Driving the return on resilience in consumer goods

Our latest research reveals that resilience has become a requirement for long-term profitable growth. Resilience is a company’s ability to withstand, adapt and prosper through uncertainty and volatility—to ultimately emerge stronger.

In recent years, companies have experienced shocks to global supply chains, market dynamics and consumer behavior that have reset the competitive environment. Accenture’s Global Disruption Index, designed to measure the impact of economic, social, geopolitical, climate, consumer and technological challenges—found that the overall level of disruption increased by 200% from 2017 to 2022, compared to 4% from 2011 to 2016.

In our analysis to understand the traits that distinguish companies that sustain profitable growth through volatility, we placed 1,615 global firms in our analysis into one of 5 categories, based on their revenue growth and profitability performance.

The assessment indicated that 15% of companies demonstrated consistent, long-term profitable growth before, during and after the pandemic. We found that these companies not only sustain their profitability over time but also grow it.

We used Accenture’s Resilience Index (RI) to analyze long-term profitable growth businesses across six performance dimensions: financial; sales; technology; global operations; talent and sustainability, uncovering the important ways in which these consistently successful businesses stand out.

Our findings show that only 4% of CPGs are performing above median in six performance dimensions. The top performers stood out in three important ways:

1. Strong capabilities across all performance dimensions
Nearly half of companies with long-term profitable growth excel in financial, business and technology metrics, consistently outperforming low-performing peers across all capabilities within these areas.

2. More resilient amid disruptions
Companies with long-term profitable growth recover more quickly and emerge stronger following disruptions or crises. In contrast, low-growth and low-profitability companies experience declines in performance across all dimensions.

3. Strong digital core
Companies with long-term profitable growth significantly outperform their low-growth, low-profitability peers in technology. A strong digital core, integrated throughout the organization, serves as a key driver of their sustained superior performance. Companies with long-term profitable growth demonstrate a stronger balance across all areas of the RI compared to their low-growth, low-profitability peers, regardless of industry. In our research, we also found that RI performance is also an early indicator of future financial performance.

Growing Return on Resilience

Companies that target six dimensions of resilience and balance investment across all three key strengths—financial strength, business strength (which includes strengths associated with sales, talent, global operations, and sustainability/ESG) and technology strength—are more likely to stay in the leading position. Moreover, the greater number of RI capabilities that a company invests in, the greater the chances of that company sustaining high performance.

In fact, companies with only four or fewer capability strengths see negligible results after three years. To improve their chances of maintaining long-term performance through disruptive business cycles, they must develop strengths in at least five RI dimensions. Even companies performing well today will struggle to maintain their position if they don't increase their investments in resilience.

In the consumer goods industry, 27% of profitable companies are under-investing in resilience, making them four times less likely to maintain their high performance in the future.

Building resilience is a complex task that demands a holistic approach rather than viewing it as a series of isolated interventions. For instance, nearly two-thirds of companies, across industries, exhibit above-average strengths in technology. But often, companies that invest heavily in new technologies overlook other crucial areas, such as talent or operational processes, which are essential for maximizing the technology's full potential.

Holistic approach to building resilience

Creating resilience requires a multifaceted approach. CEOs need to think about how they can assess their current level of resilience, identifying relative strengths and areas of improvement. Investing in at least one or a few areas of resilience can help companies achieve high performance and position them for reinvention. However, sustaining that performance requires a well-balanced set of strengths across all resilience dimensions.

Leaders who want to unlock resilience, following a multi-faceted approach to thrive in good and bad times need to focus on these three key initiatives: 

1. Develop foresight to identify early warning signals

Building the right combination of capabilities is crucial. For this, companies need to have foresight and a clear vision of the end state. It requires business leaders to identify the capability gaps in resilience dimensions and direct investments strategically to close them. It is also important to take a multi-faceted approach, investing across the six performance dimensions, for a balanced set of capabilities.

It is crucial for companies to commit to sustaining those investments over time to ensure long-term success. Over the past four years, only 39% of CPGs have remained in the top performance tier, compared to 52% across industries, whereas 48% have dropped to high profitability and low growth, and 9% have seen their fortunes reverse, indicating that failing to invest across key dimensions can lead to significant setbacks. Without vigilance, even high-performing companies risk falling behind.

2. Invest in technology literacy with a focus on building leadership tech literacy as well as digital core

Companies that prioritize developing a strong digital core, including AI and generative AI, can create a significant competitive advantage. However, the true potential of these technologies is unlocked by the talent behind them—the creativity, intuition and experience of the workforce. This means investment in technology is essential, but it must be complemented by talent and effective leadership.

The technology and data literacy of the leadership team is crucial for making informed decisions, driving strategic initiatives and leveraging digital tools to enhance organizational performance. The integration of a strong digital core, a robust talent strategy and a high technology quotient among the executives help companies drive sustained performance and competitive advantage.

3. Strengthen personal resilience

Building personal resilience among executives is crucial for fostering a resilient organization. When leaders demonstrate resilience, they inspire confidence and resilience in their teams. CEOs, in particular, have a significant influence on the mindset and actions of their employees. By leading with purpose and creating a positive culture, CEOs can drive long-term profitable growth and ensure that resilience becomes a core value of the organization.

CEOs have a direct role in building worker resilience and mobilizing actions that enable long-term profitable growth. Leaders who embrace resilience and view it as a way to advance their organization are often more successful. Their positive approach boosts employee happiness and strengthens the company culture, leading to better overall performance and returns.

Take the next step

In a world grappling with change and disruption, building resilience is not an option but a necessity. By prioritizing resilience and making strategic investments across key dimensions, companies can position themselves for sustained success and profitability. The journey towards resilience requires commitment and strategic foresight, but the rewards are worth the effort.

Reach out to Till Dudler to learn more about how your company can drive resilience and sustained profitability.