BLOG
Reinvent around mega processes to fuel new growth
10-MINUTE READ
October 2, 2024
Breaking down silos: the path to sustainable reinvention
One of the few things I can say to every consumer goods company, and get consensus on, is: “you are too siloed as an organization.” As we kick off more and more reinvention programs across the industry, we give every partner two ways to execute the transformation: the first one is the easy and cheap but non-sustainable way, and it’s through the existing functions; the second way requires moving from thinking functionally to developing end-to-end value streams or domains that cut across traditional functions. We have given these options to several executives and, so far, each one of them has sought to go end-to-end. So, when we talk about truly going end-to-end, what do we mean?
The promise of artificial intelligence
At the heart of this reinvention are AI, generative AI and emerging technologies that are revolutionizing the world. Until now, many companies have experimented with gen AI and other tech in siloed functions—such as in marketing to generate content, or in R&D to accelerate product development. While these use cases have shown promise, they only scratch the surface of AI’s true potential. The leaders—those we call Reinventors—are thinking bigger. They are reimagining the entire enterprise as a series of interconnected AI-powered "mega processes" that cut across traditional functional silos to drive agility at scale.
Our experience with thousands of transformational client engagements and over 1500 generative AI projects has not only demonstrated successful outcomes but also revealed enormous untapped potential. This hands-on experience is further supported by our research, which shows that 80% of executives believe generative AI drives growth and disruptive innovation. Additionally, our findings indicate that 76% of consumer goods executives plan to fundamentally reinvent two or more business functions in the next three years. These insights highlight the growing recognition of AI's transformative power across the industry.
Introducing mega processes: the new end-to-end consumer goods value chain
We've defined four mega processes that are essential to the reinvention strategy for consumer goods companies, and leading CPGs are already embracing this approach. These mega processes represent a radical shift in how they conceive of and operate their enterprises. The rapid adoption we're witnessing underscores the transformative potential of this new framework, as it reshapes industry practices and organizational structures.
- The first process, "Insight to plan", dynamically translates strategy into action.
- The second, "Ideate to scale", rapidly creates and launches new products and experiences.
- The third, "Engage to advocate" builds lasting consumer relationships across the entire journey.
- The final process, "Plan to deliver", ensures flawless execution and fulfillment.
By radically redesigning processes with the possibilities of AI and generative AI, emerging technology and new ways of working, companies break down silos to operate and collaborate with unprecedented agility, efficiency and consumer-centricity.
The impact of this approach will be game-changing. For instance, we're seeing gen AI-powered reinvention drive 25-50% faster time to market for new products. In consumer engagement, we've observed an increase in conversion rates of up to 25% and a 35% improvement in Net Promoter Score. And for demand and supply matching, AI-driven forecasting and planning is boosting on-shelf availability by 2-5%, offering significant advantage. These results are impressive, but they represent just the beginning of what's possible. As these AI-driven mega processes continue to evolve and mature, we expect to see even more dramatic improvements across all aspects of the consumer goods value chain, setting new benchmarks for industry performance and consumer satisfaction.
Mega processes coming to life
Consumer goods companies have it easier now to adopt and scale these reinvented ways of working thanks to generative AI. This technology’s ability to process and synthesize vast amounts of data, generate human-like text and adapt to various tasks across the value chain accelerates implementation and enhances scalability.
Right now, we’re seeing early success in the “Insight to Plan” mega process with AI-powered “decision cockpits.” These constructs centralize weekly or even daily insights for executives, allowing them to query financial and operational data through natural language chat interfaces. This puts unprecedented decision-making power at leaders' fingertips, enabling more agile and data-driven strategy execution. Looking ahead, we anticipate ongoing identification of next best actions at every level of the organization.
Meanwhile, in the “Engage to advocate” mega process, we’re seeing the emergence of "intelligent sales coaches." These AI-powered tools act as co-pilots for sales reps, providing personalized advice on pitches, suggesting next best actions and automating non-customer-facing tasks. This allows sales teams to shift from order-taking to true strategic partnership with customers, driving growth for both parties.
At the forefront of marketing innovation, "digital marketing assistants" are redefining how brands connect with consumers. These AI-powered tools automate content, optimize ads and personalize consumer experiences at scale. By analyzing data, they can predict trends, tailor messaging and engage with consumers across multiple channels in real-time, improving efficiency, engagement and brand loyalty. As they evolve, they will blur the lines between marketing, sales and customer service, creating a seamless and highly personalized consumer journey. And this is set to extend beyond marketing departments. Soon, CPGs will likely see AI-enabled digital tools supporting every employee across the organization, transforming how they perform their daily tasks and collaborate with one another.
Unlocked value in consumer goods
The four mega processes—Insight to plan, Ideate to scale, Engage to advocate and Plan to deliver—unlock substantial value across consumer goods companies. By leveraging generative AI and other technologies, these processes enhance profitability and sustainability through deeper consumer understanding and employee empowerment. They accelerate speed to market, reduce waste and drive innovation, while enabling more relevant product assortments and refined value propositions. This leads to unprecedented consumer engagement, potentially boosting sales by over 20%. Moreover, the processes improve consumer confidence and operational agility by facilitating precise responses to demand fluctuations and volatile market conditions.
Ultimately, these mega processes transform how companies interact with consumers, develop products and navigate market dynamics, fostering a more efficient, innovative and consumer-centric business model. From improving on-shelf availability and conversion rates to increasing consumer net promoter scores, the impact of these processes revolutionizes the entire value chain, transforming companies into agile, consumer-focused organizations ready to thrive in today's dynamic market environment.
Five imperatives for successful reinvention
Successful reinvention of the value chain demands a fundamental rethinking of how businesses operate. To guide companies on where to begin the reinvention journey, we've identified five key imperatives:
Focus on the greatest areas of value, rather than getting distracted by isolated proofs of concept.
Upskill your workforce and reimagine roles to thrive in an AI-augmented world.
Maintain high standards of trust, transparency and ethics in all AI initiatives.
Build the data and technology foundations to support true enterprise-wide reinvention.
Make the ability to change a core part of your organizational DNA.
Your next steps in the reinvention journey
As we stand at this inflection point, the opportunity before us is immense. Those who embrace the power of technology to reinvent their entire value chain will set new standards of performance and consumer relevance. But success requires bold vision, commitment to change and expert guidance to navigate the complexities of this journey.
The future is here - are you ready to reinvent?
Reach out to Oliver Wright to discuss how you can unlock the full potential of your consumer goods value chain.