The managing partner for McKinsey in North America, Liz Hilton Segel has suggested that consumer companies need to accelerate their pace in joining the digital transformation.
According to her, the world is evolving into a digitalized one and it is up to consumer companies to tailor their aims towards the new normal either through the adoption of analytics or improving the productivity and the experience of digital channels.
“The first thing I think consumer companies should do is double, triple, quadruple their ambition around the scale and pace of their digital transformation – whether that’s the adoption of analytics or whether that’s improving the productivity and the experience of digital channels.”
Speaking on the ‘Top Priorities’ consumer companies should consider to remain relevant during 2020 and beyond, she noted that consumer companies should consider reskilling as a competency of their companies as the pandemic has caused drastic shifts in importance of specialization.
“Really take reskilling seriously as a competency in your organization. There’s no question that all of the shifts that are happening—whether it is the shift of sales channels or service channels to digital or whether it is the use of automation—will mean changes for everyone’s workforce.”
As Sajal Kohli reiterated his colleague’s point, he emphasized that this is not the time to be mediocre when finding solutions but to challenge the status quo and modify the organization to fit in the now.
“Frankly, not a time for admiring the problem and incrementalism. This is actually a time for being massively transformational and not tweaking on the margins. Challenge every assumption, challenge your value chain, challenge your asset structure, and see if you can reinvent the organization or the company.”
He went on to urge these companies to be radical in accessing opportunities and taking a second look at what they stand for as this is the best time for any organization to reset its portfolio.
“I believe it’s very important for management teams to take stock of a few things.
One, clearly, is a programmatic look at your portfolio. You’ve got to very aggressively look at new growth opportunities through inorganic routes—so make acquisitions but also equally focus on divestitures. This is a great time to reset your portfolio and basically chase how consumer shifts are happening in terms of consumer preference.”
The senior partner in the Chicago office who doubles as the global leader of the Consumer-Packaged Goods and Retail Practices also recommended that for companies to fast-track productivity and remain relevant in the current crisis, they need to project ten times productivity gains when making a budget.
“You have to accelerate productivity and reset your cost structure to be more competitive going forward. This is much more than the budgeting process of 2 to 3 percent productivity gains to beat inflation. It is actually a 20 to 30 percent reset in your cost structure so you’re competitively fit.”
