 6, 2017
Supply Chain
Maureen O’Shea
Global Product Supply Senior Director for Biotech and New Molecules at Merck
On this episode of The Career Success Podcast, LS International speaks with Maureen O’Shea, Global Product Supply Senior Director for Biotech and New Molecules at Merck.
We discuss with Maureen how she adopts Nike's “Just do it” slogan in her approach to decision making and how it has led her to having successful hands-on experience in end to end supply chain across manufacturing, sourcing, logistics, CMO management, planning and contract negotiation. “It’s a very fast-moving world, we have to be brave, we have to be agile, we have to jump, and we have to remember that the only strategy the customer sees is execution.”
During the podcast, we discuss:
- The three actions or strategies a company can adopt to move into a new direction in Supply Chain
- The top three differences Maureen perceives between Pharma and FMCG
- Her approach on leadership
- How Maureen implements decision making when it comes to execution
October 30, 2017
Guest Article
Rethinking Retail at WIRED Retail 2017
By Joanna Allen Global Brand VP at Unilever
We hope you enjoy this wonderful guest blog by Joanna Allen on her thoughts after attending the 2017 WIRED retail conference.
Pitched as a step towards the long awaited 'store of the future', WIRED Retail 2017 showcased how existing & future technologies have the potential to rethink retail, here are my top 5 takeouts.
One: Tech creates amazing potential routes to re-imagine cost of doing retail business
Whether its applying the Airbnb model to fixed warehousing costs (check out Stowga, the EY Access Startup winner of the event) or utilising robotics to create profitable on-demand micro fulfilment (like CommonSense Robotics), the historical low margin challenge of operating business is being challenged and represents enormous potential.
Of course, you can create a business where the ‘fixed' costs are geographically roaming, perhaps in response to ‘nearest’ out performing ‘cheapest’ on search trends since May 28 2017. In the most charming of the sessions, Per Cromwell helped us imagine the store of the future which solves the logistical challenge of connecting shopper with product with a physically roaming store (Read more on @FastCompany about the ‘Moby’ beta test in Shanghai with 10 more to come in the next year).
Two: Search format will continue to evolve and search will continue to create the future business ideas
As technology enables it to do so, search will continue to pervade all moments in the consumer journey and the format will evolve to be fit for purpose - visual mobile search (take a look at Snap Tech or the epic growth of Instagram Stories), text desktop search, voice ambient search. Consistent with the theme I discussed with Simon Gosling at the Unruly #FutureHome about the fundamental building blocks of marketing (traditional, social, ambient).
The nature of the analytics of search are facilitating companies to create business in categories long forgotten (take slippers, as Martin Harbech brought to stage) and, through targeting the passive shoppers within any given category, discovery creates a consumer base that has historically been largely ignored.
Three: Mobile web gets the traffic while mobile apps get the time so build your brand experience in the apps that matter to people
The opportunity to create rich immersive brand experiences (discover, immerse, commerce) within the apps people spend most time becomes more viable with progressive web apps and/or Android instant apps (credit: Daniel Murray, Grabble).
Conversely, if you want to guarantee that at least half of the people who visit your site will leave without it even loading, use testmysite.withgoogle.com and see if your load time is over 3 seconds (thanks Jeremy Morris for the link).
Four: Trust matters, especially for conversion
October 26, 2017
Human Resources
The Threat Posed by Resurgent Nationalism to the Pool of Global Talent
The lure of access to new and profitable high-growth markets has, for decades, encouraged companies from the developed world (and increasingly, from emerging economies as well) to expand outside their home countries. Such overseas ventures are initially led by expatriate leaders from parent companies. But over time, local executive talent is successfully developed, with many of these executives eventually selected for roles in the parent company or to lead businesses in third countries. This trend has created an eclectic and globally mobile managerial talent pool that is multi-cultural in character.
Coinciding with the rapid emergence of Technology as a business driver and indeed, as a business sector in itself, another trend has visibly gained momentum in this millennium. Technology companies needing top-notch talent in STEM disciplines (Science, Technology, Engineering & Mathematics)- and other companies needing IT services and solutions- have relied increasingly on cross-border talent. Countries have even created visa regimes to facilitate cross-border mobility of talent.
But in the last couple of years, a wave of ultra-nationalism has surfaced across the world ostensibly on the back of stagnant economic growth, job losses and rising domestic unemployment. The influx of legal and illegal immigrants into EU, UK, North America, Australia etc. appears to have further fuelled this extreme right-wing thinking. This clamour seems to have resonated with the masses, in turn leading to outcomes such as BREXIT, the mainstreaming of political leaders with strong anti-immigration views (e.g. in Germany, France etc.) and the ongoing demand for an independent Catalan state separate from Spain. Even President Trump’s victory has been frequently attributed to his campaign promises to “make America great again”, in part by cutting down on H-1B visas that brought in foreign IT workers and denying tax breaks to companies that move operations overseas.
There is nothing wrong if countries put their citizens first; indeed, governments are obligated to do so. However, political leaders must keep in mind that advanced countries in particular are facing a demographic challenge with fewer people in the productive working age. In a world which is being shaped by technology-led innovation and disruption at a pace that has never been seen before, it may simply become impossible to get enough qualified people from within the country to fill certain categories of jobs. Especially for organizations that need expertise in cutting-edge areas such as AI, IoT, 3D printing, Composites and Advanced Material Science, Analytics, Digital Transformation, the Nanotechnologies etc. Also, innovation finds ways to evolve and diffuse globally- so if the core technology is developed in one country, its application to solving a certain problem may emerge from another corner of the world. The business mode to bring this innovation to the market may be the brainchild of a venture in yet another country. This is why global collaboration is vital.
In an era where companies are increasingly setting up globally distributed R&D centres, product development teams and captive IT units, collaborative innovation is critical to their sustained success. People must be able to transcend barriers imposed by cultural or linguistic differences to work together as a team focused on achieving the assigned goals. This ability is best developed when individuals work in other countries to gain “immersive experiences”.
If the current trend of countries wanting to make it harder, costlier and more time-consuming for companies to freely hire talent across national borders continues, it is fair to say that innovation will suffer in terms of quality, pace or even both. And in turn, this may well allow countries which have been at the forefront of innovation for decades to be leapfrogged by others.
Large, globally-recognized companies like Google and Microsoft are today headed by foreign-born leaders who were selected for their technical prowess and business acumen. PepsiCo’s leader was also born and raised on foreign shores. Fortune 500 companies across industry sectors- automobiles, pharmaceuticals, banking & financial services, consumer goods etc. have overseas talent leading and managing critical businesses or functions. Similarly, American and European executives are leading global businesses that originate from Japan, China or India. Their selection to these roles surely reflects their track record and the confidence that they can steer the organization in the days ahead. It is access to this experienced global talent pool that risks being sacrificed at the altar of ultra-nationalism and protectionist policies.
Please write and questions or comment's below.
October 13, 2017
Marketing
Patricia Corsi
SVP/ CMO Heineken Mexico
LS International speaks with Patricia Corsi, SVP/ CMO Heineken Mexico to find out more about her experience in delivering results and leading successful business transformation in Latin America and Europe. Her fluency in 3 languages, combined with a strong sense of curiosity allows her to be closer to consumer and customer and to use this connectivity to better drive product mixes and use experiences that serve unmet consumer needs.
During the podcast, we speak with Patricia on the following:
- Career and Leadership
- The biggest challenges FMCG companies are facing
- How technology is playing a key role in shopping and how technology will affect the way FMCG organizations work with retailers
October 2, 2017
Human Resources
Balancing external hires and internal promotions
The demand for professionals who can lead change within organizations is on the rise. Based on an article by David A. Shore, Harvard University, entitled Making Change Happen: Five Keys to Driving Successful Change Initiatives: “Given the rapid pace of change in companies today, demand for people who can lead successful change initiatives far outstrips the supply. In fact, 91 percent of HR directors say that by 2018, people will be hired on their ability to lead change.”[1]
The rapid nature of change means that more companies suffer a constant shortage of skills hindering their ability to meet market demands. Even companies with good professional development strategies may suffer this shortage, especially when we consider a world where new jobs, ones that never existed before, are emerging. Based on notes from the World Economic Forum : “Jobs exist now that we’d never heard of a decade ago. One estimate suggests that 65% of children entering primary school today will ultimately end up working in completely new job types that aren’t on our radar yet.”[2]
New roles and the rising need to manage change, can mean that securing specialized skill sets is a challenge. Take an example of a company specialized in hospitality, seeking to recruit a project manager for a Customer Relationship Management (CRM) implementation. For this project to succeed, the company shouldn’t just look for any project manager with generalist skills. Instead, this company needs to look for a project manager who has experience implementing this CRM system, and who has preferably worked within a similar size organization in hospitality. In this case, securing this talent will mean going external, be it with an internal recruitment team or a head hunter. The later can be beneficial as these consultants can leverage their network to find a match to the company’s requirements in terms of position descriptions, skill sets and cultural fit.
Internal hiring may succeed if companies can guarantee that their employees’ skill sets are kept current. However, based on Wade Burgess’ article in Harvard Business Review entitled Why Companies Overlook Great Internal Talent, even organizations that focus on learning and development struggle to keep their teams current, especially when it comes to technology roles[3]. This highlights the difficulty of relying solely on internal talent.
So, what is the best strategy?
Companies need to choose the strategy based on their requirements and current capabilities at the lower levels. Promoting internal talent is necessary but if a company needs highly specialized or scarce skill sets then the answer is sourcing externally – and more effectively by partnering with the right partner to ensure on time and on budget delivery of results.
[1] https://www.extension.harvard.edu/professional-development/blog/making-change-happen-five-keys-driving-successful-change-initiatives
[2] https://www.weforum.org/agenda/2016/06/10-jobs-that-didn-t-exist-10-years-ago/
[3] https://hbr.org/2016/10/why-companies-overlook-great-internal-candidates
September 21, 2017
Business
What is the role of business in the new age of political extremism?
The 2017 Edelman Trust Barometer Global Annual Study made for uncomfortable reading. Edelman shows that trust is very much in crisis amongst the general public right across the world. In fact, trust in all four of the major institutions: business, government, NGOs, and the media has fallen.
This decline in trust goes a long way in explaining the volatile political climate we find ourselves in. From Brexit to Trump to the election in France of a completely unestablished political party and president, the political world has gone from the safe predictable centre ground to a situation where we almost expect the unexpected.
It seems, certainly according to Edelman, that many people have lost faith in the idea of a system that works for them. This has led many to question all sorts of things, from globalisation to the pace of innovation to the erosion of social values.
It is certainly not a simple, black and white issue but what we have seen in the last couple of years are people’s concerns turning to fears. When that happens, we see a rise in populism. That is exactly what has been witnessed in several democracies across the globe recently. We have entered a new age of political extremism.
With people losing trust in business, the question has to be asked: What is the role of business in this new age of political extremism?
Many people believe that business can be - indeed needs to be - a bigger force for good in society. In our recent podcast, Joanna Allen, Unilever's Global VP at Hellman's agreed. She explained: "I’ve had the opportunity to spend time with the Edelman team who led the trust barometer... and I think it was really interesting to see that, you know, in the context of the political situation that we're all operating in you know in business actually is secondary to NGO’s in terms of levels of trust."
She went on to suggest that "while government continues to kind of be really significantly challenged, it’s exacerbated." This is an interesting point and one that will be covered at the forthcoming IGD Leaders' Forum in October.
One of the topics of the forum will be Reshaping Governments. The debate will address four key questions: How should the business world now engage in politics? Are businesses part of the problem, causing disaffection with ‘the establishment’? Do businesses need to step up and fill a void? Can business be a bigger force for good in society?
Industry leaders will be joined by leading experts, such as Fiona Dawson, Global President Food, Drinks and Multisales, Mars and David Goodhart, Author of ‘The Road to Somewhere: The Populist Revolt and the Future of Politics’. The session will provide the opportunity for debate, questions and audience voting, concluding with recommendations for action.
As Edelman suggest: "to rebuild trust and restore faith in the system, institutions must step outside of their traditional roles and work toward a new, more integrated operating model."
