At Catalant, we’ve worked with hundreds of organizations to drive mission-critical initiatives more quickly. These organizations use our software platform to align initiatives to strategy, break down the work required into specific projects with measurable outcomes, and match the people and capabilities to the right projects at the right time. And while the specific projects that comprise those business agility initiatives vary widely, our analysis shows that nearly every project rolls up into a major corporate initiative in one of three areas:
- Accelerating growth via customer centricity
- Driving innovation to discover new sources of value
- Driving cost optimization programs to increase efficiency
Accelerating Growth via Customer Centricity
Growth is an important objective of most organizations, but the ways companies grow have changed tremendously in the digital age. Scale is no longer the advantage it once was, so simply buying up adjacent markets or rivals isn’t enough to sustain growth. Growth is also a double-edged sword that must be managed carefully to ensure that it is sustainable — that costs don’t spiral out of control and that market conditions are right for ongoing success.
One of the most powerful drivers of transformation initiatives is customer centricity. Large organizations are looking to power growth by placing the customer at the core of everything they do, aligning functions and strategies around the customer experience rather than traditional hierarchies. This is a difficult exercise, as large organizations, in particular, have challenges in four areas:
- Breaking down silos that hamper customer centricity
- Lack of visibility into the customer journey or experience
- Difficulty prioritizing projects to align with customer centricity objectives
- Challenge accessing the right people and capabilities across multiple functions, brands, and geographies
Customer centricity initiatives are a perfect illustration of the value of business agility. Aligning and prioritizing the right work, challenging silos and hierarchies, and fast access to people and capabilities are the hallmarks of an agile business.
Unilever Powers Growth with Agility
Getting to business agility is a long process, but many major organizations have begun to evolve into agility by focusing on strategic priorities and outcomes. At Unilever, exploring new growth opportunities meant getting much more agile, focusing on rapid development of new products and partners, removing bureaucratic constraints, and putting the customer at the core of its growth strategy.
The future workforce is going to be totally different than what it is today.”
— Raquel Suarez, Global HR Innovation & Leadership Development Leader at Unilever
To power this new growth strategy, Unilever needed to think differently about how it prioritized, organized, and deployed resources to its most important initiatives. One key was thinking in terms of outcomes and initiatives, rather than the restrictions imposed by internal capacity and silos. At a recent conference, Unilever HR leader Raquel Suarez described how its “Be Resourceful” initiative has already accelerated the speed at which the organization can tackle new challenges.
“We’re literally moving from thinking in terms of constraints to thinking in terms of the abundance of resources, possibilities, and use cases, and showing that to the world,” says Raquel Suarez, Global HR Innovation and Leadership Development Leader.
So far, the results of this new way of thinking include:
- An initiative in Pakistan to develop a new product to guarantee ice cream delivery in 10 minutes or less. The initiative included a hackathon with over 350 ideas, plus a partnership with a logistics company that developed a dedicated AI platform for the product. The result was an additional 1% growth in the 1 billion Euro market.
- An effort to launch five new beauty products in Indonesia with limited marketing support. By filling the gap with temporary marketing talent accessed through the Catalant platform, the division was able to successfully launch all five new products in 9 months or fewer.
- An initiative in China to market a shampoo brand to millennials. With few millennial workers on the team, Unilever created a crowdsourcing campaign that helped create a successful new campaign in only two months.
“We’ve moved from planning to experimentation, from privacy to transparency as well. So this is a whole ecosystem of change that we’re doing in Unilever,” says Suarez.
Driving Innovation to Discover New Sources of Value
Innovation has been a buzzword for so long that it’s lost much of its original meaning. Some organizations unhelpfully brag about innovations that seem, to the critical eye, more like minor incremental improvements on existing products or processes. Do we really need another iPhone app for splitting the check at a restaurant? Do we need yet another streaming platform?
For large organizations, in particular, the challenge of innovation is acute. Despite the advantage of resources and talent, large organizations often find it difficult to outflank disruptors for several reasons. Large organizations have more red tape and regulations to worry about and they have already-successful products and services to protect. Many have also long-since lost the culture of innovation that propelled them to success in the first place. They tend to punish, not reward, experimentation and failure.
They also need to rethink the way they use the resources available to them. How will they allocate budgets to encourage appropriate risk taking? How will they more dynamically identify and move people and capabilities onto the most important projects at the organization?
Case Study: Shell’s Innovation Story
Royal Dutch Shell CEO Ben van Beurden made news in 2018 when he speculated that demand for oil might peak as early as 2025 thanks to government regulation and consumer preferences for reducing reliance on fossil fuels. It seemed to be a turning point for the world’s largest energy company, which van Beurden says will focus its considerable resources on building an adaptable organization that can thrive in a time of great uncertainty.
