Leadership Matters

Perspectives on the key issues impacting senior leaders and their organizations
July 10, 2017

Equipping Your Retail Leadership to Win Both Locally and Globally

Takeaways from the 2017 Consumer Goods Forum Global Summit

In today’s retail space, things are moving quickly. Technological advancements and changing consumer tastes and education, especially, are changing the landscape for retailers. Digital disruption is driving a large change in retail, with smarter tools making consumers increasingly savvy and social media shifting how and what they learn about a given product. They are also making more of their purchasing decisions spontaneously based on their current mood rather than weighing these decisions more heavily over a longer period of time. Demand is growing for unique, healthy, sustainable and global products; these trends, along with the lowering of barriers to entry, are opening the door for locally created brands. Retailers need to stay ahead of trends or risk falling behind; to thrive in this environment.

Multinational companies have to play — and win — both locally and globally. So, how can global retailers both respond to changing consumer demands and take advantage of their scale in production and distribution?

Finding solutions to this challenge was among the topics tackled during this year’s Consumer Goods Forum Global Summit in Berlin. Leaders from global brands such as L’Oréal, Mars and Google offered perspectives on what’s to come for the consumer goods sector and how companies can succeed in multiple markets.

We at Spencer Stuart are focused on the leadership, cultural and organizational imperatives of competing in the current retail landscape. We think that companies able to win globally and locally will do the following.

Build agile, culturally aware leadership teams

A new leadership profile is emerging for consumer goods companies, one that emphasizes diversity, broad business and functional experience, agile thinking and cultural sensitivity. For innovation to emerge from anywhere around the world, companies need executives across the organization to think more entrepreneurially and in a more networked way than ever before, with the ability to connect the dots and think quickly. To promote innovation within the organization, leaders should keep an open mind at all times, be ahead of the curve and often question their processes. They also need to be culturally agile, with an openness and curiosity to global initiatives, experience with various markets, an adventurous spirit that promotes responsible risk taking, self-awareness and broad cultural knowledge.

Create a culture that encourages idea sharing and breaks down “NIH” mentality

A challenge for many companies trying to find and broadly leverage great local ideas is overcoming the “not invented here” syndrome that keeps people from sharing what they’ve learned or using good ideas from elsewhere in the organization. To combat this, it’s important for leaders to encourage idea-sharing among their team, as well as create a culture that promotes teamwork and results above all. Teams that come together to share best practices or swap local ideas that have worked in the past, are more likely to surface and leverage the best ideas from around the organization.

Establish a structure that streamlines decision-making and brings voices from local markets

Consumer companies that win will move to organizational models that enable them to increase consumer intimacy and the speed of decision-making. One model is to identify trend-leading markets to drive innovation in specific categories and co-locate multi-discipline teams that are focused and empowered to develop winning products and marketing initiatives that can be leveraged in other markets. Another approach is to ensure that global teams better represent local markets, perhaps by bringing more local-market experts into corporate teams.

Increase investment in local-market talent and training

As global companies organize to leverage their scale, they build up capabilities in regional or global hubs. But to improve their ability to compete locally and leverage the best ideas from around the world, companies need to have strong business leadership and functional capabilities at the local level. This means hiring local leaders with the capacity to grow into regional and global roles, and providing ongoing training to local teams so that both markets thrive.