The need for business to be a force for good is certainly something that Joanna Allen feels strongly about. As she explained: "it’s one of the many reasons many people join Unilever. From its very foundation Unilever is a business that talks about value and values, so the perspective that we can have this kind of compounding growth model that benefits all stakeholders not just investors." Many experts are of the belief that people (and the fears they have) must now be placed at the center of everything a business does.
September 1, 2017
Supply Chain
Daniel Torres Dwyer
Executive Search Consultant at LS International
Check out this new interview with Daniel Torres Dwyer who will be heading up executive search for the Supply Chain function here at LS International.
Daniel has experience networking with top talent in blue-chip multinationals in Retail, Consumer Goods and Pharma. He has predominantly worked within Supply Chain, Sales, Marketing and General Management Engagements in Europe, North America and LATAM across the Director, Sr. Director and VP levels.
He was born and raised in Barcelona but with part of his origins in New Zealand and Ireland. He speaks five languages and holds a Bachelor’s Degree in Sociology from the University of Barcelona, where he also competed a 6-month study at the University College Utrecht.
In this 6 minute interview we will discuss:
- The level of demand for Supply Chain talent today
- How to attract the best talent in Supply Chain
- Upcoming talent trends
September 1, 2017
Human Resources
The Benefits of Diversity in the Workplace
Joanna Allen, global vice president for Hellmann’s at Unilever, joined us to chat in our recent podcast. With a wealth of experience as a local and global marketer in the food and beverages sector, Joanna is well placed to talk about the benefits of diversity in the workplace. Indeed, she thrives in environments that foster diversity of perspective.
Allen traces back her appreciation of diversity of perspective to her university days, at one of the UK’s most culturally diverse universities – the London School of Economics. In a career where she has held roles at Coke and Unilever, Allen explains how she “had the opportunity to work in roles with global scope and through this, have had the privilege of partnering with an incredibly diverse group of marketeers from developed and emerging markets, addressing quite distinct challenges.”
Joanna says she prefers “matrix style career paths” to hierarchical ones. For any new role, she asks herself the question: “What new learning experience does this present and then what kind of unique experiences or capabilities do I bring that will add differentiated value to the role?”
She sees diversity as being valuable, not just because gender and sexuality are represented, “but also diversity in terms of mental processing styles, different strengths and different experiences from geographies.”
Joanna Allen is not alone in her recognition of the advantages that diversity in the workplace brings. US company, Global LT, have been offering global solutions for four decades, including conventional services such as destination, relocation, and language training. Alongside these services, the company also provides cross-cultural training with a focus on inclusion and diversity.
The message is that diversity for diversity’s sake is unlikely to reap major benefits. However, when diversity is managed well and includes cross-cultural and inclusion training, the result is that all employees feel validated and valued – regardless of their cultural differences. Feeling valued boosts morale, and this obviously helps to create a positive workplace.
Joanna Allen believes that diversity can be a key driver for transformational change within an organisation. Indeed, teams that lack diversity might find that they leave inherent weaknesses exposed. As Joanna explains, “I would challenge a team that all thinks the same way or operates the same way, to really deliver transformational business ideas.” Furthermore, Allen believes that “diversity can really challenge a team and make it operate at a high level.”
Joanna is quick to acknowledge the importance of Aline Santos’ leadership in creating a strong diversity and inclusion agenda at Unilever. Allen believes there are two key actions that other companies should take to drive the diversity agenda. The first is to ensure that there is an active mentoring program. This need not be a formal program, but leaders should be thinking how their role within an organisation can help an employee to reach greater heights. She adds, “That’s one of the most powerful contributions a leader can make.”
The second action that Allen says will impact on an organisation’s diversity agenda is to highlight the role models within a company. As she explains, “there’s enormous value if you can identify with someone who’s forged a path similar to the one that you want to take.” Showcasing talent from outside an organisation is easily done, but shining the spotlight on the talent that exists internally will be even more powerful to an aspirational employee.
Hult Business School identify 13 benefits and challenges of cultural diversity in the workplace in 2017. Of the benefits, the way that having diverse cultural perspectives can drive innovation and breed creativity is notable. L’Oréal, as an example, attribute much of their success in emerging markets to the multicultural make-up of its product development teams.
Other benefits include having the ability to attract and retain top talent from a culturally rich and diverse talent pool. Having local knowledge, insight and cultural sensitivity within the ranks of an organisation can also be highly beneficial as a way of creating high quality and carefully targeted marketing campaigns across different territories.
Of course, diversity in the workplace can pose significant challenges too. However, the message of an article published last year in the Harvard Business Review still resonates. It is the fact that working in diverse teams can bring about challenges that can help them to be so effective: “working on diverse teams produces better outcomes precisely because it’s harder.”
Similarly, Joanna Allen talks of what can be achieved in challenging circumstances and in the face of adversity. In fact, she points to the best piece of feedback that she has ever received not coming from a work colleague, as you might expect, but from a medical professional, who – when Joanna’s son was born with a limb deficiency – had reassured her by saying just how adaptable he would prove to be with the challenge he faced – missing a hand on one arm.
This has influenced Joanna’s own leadership style. She explains, “I really try to coach more rather than direct my teams. I’m an absolute advocate of teams asking for forgiveness rather than permission.”
Having the ability to be adaptable is something Allen relates to the challenges currently facing FMCG sector. In fact, she describes mass segmentation as “the opportunity and the challenge.”
She believes that, in many ways, the challenge to transform the way business is done is tougher for larger, global companies than local businesses. Diversity in the workplace is not only a good way of dealing with the challenges of today; it helps to create a future facing organisation that will be able to cope with the challenges of tomorrow too.
To listen to the full podcast with Joanna Allen, click here.
August 15, 2017
Leadership
Joanna Allen
Global Brand VP Hellmann’s at Unilever
LS International speaks with Joanna Allen, Global Vice President for Hellmann's at Unilever on the importance of a diverse workforce for successful employee attraction and retention. Joanna discusses diversity and recruitment, exploring 'gender and sexuality, but also diversity in terms of mental processing styles, kind of different strengths and different experiences from geographies.'
During the podcast, we speak with Joanna on the following points:
- Working with diverse groups of people.
- The effect diversity has had on recruitment.
- Unilver promoting female leadership.
- The biggest challenges for business over the next 5 years.
August 1, 2017
FMCG
The rise of the private label: Do branded companies still hold the advantage?
Private label brands continue to grow at an impressive rate. Private label, or Store brands have an increasing presence in the both the online and offline retail space.
There is certainly now enough evidence to suggest that the rise of the private label is anything but a passing fad. It is a growing trend that has had a significant impact on most sectors and across many territories across the globe. In 2016, the market share of private label brands rose in 13 out of 20 European countries. In the UK that share was 46%. Switzerland even pushed above the 50% barrier, with 52% of the market share. Elsewhere on the continent, Germany reported its eighth consecutive year of private labels taking a market share in excess of 40%.
There are key players in the private label market who deserve attention. Aldi and Lidl, whose own Store brands account for over 70% of total sales, have enjoyed continued expansion over recent years. Aldi now has upwards of 10,000 stores in 19 territories. In the UK, particularly, Aldi and Lidl have increasingly stolen market share from the four major retailers in the grocery sector. In the US, Amazon is the fastest growing retailer. It is also a major player in the private label market. Their own Echo speakers account for 45% of sales among the top ten brands in America.
So, there can be denying how important private labels have become. There are several good reasons for this. Increasingly, everyday value is a key driver for customer loyalty and trust. Retailers can enjoy higher margins for their store brands compared to national or global brands. Private label brands have also seen an improvement in quality - both in the quality of the product itself and with packaging. Many retailers give prime locations to their private label brands - either near to tills to prompt impulse buys in stores, or through banners and pop-ups online.
However, despite the undeniable growing importance of private label goods, branded products do still hold several advantages over their private label counterparts.
Brand recognition and visibility is still a key advantage. National and global brands hold an enviable position. And with visibility and brand recognition, customer trust and loyalty often grows too. Many consumers are still more than willing to pay a premium price for the national brands that they trust. Typically branded companies enjoy larger advertising budgets. This gives them more flexibility to spend big on print, digital and television advertising. Private label brands tend not to invest as much in advertising, to keep their costs down.
But it's not just with spending power that branded companies have the advantage. They benefit from their size, scale and experience too. The sheer number of products that are manufactured and distributed each year means that branded product manufacturers are often more adept at ironing out any issues in their supply chains, sourcing and manufacturing.
July 18, 2017
Retail
Why Wal-Mart is Winning in the Face of Retail Sector Decline
The size and scale of Wal-Mart is nothing short of astounding when you consider the figures. Worldwide, the company employs 2.2 million people - larger than the total population of several countries. 1% of America's population is employed by Wal-Mart.
And all the more remarkable, perhaps, is the fact that Wal-Mart continues to grow at an impressive rate - all in the midst of a general decline in big box retailing. The company recently reported a 1.4% growth in its same-store sales in the US. Wal-Mart's digital sales are up by 63%, and the total revenue of the company is $117.5 billion.
While Wal-Mart continues to post positive results, other major retailers are clearly finding the current climate far more challenging. America's second-largest department store, Macy's, saw its share price drop by 17% after disappointing earnings were announced for the first quarter of 2017. Now Macy's are projecting a 4.3% decline in sales for the year. Elsewhere across the retail sector, other majors have reported disappointing and worrying financial reports.
A good example can be seen in the first quarter results of major retailer, Kroger. Same-store sales fell by just 0.2% - better than most and, on the face of it, hardly disastrous. However, Kroger has just issued a full year earnings forecast that is significantly lower than previous forecasts.
Intensified price competition and pressure on wages points to tough times ahead. Kroger's first quarter results came in the same week that Lidl opened its first stores in the US. The rise of such discounters is causing ever-greater pressure on prices. This, of course, comes at a time when e-commerce is putting further pressure on traditional bricks and mortar stores.
In response, Kroger is doing much to address these pressures. Aggressive expansion of its order-online/pick-up in store offering has occurred, along with significant investment in pricing and CRM. This will put pressure on short-term profit figures, but Kroger is obviously taking a proactive and strategic approach.
The lines between traditional bricks and mortar and e-commerce retail are becoming increasingly less divided. In 2016, Wal-Mart’s purchase of retailer Jet.com was a significant statement of intent, marking Wal-Mart’s interest in the online side of retail. Now, Amazon has followed suit with its acquisition of Whole Foods – a move that shows Amazon still see a future in bricks and mortar retail.
However, overall, the picture across the US retail sector is a grim one, and it is very much a picture of a major industry in serious decline. It is only really the performance of Wal-Mart (and the likes of Target and Home Depot) that is propping up the overall price performance. Such a decline could have a serious impact on the economy as retailers continue to close their stores and their staff lose their jobs. Retailers such as Kroger are showing that are reacting to current conditions effectively, but it is Wal-Mart that stands clearly ahead of the rest.
There are likely to be a whole host of contributory factors that have enabled Wal-Mart to continue to grow whilst virtually all around them continue to falter. However, in short, Wal-Mart's success can be linked to two main reasons. Firstly, the company remains true to its core purpose. Secondly, is the fact that Wal-Mart continues to execute that purpose effectively.
July 4, 2017
OTC
The continued evolution of the OTC market
Consumer healthcare, also known as over-the-counter medicines (OTC), is an industry that continues to grow and evolve.
In Europe, 80% of the online pharmacy market is shared by the UK and Germany. A recent study by James Dudley Management found that the industry is now worth almost 3 billion Euros. OTC products (non-prescription medicines) account for more than a third of the market.
Mail Order and Internet Pharmacy in Europe 2017: Reaping the Benefits of an Omnichannel Presence covers 17 European territories, as well as looking at the influence of both China and the US. The James Dudley Management report finds that the European online pharmacy market can be categorised into three segments: entry, developing and mature - based on the position of development the market in a country is currently at.
Entry-level countries (defined as having less than 4% of the overall market share of sales of non-prescription products) include the likes of Belgium, Bulgaria and France. Developing countries (those with 4%-10% of market share) are Norway, Sweden, Poland and Austria. Only the UK and Germany (with a 10%+ market share) are classed as being mature.