“Our strategy is founded on our outlook for the energy sector and the chance to grasp the opportunities arising from the substantial changes in the world around us. The rising standard of living of a growing global population is likely to continue to drive demand for energy, including oil and gas, for years to come. At the same time, technology changes and the need to tackle climate change means there is a transition under way to a lower-carbon energy system with increasing customer choice. We recognise that the pace and path forward are uncertain and require agile decision-making.” – Excerpt from Shell’s 2018 Annual Report
Getting to that business agility won’t be easy for an organization as large and process-oriented as Shell. At a recent event hosted by Catalant, Shell’s Caroline Missen said the organization started to take a look at these factors as it updated its strategy two years ago.
“We realized we needed to do a lot more commercial innovation, and started to look at what that meant. And we realized that meant a lot of experimentation, digital innovation, incubating ideas. We recognized pretty quickly we were not set up with the resources and talent to actually drive that,” says Missen, Business Advisor to the Downstream Director at Shell.
To address the challenge, Missen and her colleagues set out to test new ways of driving innovation. One of the first projects they launched was a reverse mentoring initiative, in which the team identified 50 people within Shell who were qualified to help senior leaders understand different aspects of digital innovation (eventually 8 of the 50 were selected to participate). Missen says the initiative showed them how limited job titles are when searching for specific capabilities for a defined project.
“What was interesting was that these people came from all parts of the organization, and very few of them were working in what we’d call digital roles. Most of them were pretty junior in the organization and they were hidden,” says Missen.
The success of that project sparked a larger initiative within Shell to think differently about how it could close the gap between strategy and execution by quickly aligning new projects to strategies, accessing and allocating the right people and capabilities to those projects, and tying the results of those projects to business value.
The real power (of the Opportunity Hub) is tapping into really diverse people across the organization.”
— Caroline Missen, Business Advisor to Downstream Director at Shell
Using Catalant as a platform for tracking and organizing projects as well as the skills and interests of its employees, the Downstream Commercial business started by encouraging people to use their discretionary time (about 20% of their total work time) to work on projects throughout the organization. The “Opportunity Hub,” as Shell calls it, has already started to pay dividends. In one case, Missen says, an employee in Houston was able to produce real results on an eight week supply chain sustainability project after locating an employee with the right skill set working in a manufacturing plant near Cairo, Egypt.
Not only does the Opportunity Hub connect internal resources for mission-critical projects, but Missen says staffing projects based on capabilities may remove some bias from the process, as project owners won’t automatically defer to their existing network of colleagues to tackle the work.
“The real power of the Opportunity Hub is tapping into really diverse people across the organization,” says Missen.
Cost Optimization and Improved Efficiency
Every business strives to be as efficient as possible, eliminating wasted money or resources in the service of maximizing profitability. At established organizations, the desire for efficiency often results in cost-cutting exercises. Too often these exercises are either temporary — cuts are made but spending ramps back up in the same areas over the next few years — or counter-productive.
Consider Kraft Heinz, the venerable foods company formed when Braziilian investment group 3G Capital teamed up with Berkshire Hathaway in a $49 billion deal in 2015. The company’s strategy was to cut costs by reducing R&D spend, cutting staff, and reducing spend on in-store promotions. The results have not been good. In 2018 the company wrote down iconic brands Kraft and Oscar Mayer by $15 billion, and Kraft Heinz shares lost 53% of their value in the year ending in June 2019. That same month the company announced it was replacing CEO Bernardo Hees, a partner at 3G Capital, with Miguel Patricio, formerly chief marketing officer at Anheuser-Busch InBev.
The reasons organizations struggle with cost optimization are straightforward and yet difficult to overcome: They cut too much in the wrong places and not enough in the right places. Larger organizations, in particular, struggle to:
- Understand which resources have real impact on the company’s strategic priorities
- Get their mission critical work done more quickly and efficiently
- Operate efficiently as one unit rather than siloed functions
- Manage vendor spend and assess the value of that spend
Large Technology Organization Manages Costs More Effectively
At one large technology company, the cost of external consultants was hampering both efficiency and the company’s ability to innovate in strategic areas. On a mission to get more efficient, the heads of three shared services departments teamed up to streamline the process of aligning key priorities and accessing the right people for the right work.
The Catalant platform provided a central location for prioritizing work and accessing the right people and capabilities — internally and externally — faster. The results were a 20% reduction in contractor spending and a 70% increase in the speed to launch new products.
At Catalant, we’re fortunate to get a view into some of the most important projects at some of the world’s leading enterprises. We’ve found that organizations that thrive are those that find a way to identify the initiatives most likely to help the organization meet its strategic objectives, break down those initiatives into fast-moving projects, access the right people and capabilities — regardless of function, group, or even company they work for, and be transparent about the outcomes of their work.