LONDON — Collaboration has become more important to the consumer goods industry than ever before, according to “Pursuit of harmony in turmoil: working together to make a difference,” a new report from the EY Global Consumer practice in conjunction with the Consumer Goods Forum.
Emerging technologies have created uncertainty in job markets despite also providing proportionate solutions. These technologies include tools used to analyze ESG performance, which are becoming more accessible and thus making the impact of climate change and social inequality even more noticeable. While some new skill sets have become essential, others are less relevant, hindering the supply and demand of talent.
Successive crises also are promoting company collaboration. For example, consumers are facing the steepest price hikes in a generation and the highest interest rates in more than a decade, so it makes sense that emerging (and potentially contradictory) changes in consumer behavior would define a new era of geopolitical uncertainty amongst other factors such as conflicts, economic nationalism and increased polarization, the report said. In response to these successive crises, companies may need to take actions that can overwhelm organizational capacity and cause spiraling costs. Therefore, these companies must make tradeoffs to protect capital and capacity. According to the report, many chief executive officers have created priority lists to keep a close eye on specific challenges to guarantee progress can be made without having to “deal with everything.”
“Your purpose should be to put the customer and the consumer at the center, and you build your value proposition from there,” said Daniel Rodríguez, chief executive officer of FEMSA.
Companies laid a strong foundation to address new challenges using transformative methods such as organizational models, product portfolios, and digital and physical footprints, all of which were born of necessity during the COVID-19 pandemic and thus have built up resilience for the companies, the report noted. Even then, talent, culture and operating models are embedded into building resilience. According to the report, workplaces need to be flexible, and leaders need to trust in their abilities to adapt. Therefore, companies should use disruptive technologies as an enabler since they can optimize existing processes and digitize functions that will in turn improve efficiency, automation and agility. After all, predictive tools have made businesses more adaptive to market changes. Most of the 17 CEOs interviewed for the report also highlighted the importance of resilience as a way of sifting through disruption and completing long-term goals rather than using “tactical actions” to fight disruption.
“We have a good strategy in place which we stick to,” said Lionel Souque, CEO of the REWE Group. “External influences such as the economic crisis do not stop us from following our strategic goals.”
According to the report, coalitions “can never be one-sided.” Companies should draw clear lines to protect their competitive edges, but “open and reciprocal sharing within an extended ecosystem brings benefits to all.”
“One company can’t solve the big picture, it takes the collective industry,” said James Quincey, chairman and CEO of the Coca-Cola Co. “Knowing the answer and not sharing it is hardly a competitive advantage.”