The digital retail landscape is evolving too. A split has emerged depending on the different regulatory conditions that exist across European countries. Some territories allow a full range on online pharmacy services, including prescription fulfilment. Others restrict the market to non-prescription products only.
The second key split is in the different approaches that markets are employing to the wider issue of retail sector e-commerce. In countries where there are major pharmacy chains, omnichannel retailing is the growing trend, and this is transforming the traditional 'bricks and mortar' retail sector. In territories where major chains are less prevalent, 'pure-play' businesses have more success in the market.
Therefore, there are markets where traditional and e-commerce retailing are merging and blending in an omnichannel approach, and other countries where the two methods of retail are still clearly distinct and separate. The difference is best exemplified by the industry's two largest markets. The UK market takes a mainly omnichannel approach - thanks largely to the big players: LloydsPharmacy and Walgreens Boots Alliance – and enjoys a 45% share of the overall online pharmacy and mail order market in Europe.
The major retail pharmacy chains have begun to integrate their traditional offer with online services and, increasingly, mobile applications, focusing on providing quick access to a brand for the consumer.
In contrast to the UK, Germany stands are the largest market for 'pure play' retailers. Online brands such as DocMorris - owned by Swiss Zur Rose - account for 90% of all e-commerce sales in the OTC segment.
Zur Rose is planning further expansion through an IPO later this year. Buoyed by the sales recorded by DocMorris in the first quarter of 2017, with sales up by 17.4%. Zur Ross is looking to expand into new markets as well as seeking to grow in existing ones. The company sees the OTC markets as being "ripe for digital disruption.”
June 18, 2017
Asia
What are the major challenges facing businesses in Asia?
As VP of Sales for J&J China, James Mounter has extensive experience of working in Asian markets. After holding various customer and innovation roles in the UK and across Europe, he moved to Asia in 2011. Whilst based in Singapore, James led the Asia Pacific Regional Customer Development team. In 2014 he relocated to Shanghai where he is currently leading the Consumer Sales organisation. With a wealth of experience behind him, James is perfectly placed to share his insights on employee engagement and the wider challenges faced by businesses in Asia.
Mounter reminisces on mistakes he made when he first moved to Asia saying, "I wasted about six months when I first got here by worrying about cultural differences, probably the biggest piece of feedback I give to people moving to Asia is that we're all people."
He sees leadership being about creating an environment that is more about "mission and vision" than day to day work and tasks. Building engagement and trust by harnessing the contributions that team members make to bring those teams closer together breeds success.
Making people feel respected within the team around them may be a universal aim, but what about the specific challenges in Asia that are distinct to those territories alone?
Mounter sees China very much as a unique territory, calling it "superheated" as so many businesses are looking to invest there. He describes Asia as a "centre of gravity for innovation." He cites beauty innovation coming from Korea and Japan as an example and Samsung, particularly, as an innovator that doesn't always get the credit it deserves.
Part of the problem, Mounter suggests, is that traditionally Asian brands are perceived to be ones who just copy the ideas of others. This outdated view is a challenge for multinationals and Samsung is an example of a company that is producing a steady stream of innovative ideas day in day out.
Local competition is another challenge that Mounter has observed across Asian countries. As the middle classes continue to rise across South East Asia and businesses find themselves with more capital, greater media access and better local understanding, competition is becoming more aggressive.
The third major challenge identified by Mounter is the rapid evolution of business. Whereas international companies have long term business plans and long-term planning cycles, local competitors take far less time bringing products to market. By co-innovating with manufacturing facilities, a product can be on the market within just three months, while the global average tends to be 12-24 months.
This means that many multinationals are struggling to meet these challenges, stay relevant, and maintain market share in Asia
James sees now as being "the time to really learn from local talent and hire outside." He goes on to explain that the "most successful hires here in J&J have been people who have been working in aggressive local startups who bring the culture and the network that we can tap into." Developing what he calls "the mind of the startup" is another way to overcome the current challenges. Mounter gives the example of L’Oréal in China, who have rapidly accelerated their process and started to work with third party manufacturers.
Finally, James brings everything back to leadership and believes that humility and flexibility to learn and embrace new ways of doing things hold the key to future success in Asia.
Click here to check out James Mounter on this months career success podcast!
June 6, 2017
Asia
James Mounter
Vice President Customer Development Johnson & Johnson China
The Edelman trust barometer says 51% of employees do not trust their CEO's and we know employee engagement and trust is a big factor in that and a popular topic right now. We were joined by James Mounter, VP of Sales for J&J China to discuss his thoughts on leadership, management and employee engagement.
Listen to the full podcast to hear James’ thoughts on:
· Actions that leaders can take to build trust within their organization
· The biggest challenges in Asia at the moment
· How the multinational organization will deal with challenges to keep relevant in the market
Thank you and please comment with any questions!
May 23, 2017
Leadership
Power inside and outside the workplace
If there is one particular aspect of leadership that is more difficult to grasp than all others, it could well be power. A recent workshop by Sonsoles Alonso focused on Power in Leadership and provided some valuable insights into an area that many leaders struggle with. Power is at the core of leadership but it can be a real challenge to get it right.
But why is power something that many find so difficult to handle? Well, the famous words of 19th century British politician Lord Acton spring to mind: "Power corrupts; absolute power corrupts absolutely." It is certainly true that in a variety of situations - both inside and outside the workplace - power often tends to go to people's heads. It's a simple truth that we are not generally trained to handle power well.
Julie Diamond was one of the first to study the various power struggles that we see all around us. Her book Power: A User's Guide explores how, although power may corrupt, using it to good effect is in our grasp. She looks at how it is not inevitable that power should take a negative course.
During the Power in Leadership workshop, Sonsoles Alonso talked about the various types of power that exist. Those that are well liked and respected can yield influential power. Formal power, on the other hand, is often exercised by way of either a threat or a reward. But, while power can be both internal and external, its use begins with awareness.
Psychologists John French and Bertram Raven identified five types of power in the 1950s. Legitimate Power is perhaps the most obvious - where an individual in a higher position has control of those of a lower status in an organisation's hierarchy. As Sonsoles Alonso explained, position in itself does not give you power. To really have power, you must first earn the trust of those you lead.
Leaders must command respect, not because of the position they hold but because others believe that they deserve to be in that position. A leader should then be able to exert their legitimate power
Alonso also covered the important question: Why does power corrupt some people, but not all? She believes that power becomes corrupt when motive, means and opportunity come together. However, motive is the only one of these factors that we personally have control over. Feelings of weakness and insecurity are often the underlying reasons why people abuse the power they have.
Leaders should always be mindful of how they are projecting themselves onto others. Using coercive power of threats and force will never win respect, loyalty or credibility.
Real power is the capacity to influence the environment you are in. This can come from the expert knowledge an individual possesses or from their experience. But to maintain influence leaders must strive to continue learning and improving at what they do.
Power is potentially in the hands of everyone. When abused, power has a destructive effect. When used effectively, power can have a real impact and help organisations to work through all types of difference and conflict.
We'd love to hear any questions you might have!
May 22, 2017
Marketing
How brand building has changed and how to stay relevant in the market
Branding is as important as ever, but brand building has certainly evolved over time. It is also now harder than ever for brands to remain relevant in the market. Gianluca di Tondo, Senior Global Brand Director for the Heineken® Brand, is passionate about brands and the power they have to make a positive contribution to society.
He is equally passionate about maintaining the highest standards of quality, and Gianluca's passion is matched by his extensive brand experience (19 years with Heineken). As he knows what it is like to be a part of such a globally recognised brand, he is in a perfect position to give some highly useful insights about brand building and how to stay current and relevant to audiences.
The position of the Heineken brand is important to consider. It is, after all, a brand with a huge legacy - especially in the Netherlands. The Heineken Museum in Amsterdam acknowledges all the key moments in the history of the brand. Of course, for a brand to have such a prominent standing, it is an enviable position to be in, but Gianluca identifies the need to change and evolve. This inevitably presents some interesting challenges.
Gianluca is clear that brands need to recognise that step changes and turning points are required to stay relevant in today's market. He explains how Heineken realised that the brand needed to move forward, not just in terms of performance but also in terms of consumer perception. He says, “Today we are talking a lot about the purpose of the brand, and we are working hard to make the purpose for the Heineken brand resonating more with the consumer.”
Gianluca identifies two key changes that have shaped the way Heineken continues to build its brand. First and foremost, he sees the biggest change to be in the consumer. People, especially millennials, are now driven by different motivations than previous generations. There has also been as shift in the relationship between the brand and the consumer, which Gianluca puts down to a digital revolution. With the beer business being traditionally driven, Heineken recognised the need for change. Gianluca explains: “everything became digital and for the first time you have a media that is not only is a media, but also a content provider, so for marketers, we had to adapt ourselves.”
With the new target audience changing at a rapid pace it is vital that brands realise that what is on trend one day might not on trend tomorrow. Gianluca is clear that brand marketers should never feel that they have 'cracked it' with their target audience. He advises that brands need to be “at the edge, because you know tomorrow there's going to be a different challenge. Tomorrow there are different channels that are going to rise. You need to be very quick in mastering all these changes.”
Today's brand building requires companies to have their fingers firmly on the pulse of things, or as Gianluca describes it "at the edge." This has striking similarities to the ideas shared by our recent podcast guest, Atilla Cansun from Merck Consumer Health Company. Atilla talked of Fingerspitzengefühl: "which is this ability to read a little bit in between the lines, ability to connect actually with the situation that, you know, smell the air a little bit in the room."
From a brand building perspective both Atilla and Gianluca identify a key change as being the need to make a difference on "emotional territory." As Atilla described it, the goal should be to "build brands that open people's hearts that people fall in love with."
It's interesting to note that Gianluca's comments echo those of previous podcast guests. Stijn Demeersseman from L’Oréal talked about the impact that bloggers and vloggers have had on brands. For a family-owned company like Heineken, controlling the brand is very important, but Gianluca recognises that “we are living today in a moment which you cannot control everything because the consumer wants to create content on your brand.”
Speaking about the need for the Heineken to promote its purpose and to continue to resonate with target audiences, Gianluca says that he “would really love to be remembered as the guy who do it”- showing that personal goals and passion still drive him on, even after nearly two decades with the brand.
Please let us know if you have any questions or thoughts!
May 8, 2017
Guest Article
A New Approach to Consumer Beauty: Leveraging Trade Marketing for Growth
By Nigel Stokes [1] Vice President for Global Sales at Coty, Inc.
After 15 years working in Trade Marketing across the CPG industry – primarily in healthcare and home cleaning – I now find myself faced with a new challenge: the U.S. consumer beauty industry.
Buffeted by quickly-shifting trends and new entrants, large consumer beauty manufacturers have little choice but to be nimbler than many of their CPG peers. Yet the questions that underlie any successful strategy are simply variants of those I have asked myself time and time again.
- The beauty industry is changing – how and why?
- The U.S. retail landscape is shifting – what are the drivers?
- Large beauty manufacturers will be affected – in what ways?
- Surviving in this new environment will be challenging – how can Trade Marketing help?
The beauty industry is changing – but how and why?
We live in an age of disruption, and the consumer beauty industry is no exception. Four dynamics, all of which are accelerating, are changing what beauty consumers want and what beauty manufacturers need to deliver.
- Demographics: An ever-more diverse country, paired with a growing emphasis on inclusiveness, has pushed beauty manufacturers to finally create and market products that help every consumer become their best selves. But diversity is only one element. Manufacturers will also need to become keen readers of demographic trends as the population ages and becomes more cosmopolitan.[3]
- Lifestyle Trends: Consumers are demanding different things from the products they buy. For one, more than ever, they demand products that engender health and wellness. Organic, in the minds of many consumers, is now the expectation. Manufacturers will need to keep pace with consumers’ lifestyles, which will increasingly emphasize products designed with health in mind.[4] In tandem with this shift, manufacturers will need to decide if the millennial shopper is more influenced by marketing or what is on trend. Increasingly, consumers care more about products being on trend and having the right value proposition than being attached to traditional marketing strategies, such as celebrity endorsement.[5]
- Digital Disruption – Access to Information: With a single swipe, a consumer shopping the aisle can access limitless information on any product. The days of simply deciding between Brand A and Brand B are long gone, replaced by consumers’ ability to leverage reviews of individual products to decide what is best for them.[6] The proliferation of peer-to-peer information – product reviews on retailers’ websites, blogs, and social media – means that brands need to craft a compelling story for every product. Consumers now play a central role in the dissemination of information about a product, meaning that manufacturers need to communicate that story through an array of channels.
