Disrupt or be disrupted: creating value for brand new order
Five characteristics of the brand new order
Brands are now becoming a cloud of interactions that are shaped by consumer comments rather than companies or partner organizations.
It is imperative that consumer products companies address each of the following five disruptive characteristics of the brand new order.
- Uncompromising stakeholders present companies with dilemmas. Business leaders must manage a more diverse, complex stakeholder universe and balance multiple sets of demands.
Satisfying the demands of different stakeholders under conditions of extreme uncertainty is now a major management challenge, and it demands a strong management team, clarity of purpose and consistency in approach. Transparency is no longer an option in terms of reporting and communicating — it is an essential part of business life.
- Consumers take hold of the conversation and demand greater value. Consumer products companies no longer define their brands. When consumers are seeking recommendations or advice on what to buy, they will turn not to the producers of those goods but to third-party advisers, such as their peers, social leaders or experts found on digital channels, such as Facebook or Twitter.
Brands are now becoming a cloud of interactions that are shaped by consumer comments rather than companies or partner organizations. Without control over the conversation, business leaders must determine how to participate and engage with these third parties so that they can build and maintain trust among a fast-changing and demanding consumer base.
- The new age of the consumer demands a revitalized approach to brand management. This renewed focus on brands requires consumer products companies to re-learn the capabilities of managing brands and swing the pendulum away from centralization and back towards local execution.
Rather than aggregate brand management at the global headquarters, companies need to give profit and loss (P&L) accountability for brands to local managers so that they can make marketing decisions based on their knowledge and understanding of the local market. This will require a major shift in power and accountability but local execution will be critical to create differentiation in a highly competitive market.
- Unprecedented complexity demands greater flexibility of supply. Companies need to embrace good complexity that creates value, and reject the bad complexity that creates unnecessary cost.
Diverse consumers want choice and companies need to find a way of delivering it using techniques that create uniformity where possible, but enable customization where it is needed. Stripping out non-performing SKUs and figuring out how to offer choice without creating unmanageable complexity have become key capabilities for leading consumer product companies.
- The fast-changing environment requires a new style of leadership. Business leaders must embed a more facilitating, enabling style of management with clear accountability for outcomes. It will also require a new generation of entrepreneurial local managers who are comfortable with making decisions independently of headquarters.
These managers must adopt the skills of the “herd”. This means that they must be aware of a common purpose, have the ability to sense both risk and opportunity — and respond accordingly. This new generation of managers will know instinctively how to do what is right for the organization within the context of the local environment.