Last week I had the privilege of joining an intimate group of cross-functional, cross-industry senior executives from leading enterprises for one of Catalant’s Salon Dinners, hosted by Catalant’s co-founder and co-CEO Rob Biederman.
Under the haven of Chatham House rules in Gramercy Tavern’s private room, attendees participated in vibrant, candid discussions on the opportunities and challenges their organizations face as they adapt to rapidly evolving market conditions, not to mention heightening demands from their boards and shareholders to deepen profit pools.
Despite industry and functional differences, executives in attendance unanimously expressed acknowledgement of the necessity to accelerate various forms of innovation across their organizations. As the evening progressed, the group gravitated toward a few notable themes.
Unsurprisingly, attendees who represented companies centered on consumer brands—like mass media, consumer packaged goods, and life insurance—expressed intense focus and concern over their organizations’ abilities to adapt to ever-shifting customer preferences. Evolving consumer tastes, both figuratively and literally, are compelling companies to develop altogether new value chains.
For example, the vice president of strategy and business development at a mass media company shared reflections on a recently launched experiment to monetize curated user-generated content on a YouTube channel, launched under the brand umbrella of a well-known TV pay channel. If successful, the experiment would mark a potentially dramatic value chain evolution that is driven, in no small part, by evolving customer preferences for both the nature of content and how it’s delivered.
Most guests expressed concern that their organizations weren’t moving fast enough to meet customers’ expectations or, even worse, harbored incorrect assumptions about their customers. To illustrate the latter, the vice president of strategy and transformation – who is also chief of staff – of a multinational cosmetics company discussed how, for years, his company had assumed that Japanese skincare products performed well because of consumer perception that products from Japan were of higher quality than American or European skincare products. Market research proved this assumption to be incorrect.
NYC Salon Dinner at the Gramercy Tavern
Many of the executives in attendance hailed from iconic companies that are recognized leaders of their respective industries. Most also related their own organization’s experience with some version of the innovator’s dilemma—more specifically, that the decision-making and resource-allocation processes that were key to their prior success as established companies with mature product lines actually posed obstacles to their future success in the face of changing markets and technology.
Most guests expressed concern that their organizations weren’t moving fast enough to meet customers’ expectations or, even worse, harbored incorrect assumptions about their customers.”
One particularly poignant example came from the EVP of marketing, research, and analytics of a mass media company known for its iconic magazine brands who bemoaned how difficult it is to accelerate the transformation required to execute against her organization’s revamped strategy. The organization struggled to innovate—and adapt—fast enough to account for the radical changes required of the business.
Another dinner guest—the vice president of strategy at an EU-based alcoholic beverages conglomerate—expressed the need to protect entrepreneurial, recently acquired brands from “the machine” of the broader company’s operations. While extremely effective at producing and marketing mature brands at scale, the company’s processes and resources are not well-tuned for developing and incubating new brands.
Many attendees attested that many types of innovation initiatives require fundamentally different processes, key performance indicators, and organizational resources than the rest of the business. For example, the Chief Growth Officer of a worldwide health services organization noted the need to empower local international growth teams to operate with more autonomy—and to decentralize decision-making to enable teams with specialized knowledge with faster, nimbler ways to work, to accelerate both successes and failures.
But the jury was still out on whether innovation initiatives require altogether separate organizational structures to insulate them from the pressures of the business—or whether they ought to be deeply embedded in primary organizations to rapidly share positive benefits. The vice president of business analysis and planning of a multinational consumer manufacturing conglomerate, for instance, felt strongly that all forms of innovation must be deeply embedded in the business to ensure best practices and know-how cascade to other parts of the organization.
The Right Skills & Expertise
Almost universally, attendees expressed concern over whether they had the right people—and, more granularly, the right skills and expertise across their employees—to accomplish their organizations’ goals. Concern seemed particularly acute among executives at consumer-focused companies, many of whose business models have been upended by digital transformation of products and distribution channels—and, more generally, in situations that called for new disciplines and bodies of work for the organization with speculative benefits to the business.
The CIO of an international hotel and resort chain shared stories from the trenches on the challenges of developing the organization’s first worldwide IT strategy, overhauling its information security function, and increasing productivity and operational capabilities—none of which was possible without strong execution in assembling and developing the right team. As new technologies like cloud-based technology emerged, new skills and expertise were required to execute optimally against their strategies.
For the group present at the dinner in NYC, it was a foregone conclusion that speed and talent are critical to their organizations’ future growth.”
Many attendees spoke of their organizations’ difficulties with attracting, retaining, and maximizing utilization of employees with the right skills, expertise, and mindsets. Some, however, did share novel approaches to address the issue. For example, the senior vice president of finance and strategy of a multinational cosmetics company discussed a reverse Millennial mentorship program, through which a senior executive is paired with a younger employee. The younger employee regularly presents insights into trends in younger consumer preferences to the executive team, while the executive provides mentorship and senior-level exposure to aspects of running the organization.
Although most expressed openness to the notion that they must look outside their organizations for answers to many of the pressing questions they face, many were uncertain of how to approach determining which skills and expertise are core versus non-core to their organizations’ needs. Making this determination, many agreed, is critical for meaningfully shifting from a human capital focus on talent acquisition toward talent access.
For the group present at the dinner in NYC, it was a foregone conclusion that speed and talent are critical to their organizations’ future growth. Actually charting a path to navigate the uncertain waters of the future was much less readily apparent. Despite differences across industries and functions, one fact was abundantly clear: agility is required.