- Digital Disruption – Path to Purchase: The traditional point of contact between beauty manufacturers and their consumers, the cosmetics aisle, may be giving way to a digital experience. Experts project the number of smartphones in the U.S. to reach 310 million by 2019.[7] Though beauty remains in the early adoption phase when it comes to digital – only about 7% of purchases are online – digital purchases could accelerate.[8] Should they do so, beauty manufacturers will have to craft a shopping experience from bits and bytes that is as compelling as the in-store experience they have honed for decades.[9]
Smaller brands have grown substantially faster than their larger
competitors. Source: Nielsen
Importantly, however, these brands avoid tying themselves to a single strategy. When trends change, they change too. This agility enables small brands to appeal to the ever-changing beauty consumer, one no longer defined by traditional demographics like age, race, gender, or income.
If large beauty manufacturers hope to compete in this new environment, they will need to take a page – or several – from these smaller brands’ playbooks. They will need to stop playing catch-up and innovate before the innovators. They will need to foster ownership and innovation amongst their employees. And they will need to do so while building loyalty with consumers who have more choices than ever.
The U.S. retail landscape is shifting – what are the drivers?
Pundits and product managers alike are poor predictors of the future, but there is one thing of which they can be certain: The U.S. retail landscape will continue to change at breakneck speed for the next 5-10 years. Retailers and manufacturers will have no choice but to adapt or risk irrelevance.
For decades, manufacturers could depend upon traditional channels – hypermarkets, drug stores, and supermarkets – to deliver consistent growth. But to paraphrase one recent Nobel laureate, the times are a-changin’. Recent years have witnessed the proliferation of a litany of new players in retail: deep discounters, premium niche banners, membership-based clubs, and e-commerce. All have taken share from the traditional leaders; and the trend is poised to continue.[11]
Traditional retailers are threatened by e-commerce, deep discounters, and specialty players. Source: Nielsen
As German discounter Aldi continues its U.S. expansion and competitor Lidl aggressively enters the market, the deep discount segment is expected to grow two- to three-fold. Meanwhile, beauty giant Ulta continues to open new stores while growing same-store sales at a double-digit clip.[12] Even the biggest retailers have recognized the trend: Look no further than Walmart’s $3.3 Billion purchase of e-commerce challenger Jet.com.[13]
Therefore, if traditional retailers hope to compete, they will need to craft and sell a compelling value proposition, one capable of dislodging the ease of shopping from home or the economics of buying in bulk. An example of a firm that has successfully done this is Sephora. The rapidly-growing retailer has managed to create a shopping experience superior to drug or big box stores, but also managed to keep prices on its private label brands only slightly above what consumers would pay elsewhere.[14]
Underlying these shifts are changing consumer attitudes and shopper behaviors. American beauty consumers are defining value in new ways, emphasizing opposite ends of the price spectrum. Some, expecting low prices, embrace private labels and are happier than ever to buy in bulk. Others, meanwhile, prioritize fresh, healthy alternatives and a premium shopping experience over the traditional household names. And the common thread across all consumers? An ease with buying their beauty products online.
Large beauty manufacturers will be affected – in what ways?
The challenge, then, is clear. But the myriad of options on the table for confronting it has prevented large beauty companies from effectively taking action. Too often, a clear strategy is lost in the jumble of short-term fixes and uncertainty as to the best path forward. As such, large beauty manufacturers must elevate two priorities above the rest:
- They must hold their ground and reignite growth with traditional retail channels without overinvesting. Beauty manufacturers cannot forget that even though new channels drive growth, the bulk of their business still comes from their traditional partners.
- They must strategically shift resources to win in new growth channels, especially digital. Playing catch-up will never work: positioning themselves as the go-to players in these growing channels is the only option. That is, beauty manufacturers must “innovate before the innovators.”
- Define future business potential and risk
- Reallocate resources and build the right commercial capabilities for new growth opportunities
- Play an active role in the M&A market, but never forget to grow purchased brands
- Be prepared for mounting costs demands
- As always, the first step would be to “understand your consumer” – traditionally the role of brand marketers, whose work is ultimately to deliver against unmet consumer needs.
- Next would be channel prioritization – where and how to find the target shoppers (who may or may not be the end consumer). For some CPG companies, this is easy. Coca-Cola, for example, only has to put their product within arm’s reach; it is as simple as being everywhere, all the time. But consumer beauty has no such luxury. Facing a complex and shifting mix of shopper targets and categories, a beauty manufacturer will have to incorporate detailed analytics into its channel prioritization to understand who is shopping where, for what, and for what occasion.
- The third step would be to craft a compelling narrative with which the manufacturer will navigate the complexities of the target shopper, industry trends, and retailer strategies.[21] For example, selling to the 20-35-year old segment would require a narrative that takes into account the current trend for wash-out hair artistry in the hair color category. But it would also require a more logistical mindset – that is, a recognition that for a host of reasons, including store opening hours and locations, the target shopper could be likely purchasing products outside of the traditional grocery and drugstore settings.
- The final stage would be deploying the “4P” mix: product, place, price, and promotion. But in today’s dynamic environment, rehashing well-worn frameworks will not be enough. Savvy Trade Marketers will transform the 4P’s into the 4E’s.[22]
- Experience: Today’s consumers demand products that fit in seamlessly with their lives. This necessitates that Trade Marketer set strategies to bring a proposition to life, giving the shopper a product experience rooted in their needs.
- Everyplace: Shopping now happens in more places than just the beauty aisle – look no further than the proliferation of blogs focused on beauty products for proof. This forces manufacturers to ask how their products – and those products’ marketing and display – relate to the shopper’s environment, even if that environment is the ubiquitous digital realm?
- Exchange: Traditionally, Trade Marketing professionals have thought that shoppers make decisions as the 4Ps would have us believe. But nowadays, they need to expand their thinking to embrace a more holistic vision of the shopping experience. Purchasing a product is really about an exchange of value – it takes shopping beyond the immediate decision of “Brand A or Brand B,” and is instead about linking each product to a clear value proposition. Moreover, shoppers demand a value proposition that resonates not with an unobtainable vision of beauty, but rather with their best selves.
- Evangelism: This rethinking of the first three of the 4Ps brings us to the fourth – rethinking promotion as Evangelism. Only with an experience that inspires can manufacturers hope for consumers to engage with the brand and spread the word to friends and family. In an increasingly digital world, this prerogative will become only more critical.
May 3, 2017
Marketing
Gianluca di Tondo
Senior Global Brand Director for the Heineken® Brand
Attracting and retaining talent is a hot subject in today’s market. Employers are keener than ever to find out how they can adapt and lead today’s millennium. Gianluca di Tondo, Senior Global Brand Director for the Heineken® Brand explores how ‘they need to see you not only as the boss, but a mentor. You need to keep getting excited, you need to fuel their passion, and they need to see the passion in you.’ Gianluca is self-motivated and entrepreneurial with an edge in global marketing, managing partnerships, motivating teams and getting things done.
Listen to the full podcast to hear Gianluca speak about his thoughts on leadership, goals, and what it’s like to be a part of one of the most well-known brands globally.
April 26, 2017
Human Resources
Retaining talent, from Millennials to Directors
Successful leadership never comes easily. Being able to drive a team forward and produce outstanding results is difficult enough in itself. To be able to do this consistently, and to continue to push forward and deliver results year on year is a quality that all leaders want to have, but it's a quality that not every leader possesses.
Atilla Cansun, Chief Marketing Officer and Executive Committee Member of Merck Consumer Health Company, is one leader who can genuinely claim to possess the qualities needed to lead teams successfully. He is responsible for leading a global brand portfolio featuring 9 strategic brands in 6 different categories - a portfolio just short of 1 billion Euros.
Atilla Cansun joined us in our latest podcast where he shared his views on leadership, the challenges that teams are currently facing, and one of the biggest challenges of all - how to attract and retain the best talent, from Millennials to Directors.
Atilla says, “I am fully convinced and wholeheartedly dedicated in making a difference by applying emotional intelligence.” Indeed, emotion is a recurring theme in what Atilla has to say and what makes Merck Consumer Health a little bit different from most companies.
On the subject of leadership, Atilla is adamant that the key determiner that makes all the difference is the application of emotional intelligence. He believes that showing emotional intelligence is needed for leaders to adapt to the different teams they lead, and to recognise the most appropriate leadership style for a particular team, time or situation.
Atilla also advocates moulding leadership style to 'the spirit that is needed in that team'. Again, possessing the necessary emotion and feelings to meet the challenges ahead for a team are forefront in Atilla's mind. At times this might call for an assertive approach, by pushing and motivating team members. Other times, a more caring and supportive strategy and a 'putting your arms around the team' approach is required - either way it is the ability of a leader to tune into the team's emotions that is vital.
The emphasis on looking at things in a slightly different way continues when Atilla explains his thoughts about how to recruit and retain talent. He speaks of the need to look beyond academic grades, or how successful candidates might have been in their internships. Instead, he believes that companies should be looking for 'fingerspitzengefühl' - the German term for a person's ability to be able to connect with a situation and people, to look between the lines and be intuitive and astute enough to, as Atilla puts it, 'smell the air a little bit in the room'.
Recognising the ability of a candidate to pick up and convey emotions at the recruitment stage is seen as being vitally important to Merck Consumer Health. It is also seen as being crucial in terms of a capability building perspective. Merck Consumer Health also places a strong emphasis on recruiting millennials to the company and taking on many junior employees. Atilla observes that many millennials - especially the very best talent - are looking beyond salaries and are more concerned with a company's 'higher order purpose'.
For Merck Consumer Health the purpose is 'We One Hundred'. This is the dream and a vision that one day people will have the right and the necessary support to be able to live for 100 years. The ideal that the older generation will be able to be integrated to become more productive and make a contribution to the younger in society extends to Merck's own employees, with the same focus on emotional intelligence and sensitivity.
To hear more from Atilla on the Career Success Podcast, tune in here.
April 25, 2017
Human Resources
The importance of employee engagement
Employees are a company's greatest asset. That is something that the vast majority of people can agree on, but crucial to being able to get the most from your most valuable asset is the need to ensure that employees are fully engaged.
Companies should be asking themselves - just how engaged are our employees? An engaged workforce is one where the culture of a company is carefully shaped and its values and ethos is embedded into every aspect of the company and in everything that employees do.
To enable this to happen, it is vital that employees feel appreciated and valued. It is important that they feel trusted and connected. There must be a culture of transparency and openness permeating though the whole organisation.
In a practical sense, employee engagement is increasingly important in the current climate. In sports, you hear of attack being the best form of defense. Well, employee engagement is the best form of retention.
The best talent that you have at your organisation will never be short of other job options, and the cost of recruiting and on boarding replacements for any employees is considerable. The answer is simple - engage your staff so that they simply do not want to leave.
The latest Engagement Excellence Live event was held in London on April 6th. #EnExLive provided a wealth of valuable insights and advice about how best to engage employees. It is also highlighted some eye-opening statistics that show how far some companies need to go to improve the engagement of their staff.
"51% of employees don't trust their CEO" – 2016 Edelman Trust Barometer
Glenn Elliott, founder and CEO of Reward Gateway, and one of the keynote speakers at #EnExLive produced the startling stat above. It shows the scale of the job, in building trust, improving communication and creating a transparent culture, which many companies undoubtedly face.
Glenn Elliott follows a clear principle as a CEO. He says that he focuses 40/40/20 on People, Product and Profit, in that order. 30 million surveys taken in Gallup polls show that where employee engagement is high, stock markets returns are doubled, employee turnover is halved, and innovation increases.
