Leadership Matters

Perspectives on the key issues impacting senior leaders and their organizations
September 20, 2018

Redesigning Paper and Packaging Leadership in a Changing, Digital World

The paper and packaging industry is seeing a significant transformation. With the graphic-paper (newsprint, printing and writing paper) market on the decline, innovative paper and packaging companies are making up the difference with products that answer the growing global demand for industrial and consumer packaging, tissue paper and pulp for hygiene products. Meanwhile, as market conditions and consumer tastes continue to shift, these enterprises are aggressively exploring new applications and uses for paper that will enable them to provide more shapes and sizes, use new materials, print more colors in greater definition and deliver short-run lengths efficiently and cost-effectively.

Slowly but surely, the paper and packaging industry is growing amidst this disruption — especially among companies with leaders who have the skills and capabilities to harness the connective power of digital technologies, manage the growing geopolitical and trade uncertainty around the world, respond with agility to shifting market conditions and competitive dynamics, and navigate the constant change that now defines the industry ecosystem.

As our conversations with industry-leading organizations across the world confirm, the implications for its leaders are many:

  • The industry requires agile leaders who are able to lead and navigate through constant change, and drive innovation in products, processes, organizational setup and business models.
  • Leaders who can identify opportunities to develop a differentiated and distinct consumer value proposition are highly coveted.
  • Developing flexible production/supply chains and balancing them with cost (i.e., hiring strategic supply chain leaders) will be key to future growth.
  • Strategic leaders who are able to evaluate strategic options, weigh their trade-offs and take measured risks are in high demand.
  • An understanding of changing consumer and stakeholder preferences is critical. Although lowering costs remains a top business priority within the industry, an increasing number of paper and packaging companies are equally focused on avoiding production overcapacity as the worldwide call for sustainability, resource conservancy and “going green” grows louder.
  • A formula for success will continue to be leveraging digital technology, the influence of which is evident in the growth of e-commerce packaging and the use of sensors and other connected technologies to streamline  and in many cases, customize — production and services.
  • Strategic partnerships with technology providers who understand how to synthesize emerging technologies to address core business processes as well as with new industry partners are becoming key ways for organizations to thrive in this highly competitive, digital environment.
  • Another key consideration is organizational cultural fit. Depending on the strategy, organizations may need leaders who align with the existing culture or those who can serve as a change agent to set a new direction.

Paper and packaging companies are increasingly finding that bringing leaders from outside the industry is helpful. Developing the leadership traits needed for business growth can be challenging, and companies sometimes find it’s easier (and faster) to teach proven leaders about the industry, rather than helping industry experts develop change management expertise. In addition, executives from outside paper and packaging can bring a new perspective to an industry that can be perceived as mature. We continue to see a preference for building teams that enhance a company’s existing leadership and market strengths with new skills and industry expertise.

Recruiting for senior-level roles outside of the industry is by no means a fool-proof formula. There are risks. The industry has always been complicated and is even more so lately. This may represent too steep of a learning curve for some outsiders, especially those in purely operational roles.

Organizations can minimize the risk when considering whether to promote from within or hire from outside the sector by carefully defining the technical knowledge and leadership skills that are required and consistently assessing candidates against those capabilities.

Looking ahead, a range of leadership skills — from the ability to build unconventional partnerships to a customer-first orientation — is going to become increasingly important. But ultimately, leaders must be able to thrive in environments of change and ambiguity if they are going to succeed in the industry’s next chapter.