Staying a small fish?

Philippe Marmara

We have seen in recent months a very passionate and interesting debate about the lack of clear strategies to generate organic growth. Kraft Heinz, for instance, has been identified as the “example” of what not to do. Of course, we have to be very cautious about quick and simple conclusions regarding the strategic behavior of such a big and successful company. My objective here is to share what really prevents companies from growing today.

Lack of innovation: Many companies do not innovate. In fact they believe that they innovate while most of the time they just “stretch” their current line of products or services. Adding another blade to a razor, for example, or another type of beverage to an already existing product portfolio. Innovation is about exploring new frontiers, new possibilities, it is about new technologies, really breakthrough products or services. It is about exploring new route-to-market systems, understanding the potential impact of pricing strategies. It requires visionary leaders and specific talents. Great companies embrace change; they are agile.

Misunderstanding of the new consumer: With the rise of the new generations of consumers, millennials and post millennials, the marketing game has completely changed (most of the time the lack of growth that we see lies in these very specific segments of the population). New generations are challenging the mainstream model; they are redefining their consumption habits and in the meantime are defying brands and companies. They use technology, spend quality time in pre and post purchase activities, and communicate very efficiently. They explore new channels; believe in short circuits and social responsibility. It is amazing to see how many marketers describe this situation reasonably well, but how few companies actually connect well with this generation of consumers.

Inability to manage multi- and omni-channels: This is not only about developing ecommerce. Omni-channel is about managing highly complex route-to-market systems and at the same time, multiple consumer touchpoints and experiences. It is probably the biggest challenge everyone faces today. How do you get the right product or service, at the right place, for the right occasion and at the right price in such a complex environment? Failure to understand this paradigm is probably what caused the dismal performance of retailers like Carrefour or Auchan in China.

Finally, the dependence on short-term financial goals and objectives: We all know that, intrinsically, this is what has greatly affected many companies. Achieving short-term results has been for years the consequence of disinvesting in brands, innovation, and people, and/or acquiring and “zero-basing” new companies. We have seen recently the results of this kind of strategy.

We should, on the other hand, be inspired by the success of some family-owned businesses who follow the exact opposite model. Strong and healthy governance, no short-termism, brand love and respect for people. I was amazed, a few weeks ago, to see exactly this at Victorinox in Switzerland. What a great story and a remarkable model.

So, is there any company driving these 4 elements? As we all know, success lies very often on our capacity to run key actions and programs in parallel, not in sequence. Well, in a recent international survey, out of 1300 companies interviewed, 60% declared that they were implementing only one single growth strategy, 30% multiple strategies, the rest did not really know!

I guess we still have a long way to go.