Employee engagement inspires and leads to innovation
Google famously led the way a few years ago with its '20% Time' - freeing up employees to work on creative side projects for a day a week. It resulted in some of the company's best innovations: Gmail, AdSense and Google News. The Google staff canteens are known for their gourmet menus (all free to employees) and other benefits that Google staff enjoy include the likes of free massages and sleep pods.
Many companies will not be in a position to match Google in terms of scale, but the principle of 'people first' certainly can be followed. The #EnExLive event provided several innovative ideas for how companies can engage their employees and some useful guidance about the approaches that should be taken
Employees buy into what they help to build
Linda Jodrell, HR Director at Citation, argued that employees will be greater supporters of the things that they have helped to build and create. Shared values are needed to keep people engaged, and she states that, "It is better to have no values, than disingenuous ones."
As financial well-being will lead to higher rates of employee engagement, another suggestion at the event was to set up a system of employee loans, saving schemes and advice on debt management.
A staff lottery with a monthly prize draw would be another way to engage employees. Some companies set aside a well-being budget, to provide yoga classes, the opportunity to learn a new language or to offer gym membership.
There are a multitude of ways that companies can work to engage employees. According to Deloitte, 78% of employees do not feel recognized and the importance of leaders being open, straight-talking and transparent is obvious.
Employee engagement doesn't need to be about grand gestures. It's often the small things that matter the most. Any steps that companies can take to improve the work space and well-being of its employees will be appreciated. What is vital is that the benefits that are on offer really match the needs and desires of the workforce.
Please write any questions or comments that you may have!
April 12, 2017
Guest Article
The Century of Teams By Miguel Premoli the Vice President of Talent Management Europe and South Africa at PepsiCo
By Miguel Premoli the Vice President Talent Management Europe and South Africa at PepsiCo
“In the past century society privileged individual leadership in all areas: in business, science, academia, politics, in all fields of human activity, geniuses were sought to solve everything.
In the 21st century we have understood that things go well when teams are assembled, combining the efforts, professionalism, experience and good intentions of many people.”
Mauricio Macri, in his acceptance speech as Argentine president. December 2015.
The world has become too complex to rely on individuals alone to solve ever changing problems. Organizations need tap the collective knowledge of its individuals and revolve around networks of teams to succeed in the current environment.
1. Context: Megatrends, Technological Disruption and Exponential Change
Megatrends
According to Frost and Sullivan, a megatrend is a large, social, economic, political, environmental or technological change that is slow to form. Once in place, megatrends influence a wide range of activities, processes and perceptions, both in government and in society, possibly for decades. They are the underlying forces that drive trends. Megatrends inform the required transformation, strategic choices and capabilities that organizations needed to survive and thrive in the future. PWC group them into five – globalization, demographic changes, urbanization, technology changes and climate change and sustainability
Technological Disruption
The Institute for the Future, a California based research center specializing in long-term forecasting, identified six drivers that will disrupt and reshape the workforce landscape:- Extreme longevity: Increasing global lifespans will change the nature of careers and learning
- Rise of smart machines and systems: Workplace automation will nudge human workers out of rote, repetitive tasks
- Computational world: Massive increases in sensors and processing power will make the world a programmable system
- New media ecology: New communication tools will require new media literacies beyond text
- Super structed organizations: Social technologies will drive new forms of production and value creation
- Globally connected world: Increased global inter connectivity will put diversity and adaptability at the center of organizational operations
- Sense –making: Ability to determine the deeper meaning or significance of what is being expressed
- Social intelligence: Ability to connect to others in a deep and direct way, to sense and stimulate reactions and desired interactions
- Novel & Adaptive thinking: Proficiency at thinking and coming up with solutions and responses beyond that which is rote or rule-based
- Cross Cultural Competency: Ability to operate in different cultural settings
- Computational thinking: Ability to translate vast amounts of data into abstract concepts and to understand data-based reasoning
- New Media Literacy:Ability to critically assess and develop content that uses new media forms, and to leverage these media for persuasive communication
- Transdiciplinary: Literacy in and ability to understand concepts across multiple disciplines
- Design Mindset: Ability to represent and develop tasks and work processes for desired outcomes
- Cognitive Load Management: Ability to discriminate and filter information for importance, and to understand how to maximize cognitive functioning using a variety of tools and techniques
- Virtual Collaboration: Ability to work productively, drive engagement, and demonstrate presence as a member of a virtual team.
Exponential Change
The concept that technological change occurs at an exponential rate was first introduced by Gordon Moore, co-founder of Intel, who in 1965 predicted that every year the number of components per integrated circuit would double. Advancements in digital electronics are strongly linked to Moore's law: quality-adjusted microprocessor prices, memory capacity, sensors, and even the number and size of pixels in digital cameras. Digital electronics has contributed to world economic growth in the late twentieth and early twenty-first centuries. Moore's law describes a driving force of technological and social change, productivity, and economic growth
- Artificial Intelligence
- Nanotechnology
- XD printing
- Robotics
- Virtual Reality
- Biotechnology
2. Impact on Organizations
No matter if it’s the evolution of megatrends, technology disruption or exponential change it is clear that businesses cannot be successful with an organizational model of hierarchy, command and control designed 100 years ago. Other models such as the Matrix organizations of the 70’s and 80’s failed as they conceived organizations as a set of pyramidal boxes filled with individuals that performed tasks, rather than focusing on a dynamic use of individuals and teams to serve customer needs. It’s no surprise that in Deloitte’s last Business Leaders’ survey, they placed organization redesign as their number one priority to respond to disruptions in the marketplace. The study identified that some Companies are decentralizing authority, moving toward product- and customer-centric organizations, and forming dynamic networks of highly empowered teams that communicate and coordinate activities in unique and powerful ways. This is giving rise to a new model of organization based on “network of teams” with a high degree of empowerment, strong communication, and rapid information flow. These organizations, which utilize principles based on Stanley McCrhystal book, Team of Teams, have several fundamental components:- Move people into customer-, product-, or market- and mission-focused teams, led by team leaders who are experts in their domain (not “professional managers”).
- Empower teams to set their own goals and make their own decisions within the context of an overarching strategy or business plan, reversing the traditional structure of goal and performance management.
- Replace silos with an information and operations centers to share integrated information and identify connections between team activities and desired results.
- Organize these teams around mission, product, market, or integrated customer needs rather than business function.
- Teach and encourage people to work across teams, using techniques like “liaison officers” as the US military, “hackathons,” open office spaces that promote collaboration as Apple Inc. and Cleveland Clinic, and job rotation to give teams a common understanding of each other.
- Enable people to move from team to team as needed—similar to the way experts come together on Hollywood movie sets or in global consulting firms—and then ensure that people have a home to return to once a team-based project is done. This changes the concept of a “job description” to that of a “mission specialist” or “technical specialist.”
- Shift senior leaders into roles focused on planning, strategy, vision, culture, and cross-team communication.
3. Impact in Talent Management practices
The new organization based on network of teams will require a dramatic redesign or elimination of Talent Management practices and process as well as a redefinition of how to lead in the new environment. Most of the work in the talent Management space is based on work done during the post-world war Industrial area analyzing big corporations that operated in stable environments. Both the science behind the tools as well as the tools themselves have focus on the organization or on individuals, but lacked focus on teams, team composition, performance and dynamics. The new model of work will force us to change job roles and job descriptions; rethink careers and internal mobility; emphasize skills and learning as keys to performance; redesign how we set goals and reward people; and change the role of leaders.Structure
One may ask, does this New Organization model even need an org chart? Of course, people need to know how the company is organized, who oversees what, and where to go for information and decisions. But as the research shows more and more, the days of the "org chart" are starting to disappear, because the organization itself operates more like a sports team or consulting firm, and less like a top-down bureaucracy than ever before. What we really need today is a "network analysis" of the company (the discipline is called ONA) that tells us who to call for what, regardless of where they work.Careers
In today's digital workplace the value of an individual can be enormous, if they have the skills, passion, and network connections to do what is needed. Why would we penalize or hold back someone's ability to grow by telling them that only by moving "up" you progress in the company? A consulting, firm for example, decided that the whole idea of a "HIPO (high potential)" is now obsolete, and it must empower everyone to grow through lateral projects and roles, continuous development, and challenging assignments.Leadership
What should high performing leaders do, who should be promoted to top leadership, and how to design reward and alignment systems to help leaders contribute. Leaders of teams and networks must promote practices that bring people together, help people develop, and focus on topics like onboarding (people change teams regularly), engagement, career transition management, and continuous learning. These practices are of even more important today because companies are realizing that if they can't help people operate in the team, transition from team to team, and stay current of new trends- they can't perform as a business.Dilemma
All these changes will require addressing the issues of individual based and team based practices, and key to this is the dilemma of collective creation and individual recognition. Whilst the value and strength of individuals in the new setting comes from their connection with the collective intelligence of others, the need for individual recognition remains. The challenge for Leaders now is to navigate the boundaries of what is collective and what is individual, mastering the continuous tension between the two.
April 3, 2017
Marketing
Atilla Cansun
Chief Marketing Officer and Executive Committee Member of Merck Consumer Health Company
Successful leadership is not easy. Driving a team forward and producing outstanding results time and time again is not something that every leader is able to do. During this Podcast, we speak with Atilla Cansun, Chief Marketing Officer and Executive Committee Member of Merck Consumer Health Company. Atilla is responsible for leading globally a brand portfolio of almost a Billion Euros, which consists of 9 strategic brands in 6 different categories. If anybody knows how to lead a team successfully, it’s Atilla.
Atilla says “I am fully convinced and wholeheartedly dedicated in making a difference by applying emotional intelligence.”
Listen to the full Podcast to hear Atilla’s opinions on:
- Changing leadership styles towards the spirit that is needed in the teams he works with
- The biggest challenges that the teams currently face
- Biggest skills shortages today
- How the business attracts and retains talent
March 27, 2017
Beauty
How are social communities now driving brands?
The growth of e-commerce and digital is only set to grow in the future. In our recent podcast, we spoke with Stijn Demeersseman, L'Oréal's General Manager Commercial Operations CPD for the UK&I, and he was clear on the impact that digital is having on the business. He says that digital has "enabled us to be much closer to our consumers and many of our innovations today, many of our brands today, have become pure digital brands."
Stijn Demeersseman went on to explain that 20% of L’Oréal’s business will be conducted through e-commerce by 2020. But it is through the greater connection that can be formed with consumers through digital that shows the true power of social communities. In fact, it shows that social communities are no longer merely just important or influential, they really are now driving the brands.
Stijn Demersseman also spoke of the important role that bloggers and vloggers play when L’Oréal launches a new product, brand or innovation, explaining how the input and insight that they give essentially means that brands are not simply being created in laboratories any more. In fact, talking about the brand, NYX, Stijn says, "It’s actually the social community who is driving the brand and who’s making sure the brand stays top of mind, and who does, probably, all the media for us."
As e-commerce and digital grows, these social communities will only become even more relevant and important. Therefore, it is vital that companies not only appreciate this, but also that they create strategies around social communities.
Of course, trying to appeal to a mass market in order to drive brand engagement is nothing new. Some of the savviest of brands have been leveraging influential bloggers for a while now to communicate their brand messages. The utility and potential reach of blogging and vlogging platforms have clear potential. UK YouTuber vlogger, Zoella, can boast over 12 million subscribers to her YouTube channel and her videos have received an astonishing 941 million views. Brands that can cultivate relationships with the most influential figures in social communities can obviously do much to support their marketing campaigns.
Even when businesses and brands are operating on a much smaller scale, it is clear that the potential of social communities means that the conventional media model of top-down mass communication has shifted. In its place, Stijn Demeersseman believes that the relationship has "become a more individual one on one conversation with our consumer."
An engaged and vibrant social community is a fantastic asset for any company. Communities will drive reach but they also have the power to add real value at other stages of a user's journey, such as in building and strengthening existing customer relationships and in increasing conversion rates.
