March 4, 2022
Leadership Implications from CAGNY
By
Spencer Stuart’s Global Consumer Practice
Members of Spencer Stuart’s Global Consumer Practice virtually attended the 2022 Consumer Analyst Group of New York (CAGNY) Conference and have considered the leadership implications of the current state of CPG.
Consumer companies are operating against a backdrop of inflation, supply chain concerns, changing workplaces and other forces. As organizations navigate these dynamics, there is a greater demand for leaders who can adapt, flex and move with speed amidst ambiguity as well as a greater need for stronger learning and inclusive cultures.
The power of adaptable leadership and a learning culture
Unilever, General Mills and Hershey among others learned over the last two years that they can bring products to market much quicker once they freed themselves from the typical stage gate process and began piloting concepts to learn, iterate and optimize. Coca-Cola recently restructured its organization, moving 5,000 employees into new roles to empower more people, encourage greater collaboration across functions, and enable more experimentation at scale. This approach requires leaders who are agile and nimble, as well as collaborative and comfortable testing new ways of working. These types of executives help teams move forward, adapting along the way.
These leaders also nurture a learning culture that is critical to accelerate growth. They are the bridge between context and outcomes. This reinforces what Spencer Stuart believes are the conditions required for a leader to be successful: clarity, alignment, vitality and coherence. By operating this way, executives can optimize performance as well as allow for more immediate impact on an organization. Also, companies with fewer managerial and functional layers provide the space for learning cultures to thrive. They allow more people to get involved and make a difference, which is critical in attracting top talent.
The demand for functional expertise is stretching supply
In the past couple of years, most companies have deployed new digital capabilities and technologies to better serve the consumer journey and optimize operating models. Increased investment in adaptive data platforms, advanced analytical tools and AI/machine learning capabilities were consistently announced by companies like Colgate and Tyson. General Mills is investing in “connected commerce” to embed digital and analytics across functions. Kraft Heinz is using AI to address supply chain challenges. Technology leaders are in high demand to help enterprises collect the best data to arrive at the best insights, actions and outcomes.
Many companies have also seized the opportunity to simplify and refocus their portfolios, which usually resulted in divesting non-core businesses or acquiring distressed assets. For instance, Smucker reshaped its portfolio by selling its natural and organic grains business and has made acquisitions part of its growth strategy. This financially intensive M&A activity has increased demand for CFOs. Leaders with expertise in supply chain, sustainability and human resources are also highly sought after as organizations address current opportunities in the marketplace.
This increased demand for specific functional expertise has made the talent market red hot. Hiring teams must think creatively about talent solutions, move fast in this candidates’ market, and strengthen their inclusive cultures to ensure these leaders can succeed.
Being a force for good attracts and retains top talent
Sustainability has become table stakes as almost every company shared ESG initiatives. Reckitt embeds sustainability into its daily business, focusing on purpose-led brands and a healthier planet. Nestle has established a dedicated team of 100 sustainability-focused employees. Smucker’s Folgers brand has publicly committed to reducing its energy consumption and greenhouse gas emissions. Organizations need to deliver shareholder value but acknowledge a multi-stakeholder model that puts environmental, societal and governance issues as a top performance metric. This focus is also critical to attract and retain talent while building a culture that energizes employees around a common purpose. What has been increasingly important to consumers appears to be a core principle among CPG companies.
Now more than ever, we encourage companies to embrace an integrated, holistic leadership approach that addresses talent, team alignment and effectiveness, culture and organizational structure as a system that will transform businesses. Let’s sit down and talk about how you can maximize the impact of your leaders and culture.