Social communities with thriving interactions and engaging user-generated content frequently shared can do much to boost brand awareness, advocacy and loyalty. The greater the quality and quantity of the content is, the more SEO will be improved and it should result in increased traffic too.
Social communities can do so much, from improving brand engagement to ensuring that a brand remains current, relevant and authentic in the eyes of the public. But it will be the companies that introduce creative and innovative approaches to social communities, and those that encourage these communities to 'take hold of the wheel' that will really see their brand being driven forward.
Please ask any questions or post any comments below!
March 21, 2017
Leadership
Embracing differences leads to effective leadership
There can be no denying the value that an organisation gains from having a diverse workforce. A range of backgrounds, cultures and experiences bring valuable human capital to a company. If the workforce embraces and shares the organisation's ethos and vision, diversity in the workplace can create a highly successful workforce.
But what about the importance of leaders? Every company needs them, but what is it that makes an effective leader? Different styles of leadership will bring about different results and certain styles of leadership will be more suited to particular situations.
Since 2015, Stijn Demeersseman has been General Manager Commercial Operations CPD for the UK&I at L’Oreal. The team of 150 that he leads has achieved the highest market share growth and turnover for 15 years. With a record like that to his name, his opinions on leadership certainly have credence.
With leadership, it's very much a case of 'different strokes for different folks.’ People will always have different opinions and give different definitions of what leadership means, but the one that resonates the most for Stijn is: "People will forget what you said, people will forget what you did, but people will never forget how you made them feel.”
Stijn also advocates that leaders should have strong connections with staff and teams. He says. "... I have a great bond with previous team members, previous colleagues and it shows to me that when you are able to build something beyond the day to day, beyond the business, beyond the numbers, it actually gives you a much bigger reward than purely your business results."
Stijn also sees challenge as a crucial factor and believes that leaders need to be very challenging and demanding of the teams they lead - as well as themselves. He talks of the need to create a culture of "mutual trust, intellectual challenge and passion." If this is achieved, he believes, that teams will achieve high performance, not least because there is a very rewarding culture evident.
Stijn Demeersseman has always done his best to bring people from different backgrounds into his teams - which he likes to call task forces or tribes. He wants to build a "collaborative spirit and to make people feel that they are part of something bigger than purely their own job and their own day to day business results.”
In fact, embracing differences is a major part of his outlook. Seeing the world and being in touch with what is going on with life outside the office is very important to him. Staying connected - with previous employers, but also people from other industries - means that you come into contact with professionals who have completely different skills sets and a different range of experiences. In his opinion, this constantly challenging of oneself is an excellent approach for leaders to take.
As Stijn puts it, "Yes, your own job is very important, and yes, you need to be successful in your own job to be able to progress, but you’re only going be so successful if you keep in touch with people out there."
You can also listen to Stijn Demeersseman's full Podcast with LS International here.
Please write any questions or comments that you may have!
March 7, 2017
Leadership
Stijn Demeersseman
General Manager Commercial Operations CPD UK&I at L'oreal
Different backgrounds, functions, interest and cultures are important to build a successful workforce. But, what does it take to be a successful leader? Lauren Steibing of LS International speaks with Stijn Demeersseman, General Manager Commercial Operations CPD for the UK&I at L’Oreal to find out how lead a team to achieve the highest turnover and market share growth in 15 years.
The one definition that Stijn mentioned resonates most with him is “People will forget what you said, people will forget what you did, but people will never forget how you made them feel” – and we have to agree.
Listen to the full Podcast to hear Stijn’s opinions on:
- Leadership and Diversity
- Innovation
- Facing and overcoming business challenges
February 23, 2017
Retail
A personal face is still as important as automation for shoppers
From online supermarket shopping to click and collect services and self-checkouts, the shopping process has become increasingly automated in recent years. Now Amazon - already the world's largest internet retailer - is shaking up the shopping world once again.
Its new concept, Amazon Go, looks set to push automation to new levels in the shopping experience. Essentially, Amazon Go will provide the world's first checkout-free grocery stores.
Customers can walk out of the shop without queuing or having to pay at a checkout. Instead, they use the Amazon Go app to enter the store, choose items that are recorded by sensors and these are charged automatically to the customer's Amazon Prime account.
This checkout-free shopping experience utilizes similar technology seen in self-driving cars and computer vision. It is the most advanced shopping technology ever seen. What Amazon is calling 'Just Walk out Technology' will automatically detect when a customer has taken an item, or returned it to a shelf, and keep track of what is in the shopper's virtual cart.
The first Amazon Go store opened its doors in December 2016. It is situated near Amazon's headquarters in Seattle and is open to employees only initially. It is set to be opened to the general public this year. Of course, it won't stop there. Amazon denied reports that it intends to open more than 2,000 Amazon Go stores in the US and claims that it is just testing the market. However, on the day that the first physical store opened in Seattle, the company registered a UK trademark for the Amazon Go format. It seems pretty clear that we are going to be seeing more of Amazon Go.
The potential impact of this new advance in technology could, of course, be massive. US analysts suggest that Amazon's Go technology could wipe out 75% of American grocery store jobs. Even before the launch of Amazon Go, the British Retail Consortium predicted that almost a third of all the UK's shop jobs would be lost by 2025 as a result of automation. The wider impact of robots on the employment landscape has been much discussed, with some predicting that robots will ultimately replace as many as 15 million UK jobs.
Further automation is inevitable. A large proportion of the shopping process will become automated in the years ahead but is still going to remain crucial for retailers to maintain a personal face. Good old-fashioned human judgement is still required, alongside data and algorithms.
It was a key message from The Big Debate 2016, one of the largest events in the food industry calendar, held last autumn. Of course, speed and convenience are increasingly important for shoppers. As Google's UK Sales Director, Martijn Bertisen said, "WWW now means - what they want, when they want, where they want it."
However, although shoppers demand efficiency in their shopping experience, personalized services and a personal touch is still important. With brand relationships with consumers weakened, promoting the brand's personal face will be crucial in the future. Automation brings many exciting possibilities, but it should not completely take over the whole shopping process.
How are social communities now driving brands?Please write any questions or comments that you may have!
February 20, 2017
Fashion
Pol Codina
Commercial Director Converse Iberia at Nike
Pol Codina started his career in marketing at PepsiCo working on iconic brands like Doritos, Fritos and Lays. After four and a half years in marketing Pol made the move to sales where he worked his way up to National Accounts Director. Along the way he was awarded BEST 2011 Lidl negotiation and commercial agreement across Europe and BEST 2011 supplier among all Eroski's FMCG suppliers according to the Advantage Group.
In January of 2016, Pol made the move to Nike where he's leading Converse's channel strategy and heading up a team of 25.
You will hear about Pol's key opinions on:
- Accountability and how no one is more accountable than you for your career.
- What he didn't know about the fashion industry before joining Nike.
- How important online vs. brick and mortar stores are for Nike.
January 29, 2017
General Management
Javier Hernandez
GM for Duracell UK & Ireland
Javier Hernandez has 18 years of FMCG experience within P&G and Duracell. He started his career with P&G in Mexico within the market research function and soon after, he began his international career in Belgium to become the manager for Consumer & Market Knowledge for Home Care in Western Europe. He then was promoted into a Group Manager position in Geneva and in 2005, he moved into Brand Management on Dish Care for Western Europe. He worked his way up in marketing and in 2013 he became the Associate Marketing Director for Duracell for Western Europe and Global Rechargeable products where they delivered the best year since P&G acquired the brand. They achieved growth across all measures including a 4% increase in sales, 6% increase in share and over 50% increase in Profit. In 2015 he was asked to lead the Duracell integration into Berkshire Hathaway for the UK & Irish business and in 2016 he was appointed the General Manager for Duracell UK & Ireland as a Berkshire Hathaway company.
:06 Introduction
1:25 The most important job selection factors.
2:43 Why you shouldn’t be guided by a title.
3:45 Javier’s key learning throughout his career.
5:05 Currency exchange and how to deal with the market uncertainly of today.
6:21 Duracell’s vision on e-commerce.
7:49 Duracell's key challenges at the moment.
9:18 Why he took the risk to leave P&G and go to Duracell.
10:30 What is the culture behind the $2 billion start up?
We would love your feedback! Please write any questions or comments below.
November 21, 2016
Leadership
John Charles
Vice President of International Sales Walmart at PepsiCo
On this episode of the Career Success Podcast will be joined by John Charles. John has over 20 years of business development and sales leadership experience with PepsiCo building iconic Global Brands such as Pepsi, Gatorade, Tropicana, Frito Lay, and Quaker.
In the retail sales channel, prior to PepsiCo, John worked in the spirits industry for Jim Beam International and Agribusiness for Continental Grain. All told, John Charles has worked in over 40 different markets across Latin America, Europe, Middle East/Africa and Asia.
He is currently based in the USA and serves as the Vice President of International Sales for Walmart International, overseeing PepsiCo sales across Mexico, UK, Canada, Brazil, and China among other markets.
:06 Introduction
1:18 John’s tips on developing great leadership skills.
3:45 Crafting a common vision about what you want to achieve.
5:08 John’s biggest failure and how he learned the importance of cash flow.
6:38 Why it is important to make digital a part of your everyday job.
7:37 International experiences and how they help you grow as a leader.
8:07 Technical vs. People skills - Getting to the right balance.
9:08 Biggest changes in the industry – E-commerce, consolidation, and volatility of international markets.
10:15 How these changes will influence the consumer goods industry in the next 3-5 years.
Please write any questions or comments you have below!
October 20, 2016
Articles
What You Need to Know About Landing Your Dream Job
This article was written as a guest blog for Anna Lundberg and I thought it may be interesting for individuals in our network as well.
The space between vying for an interview and landing the job of your dreams is quite a long journey. There are many steps in the interview process and it is important to show your best self at every stage. I will be sharing with you some of the areas that I believe are key to focus on, if you want to successfully go from Applicant to Employee. As an executive search consultant, I’m going to focus on the process of working with a consultant, but most of the tips will apply equally if you are in direct contact with HR or a hiring manager.
1. Resume/CV
This is your first chance to show why your skills and expertise match so perfectly with the job. I have seen thousands of resumes in my career and I have also shared hundreds with hiring managers. I believe that the most important point to include, that is commonly forgotten, is your achievements in each position. Of course hiring managers are interested in the responsibilities of each role, but they also want to know what you achieved and what makes you better than the 200+ other candidates that have applied for their job.
It is also important to highlight the title of the role, time spent in role (month and year), location and geographical scope, direct and in-direct reports and any budgets or P&L that you have managed. Take a look at this resume template to use as a guide when creating your own.
2. Interviewing
- Attitude is critical to your success in an interview. You should come across as passionate for your work, brands, products, and life. Passion is needed to get the most out of yourself and your team, and the interviewer wants to see that. You should focus on promoting yourself, but not in an arrogant manner. In my opinion, this is done by giving answers in 3’s: context, action, result. Responding this way will help to highlight the results you achieved, but with a context around it so that it doesn’t sound like you are simply bragging.
- You should always be prepared to answer the question, “Tell me about yourself.” Use this as a platform to talk about your most recent accomplishments. You should also have a look online at typical interview questions so that you aren’t caught off guard with a question you don’t know how to answer.
- Phone Interviews
- Skype Interviews
- Convey that you are comfortable. Showing comfort on camera comes across well and employers will assume you would do the same on the job.
- Dress as you would to go to a face to face interview. Because the interview is via skype, you may think that the bottom half isn’t very important, but you never know when you may have to stand up during the interview. And, again, the Skype interview should be taken just as seriously as an in-person interview: Would you go to an interview in pajama shorts?
- Make sure there is enough lighting so the interviewer can clearly see you.
- Take steps to eliminate noise. Everyone lives in a hectic world, but it is important to remember that this is serious and dog barking, kids in the background, heavy traffic could shift the interviewer’s attention off of you and on to something else.
- Face to Face Interviews
- Thank You Note
October 10, 2016
Business
Andreas Welsch
Head of International for KIND Snacks
Our guest on this episode of the Career Success Podcast is Andreas Welsch, Head of International for KIND Snacks. Andreas was born in Berlin, Germany and has 28 years of consumer goods experience, where he had the chance to work with some of the leading names and iconic brands in the industry like Procter & Gamble, Reckitt Benckiser, Henkel Adhesives and Innocent Smoothies. Andreas calls himself a growth manager, because again and again he has been attracted to roles where a business needed to either be established, internationally expanded or turned around. Forming experiences include starting a sales force in East Germany less than one year after the wall opened, establishing a company in non-democratic Romania and living in Bucharest for 5 years. Andreas has held local, regional and global roles and worked on all continents except Africa.
:08 Introduction
1:03 Leadership – one size doesn’t fit all.
2:20 Innovation and private label’s effects on price in the market.
4:33 The concept of brand management and how it will change.
6:20 How bad bosses effect companies and what you can do about it.
8:38 Kind Snacks’ company culture and what their products offer.
We would love your feedback! Please write any questions or comments in the comments section below.
September 26, 2016
Digital
Anna Lundberg
Personal Coach & Business Consultant
On this episode of the Career Success Podcast we will be joined by Anna Lundberg.
Anna is a business consultant and career coach. After a successful marketing career at multinational Procter and Gamble, she has since worked independently as a consultant with clients including Burberry, Vertu, and increasingly also small businesses and startups. Today, she mentors entrepreneurs and young managers while she juggles her own three businesses.
Anna’s first business was her digital marketing consultancy, Crocus Communications, and she is passionate about teaching people how to engage with consumers using digital media without becoming distracted, or intimidated, by the technology behind it. Last year she co-founded Wolf Leaders Academy, which provides management and leadership training for a new generation of managers in the world of business. Having qualified as a certified professional coach, she now empowers people through her personal coaching practice, One Step Outside, to take ownership of their own careers and transition into becoming an entrepreneur, changing career direction, or following their passion whatever that might be.
Anna is a published writer, with articles appearing on Inc. Magazine, Business Insider, and other online publications.
1:25 What triggered her switch from Blue-chip marketer to entrepreneur?
2:44 How can you avoid common career challenges?
4:16 Anna’s biggest career failure and what she learned.
6:25 Growing digital trends and how this is changing business.
7:30 Keeping to the fundamentals of digital before getting to the sexy stuff.
8:50 The key to retaining talent.
10:02 How millennials are changing the work force.
We would love your feedback! Please write any questions or comment below.
September 7, 2016
Business
Juan Amat
VP, GM Nutrition for Western Europe and Sub Saharan Africa for PepsiCo
On this episode we will be joined by Juan Amat. Juan has 17 years’ experience, 12 within the consumer goods industry, and has worked in Madrid, Barcelona, Lisbon, Warsaw, and Geneva. He is currently the VP, GM Nutrition for Western Europe and Sub Saharan Africa, where he leads Fruit, Veg and Cereal categories totaling more than $2bn in Retail Sales Value.
1:38 - The actions he and his team took to deliver double-digit sales growth in beverages across Central Europe.
2:58 – His passion for the vision and giving it all to make it happen.
4:30 – What does it really take to attract top talent to your team?
5:30 – Energy and ambition, speed of thought, and the capacity to listen.
6:31 – How internal career prospects and his network have affected his career success.
8:06 - The fragmentation of demand and its effects on the consumer goods industry.
9:30 – Polarization of top line and bottom line growth and how it effects companies within the consumer goods industry.
10:22 – What new skills will need to be developed as the industry and companies progress?
If you would like to follow Juan on Twitter, click here!
We would love to hear your feedback! Please write any comments or questions below!
August 24, 2016
General Management
Eric de Cozar
Country Director of Switzerland and President of France for Diageo
Eric de Cozar is our guest on this episode of the Career Success Podcast. He has 20 years’ experience in sales and marketing within large blue chip organizations such as Kraft Foods, Ferrero, and Diageo. He has had many successes throughout his career and especially in global business development for Carrefour Group where he achieved an average net sales growth at +7% for 3 years.
1:14 – How being humble has helped to excel even further in his career.
1:57 – Positivity and performance. What effects do effects they have on your N+2?
3:30 – His leadership style summed up in one phrase. “Value fact over bullshit, walk the talk and be loyal!” – Eric de Cozar
5:40 - Corporate Social Responsibility and what that means for the FMCG industry.
6:30 – Price wars and their effect on the industry.
7:54 – Managing talent from “pre-hire to retire” and what has changed?
9:05 – “Attitude over aptitude”
If you would like to follow Eric on twitter, click here!
We would love your feedback! Please write any questions or comment below.
August 9, 2016
General Management
Heidi Greslé
General Manager UK and Ireland for Merck Consumer Health Care
Listen here for our 3rd episode of the Career Success Podcast. Our guest on this episode is Heidi Greslé who has 21 years’ experience in Global Consumer Health Care companies. Heidi is currently the General Manager UK and Ireland for Merck Consumer Health Care. During this episode, she discusses with us a range of topics such as:
1:00 – 3 key qualities you should look for in every career change.
1:51 – The best way to guarantee you will progress to a General Management position one day.
2:54 – What new core competencies will be needed for every company to be successful?
3:50 – Large and small companies and their effect on the healthcare market.
5:30 – What does Merck Consumer Health Care offer to consumers and employees that makes them different?
7:02 – How their purpose and products are changing lives.
8:19 – How to decide which organizations could offer the right career path for you.
July 24, 2016
Africa
Vincent Egbe
GM West and Central Africa
Listen here for our 2nd episode of the Career Success Podcast. Our guest on this episode is Vincent Egbe who has 12 years’ experience in FMCG within the African market. Vincent is currently the General Manager of West and Central Africa for The Kraft Heinz Company. During this episode, he gives us a look into a range of exciting topics concerning the African market such as:
1:22 – How being born in Africa affected his career path and success.
3:05 – How Jay-Z and fast growth swayed him toward working in business development.
4:33 – People management and its influence on career growth. 6:12 – Government policy and its effects on business in Africa. 7:09 – The biggest challenges affecting the African Market today.9:04 – Issues with duties, consumption, and infrastructure in Africa.
10:36 – The skills needed and how to solve some of the main issues in Africa.
13:10 – Issues and effects on the growth of talent today.
We would love your feedback! What questions or comments do you have about this episode?
June 30, 2016
Leadership
Alex Miserandino
Head of Global Go To Market Strategy
LS International has lunched here our new 10-minute Career Success Podcast will keep you up to date with recent industry and leadership trends, and give insight on what skills are needed today to help you achieve your career goals.
Our first guest is Alex Mierandino who is currently Head of Global Go to Market Strategy for Danone but has also been an entrepreneur where he grew his business to 1 million USD turnover in 9 months.
0:30 – Introduction on Alex Miserandino0:55 - What key career decisions helped him become the Head of Go-to-Market within Danone?
2:50 – BEST advice to young talent about their career decisions.3:30 – Challenges between the X and Y generations as ways of working evolve.
4:40 - Some major skills required today that were not as important 15 years ago.5:09 – How should companies develop the new breed of younger, more digital savvy talent?
6:40 – How social responsibility is helping to retain talent today.
8:04 – What is Danone’s Manifesto and how does it help to engage talent?
We would love your feedback! For comments and questions, please write them in the comments section below.
June 30, 2016
Human Resources
Why aren’t you retaining your top talent?
I speak to great people every day who although they may be well paid, still want to leave their job. So what are the motivating factors behind wanting to move on from their current company?
1. Promotion.This is the number one reason people want to leave their current company and take the risk, so that they can keep learning and keep growing in their career. If there is one thing excellent people hate it is being bored. When they become bored, they start thinking about their career goals and how long it will take them to get there and it is only a matter of time until they realize that things are moving too slowly in their organization and they must do something about it. This usually comes down to the expectations set by their managers and it is very important to manage these expectations about time in role very carefully.
2. Looking for a change in company/category/brands/market.A great employee is great because of their ambition to always be learning, and the best people want to have as many different experiences as possible. They want to work on internal and external facing role, within sales, marketing, Digital, in both developing developed markets, etc... This allows for them to have a full array of career experiences to get to their final goal, which in most cases, is running all parts of a business. Some of the top companies manage their employee’s careers like this already, but others do not and it’s something important to always be thinking about, especially if people in your team has expressed their wants for diversifying their experiences.
3. More inspiriting company culture.It is hard to have a company culture where diversity can still be at the forefront and everyone will work well within the company’s culture. This is where some companies go wrong and everyone in the company is the same. There are a number of companies that have achieved it and this will help to retain your top talent in the company. Each company has to have its balance between being organized, but not being too slow and process based. Also, reacting fast to the market changes, but not being so chaotic that the strategy changes every day and projects are never seen out. Of course not everyone will work well in every culture, but it is important to have a culture with values that you stick by.
Obviously depending on your level in the company, not all of these things can be done to retain talent in your team, but your influence in these areas will make a big difference.
June 30, 2016
Resources
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Have questions?
Juan Amat
On this episode we will be joined by Juan Amat. Juan has 17 years’ experience, 12 within the consumer goods industry, and has worked in Madrid, Barcelona, Lisbon, Warsaw, and Geneva. He is currently the VP, GM Nutrition for Western Europe and Sub Saharan Africa, where he leads Fruit, Veg and Cereal categories totaling more than $2bn in Retail Sales Value.
1:38 - The actions he and his team took to deliver double-digit sales growth in beverages across Central Europe.
2:58 – His passion for the vision and giving it all to make it happen.
4:30 – What does it really take to attract top talent to your team?
5:30 – Energy and ambition, speed of thought, and the capacity to listen.
6:31 – How internal career prospects and his network have affected his career success.
8:06 - The fragmentation of demand and its effects on the consumer goods industry.
9:30 – Polarization of top line and bottom line growth and how it effects companies within the consumer goods industry.
10:22 – What new skills will need to be developed as the industry and companies progress?
If you would like to follow Juan on Twitter, click here!
We would love to hear your feedback! Please write any comments or questions below!
A New Approach to Consumer Beauty: Leveraging Trade Marketing for Growth
By Nigel Stokes [1] Vice President for Global Sales at Coty, Inc.
After 15 years working in Trade Marketing across the CPG industry – primarily in healthcare and home cleaning – I now find myself faced with a new challenge: the U.S. consumer beauty industry.
Buffeted by quickly-shifting trends and new entrants, large consumer beauty manufacturers have little choice but to be nimbler than many of their CPG peers. Yet the questions that underlie any successful strategy are simply variants of those I have asked myself time and time again.
The beauty industry is changing – but how and why?
We live in an age of disruption, and the consumer beauty industry is no exception. Four dynamics, all of which are accelerating, are changing what beauty consumers want and what beauty manufacturers need to deliver.
Smaller brands have grown substantially faster than their larger
competitors. Source: Nielsen
Importantly, however, these brands avoid tying themselves to a single strategy. When trends change, they change too. This agility enables small brands to appeal to the ever-changing beauty consumer, one no longer defined by traditional demographics like age, race, gender, or income.
If large beauty manufacturers hope to compete in this new environment, they will need to take a page – or several – from these smaller brands’ playbooks. They will need to stop playing catch-up and innovate before the innovators. They will need to foster ownership and innovation amongst their employees. And they will need to do so while building loyalty with consumers who have more choices than ever.
The U.S. retail landscape is shifting – what are the drivers?
Pundits and product managers alike are poor predictors of the future, but there is one thing of which they can be certain: The U.S. retail landscape will continue to change at breakneck speed for the next 5-10 years. Retailers and manufacturers will have no choice but to adapt or risk irrelevance.
For decades, manufacturers could depend upon traditional channels – hypermarkets, drug stores, and supermarkets – to deliver consistent growth. But to paraphrase one recent Nobel laureate, the times are a-changin’. Recent years have witnessed the proliferation of a litany of new players in retail: deep discounters, premium niche banners, membership-based clubs, and e-commerce. All have taken share from the traditional leaders; and the trend is poised to continue.[11]
Traditional retailers are threatened by e-commerce, deep discounters, and specialty players. Source: Nielsen
As German discounter Aldi continues its U.S. expansion and competitor Lidl aggressively enters the market, the deep discount segment is expected to grow two- to three-fold. Meanwhile, beauty giant Ulta continues to open new stores while growing same-store sales at a double-digit clip.[12] Even the biggest retailers have recognized the trend: Look no further than Walmart’s $3.3 Billion purchase of e-commerce challenger Jet.com.[13]
Therefore, if traditional retailers hope to compete, they will need to craft and sell a compelling value proposition, one capable of dislodging the ease of shopping from home or the economics of buying in bulk. An example of a firm that has successfully done this is Sephora. The rapidly-growing retailer has managed to create a shopping experience superior to drug or big box stores, but also managed to keep prices on its private label brands only slightly above what consumers would pay elsewhere.[14]
Underlying these shifts are changing consumer attitudes and shopper behaviors. American beauty consumers are defining value in new ways, emphasizing opposite ends of the price spectrum. Some, expecting low prices, embrace private labels and are happier than ever to buy in bulk. Others, meanwhile, prioritize fresh, healthy alternatives and a premium shopping experience over the traditional household names. And the common thread across all consumers? An ease with buying their beauty products online.
Large beauty manufacturers will be affected – in what ways?
The challenge, then, is clear. But the myriad of options on the table for confronting it has prevented large beauty companies from effectively taking action. Too often, a clear strategy is lost in the jumble of short-term fixes and uncertainty as to the best path forward. As such, large beauty manufacturers must elevate two priorities above the rest:
Why is luxury doing so well?
Our guest on this episode of the career success podcast is Davide Lunghi. Davide has been working within the luxury industry since 2002 for brands like Fendi, TAG Heuer, Hublot and Zenith.
Key topics include:
LS International Global Compensation Survey
Check out the 2018 compensation survey from executives across the consumer goods industry.Categories
Have questions?
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Business
Juan Amat
VP, GM Nutrition for Western Europe and Sub Saharan Africa for PepsiCo
On this episode we will be joined by Juan Amat. Juan has 17 years’ experience, 12 within the consumer goods industry, and has worked in Madrid, Barcelona, Lisbon, Warsaw, and Geneva. He is currently the VP, GM Nutrition for Western Europe and Sub Saharan Africa, where he leads Fruit, Veg and Cereal categories totaling more than $2bn in Retail Sales Value.
1:38 - The actions he and his team took to deliver double-digit sales growth in beverages across Central Europe.
2:58 – His passion for the vision and giving it all to make it happen.
4:30 – What does it really take to attract top talent to your team?
5:30 – Energy and ambition, speed of thought, and the capacity to listen.
6:31 – How internal career prospects and his network have affected his career success.
8:06 - The fragmentation of demand and its effects on the consumer goods industry.
9:30 – Polarization of top line and bottom line growth and how it effects companies within the consumer goods industry.
10:22 – What new skills will need to be developed as the industry and companies progress?
If you would like to follow Juan on Twitter, click here!
We would love to hear your feedback! Please write any comments or questions below!
August 24, 2016
Guest Article
A New Approach to Consumer Beauty: Leveraging Trade Marketing for Growth
By Nigel Stokes [1] Vice President for Global Sales at Coty, Inc.
After 15 years working in Trade Marketing across the CPG industry – primarily in healthcare and home cleaning – I now find myself faced with a new challenge: the U.S. consumer beauty industry.
Buffeted by quickly-shifting trends and new entrants, large consumer beauty manufacturers have little choice but to be nimbler than many of their CPG peers. Yet the questions that underlie any successful strategy are simply variants of those I have asked myself time and time again.
- The beauty industry is changing – how and why?
- The U.S. retail landscape is shifting – what are the drivers?
- Large beauty manufacturers will be affected – in what ways?
- Surviving in this new environment will be challenging – how can Trade Marketing help?
The beauty industry is changing – but how and why?
We live in an age of disruption, and the consumer beauty industry is no exception. Four dynamics, all of which are accelerating, are changing what beauty consumers want and what beauty manufacturers need to deliver.
- Demographics: An ever-more diverse country, paired with a growing emphasis on inclusiveness, has pushed beauty manufacturers to finally create and market products that help every consumer become their best selves. But diversity is only one element. Manufacturers will also need to become keen readers of demographic trends as the population ages and becomes more cosmopolitan.[3]
- Lifestyle Trends: Consumers are demanding different things from the products they buy. For one, more than ever, they demand products that engender health and wellness. Organic, in the minds of many consumers, is now the expectation. Manufacturers will need to keep pace with consumers’ lifestyles, which will increasingly emphasize products designed with health in mind.[4] In tandem with this shift, manufacturers will need to decide if the millennial shopper is more influenced by marketing or what is on trend. Increasingly, consumers care more about products being on trend and having the right value proposition than being attached to traditional marketing strategies, such as celebrity endorsement.[5]
- Digital Disruption – Access to Information: With a single swipe, a consumer shopping the aisle can access limitless information on any product. The days of simply deciding between Brand A and Brand B are long gone, replaced by consumers’ ability to leverage reviews of individual products to decide what is best for them.[6] The proliferation of peer-to-peer information – product reviews on retailers’ websites, blogs, and social media – means that brands need to craft a compelling story for every product. Consumers now play a central role in the dissemination of information about a product, meaning that manufacturers need to communicate that story through an array of channels.
- Digital Disruption – Path to Purchase: The traditional point of contact between beauty manufacturers and their consumers, the cosmetics aisle, may be giving way to a digital experience. Experts project the number of smartphones in the U.S. to reach 310 million by 2019.[7] Though beauty remains in the early adoption phase when it comes to digital – only about 7% of purchases are online – digital purchases could accelerate.[8] Should they do so, beauty manufacturers will have to craft a shopping experience from bits and bytes that is as compelling as the in-store experience they have honed for decades.[9]
Smaller brands have grown substantially faster than their larger
competitors. Source: Nielsen
Importantly, however, these brands avoid tying themselves to a single strategy. When trends change, they change too. This agility enables small brands to appeal to the ever-changing beauty consumer, one no longer defined by traditional demographics like age, race, gender, or income.
If large beauty manufacturers hope to compete in this new environment, they will need to take a page – or several – from these smaller brands’ playbooks. They will need to stop playing catch-up and innovate before the innovators. They will need to foster ownership and innovation amongst their employees. And they will need to do so while building loyalty with consumers who have more choices than ever.
The U.S. retail landscape is shifting – what are the drivers?
Pundits and product managers alike are poor predictors of the future, but there is one thing of which they can be certain: The U.S. retail landscape will continue to change at breakneck speed for the next 5-10 years. Retailers and manufacturers will have no choice but to adapt or risk irrelevance.
For decades, manufacturers could depend upon traditional channels – hypermarkets, drug stores, and supermarkets – to deliver consistent growth. But to paraphrase one recent Nobel laureate, the times are a-changin’. Recent years have witnessed the proliferation of a litany of new players in retail: deep discounters, premium niche banners, membership-based clubs, and e-commerce. All have taken share from the traditional leaders; and the trend is poised to continue.[11]
Traditional retailers are threatened by e-commerce, deep discounters, and specialty players. Source: Nielsen
As German discounter Aldi continues its U.S. expansion and competitor Lidl aggressively enters the market, the deep discount segment is expected to grow two- to three-fold. Meanwhile, beauty giant Ulta continues to open new stores while growing same-store sales at a double-digit clip.[12] Even the biggest retailers have recognized the trend: Look no further than Walmart’s $3.3 Billion purchase of e-commerce challenger Jet.com.[13]
Therefore, if traditional retailers hope to compete, they will need to craft and sell a compelling value proposition, one capable of dislodging the ease of shopping from home or the economics of buying in bulk. An example of a firm that has successfully done this is Sephora. The rapidly-growing retailer has managed to create a shopping experience superior to drug or big box stores, but also managed to keep prices on its private label brands only slightly above what consumers would pay elsewhere.[14]
Underlying these shifts are changing consumer attitudes and shopper behaviors. American beauty consumers are defining value in new ways, emphasizing opposite ends of the price spectrum. Some, expecting low prices, embrace private labels and are happier than ever to buy in bulk. Others, meanwhile, prioritize fresh, healthy alternatives and a premium shopping experience over the traditional household names. And the common thread across all consumers? An ease with buying their beauty products online.
Large beauty manufacturers will be affected – in what ways?
The challenge, then, is clear. But the myriad of options on the table for confronting it has prevented large beauty companies from effectively taking action. Too often, a clear strategy is lost in the jumble of short-term fixes and uncertainty as to the best path forward. As such, large beauty manufacturers must elevate two priorities above the rest:
- They must hold their ground and reignite growth with traditional retail channels without overinvesting. Beauty manufacturers cannot forget that even though new channels drive growth, the bulk of their business still comes from their traditional partners.
- They must strategically shift resources to win in new growth channels, especially digital. Playing catch-up will never work: positioning themselves as the go-to players in these growing channels is the only option. That is, beauty manufacturers must “innovate before the innovators.”
- Define future business potential and risk
- Reallocate resources and build the right commercial capabilities for new growth opportunities
- Play an active role in the M&A market, but never forget to grow purchased brands
- Be prepared for mounting costs demands
- As always, the first step would be to “understand your consumer” – traditionally the role of brand marketers, whose work is ultimately to deliver against unmet consumer needs.
- Next would be channel prioritization – where and how to find the target shoppers (who may or may not be the end consumer). For some CPG companies, this is easy. Coca-Cola, for example, only has to put their product within arm’s reach; it is as simple as being everywhere, all the time. But consumer beauty has no such luxury. Facing a complex and shifting mix of shopper targets and categories, a beauty manufacturer will have to incorporate detailed analytics into its channel prioritization to understand who is shopping where, for what, and for what occasion.
- The third step would be to craft a compelling narrative with which the manufacturer will navigate the complexities of the target shopper, industry trends, and retailer strategies.[21] For example, selling to the 20-35-year old segment would require a narrative that takes into account the current trend for wash-out hair artistry in the hair color category. But it would also require a more logistical mindset – that is, a recognition that for a host of reasons, including store opening hours and locations, the target shopper could be likely purchasing products outside of the traditional grocery and drugstore settings.
- The final stage would be deploying the “4P” mix: product, place, price, and promotion. But in today’s dynamic environment, rehashing well-worn frameworks will not be enough. Savvy Trade Marketers will transform the 4P’s into the 4E’s.[22]
- Experience: Today’s consumers demand products that fit in seamlessly with their lives. This necessitates that Trade Marketer set strategies to bring a proposition to life, giving the shopper a product experience rooted in their needs.
- Everyplace: Shopping now happens in more places than just the beauty aisle – look no further than the proliferation of blogs focused on beauty products for proof. This forces manufacturers to ask how their products – and those products’ marketing and display – relate to the shopper’s environment, even if that environment is the ubiquitous digital realm?
- Exchange: Traditionally, Trade Marketing professionals have thought that shoppers make decisions as the 4Ps would have us believe. But nowadays, they need to expand their thinking to embrace a more holistic vision of the shopping experience. Purchasing a product is really about an exchange of value – it takes shopping beyond the immediate decision of “Brand A or Brand B,” and is instead about linking each product to a clear value proposition. Moreover, shoppers demand a value proposition that resonates not with an unobtainable vision of beauty, but rather with their best selves.
- Evangelism: This rethinking of the first three of the 4Ps brings us to the fourth – rethinking promotion as Evangelism. Only with an experience that inspires can manufacturers hope for consumers to engage with the brand and spread the word to friends and family. In an increasingly digital world, this prerogative will become only more critical.
May 3, 2017
Luxury
Why is luxury doing so well?
Davide Lunghi of TAG Heuer
Our guest on this episode of the career success podcast is Davide Lunghi. Davide has been working within the luxury industry since 2002 for brands like Fendi, TAG Heuer, Hublot and Zenith.
Key topics include:
- Estee Lauder, Richemont, Swatch and Luxottica - What others in the luxury industry should be learning from them
- The impact Generations Y and Z have had on the growth of luxury
- How the industry can keep up with estimates of 4%–5% compound annual rate over the next three years
March 12, 2018