Kraft, Harvard Business School Talk Customer Centricity
October 5, 2009 - In today's challenging economy with unprecedented consumer power and shifts in shopping behavior, consumer products manufacturers and retailers must rethink business as usual. During a CGT Web event on Sept. 30, 2009, Dr. Ranjay Gulati, prolific author and renowned thought leader at Harvard Business School, provided strategic insights for winning the loyalty of modern consumers and building market leadership for years to come.
Ric Noreen, senior director, Integrated Planning & Customer Collaboration, Kraft Foods, followed by building on Gulati's models with Kraft-specific examples, including practices for building a resilient organization through customer-centricity and collaboration within the enterprise and across the business network; new organizational capabilities, structure and performance management critical for successful execution; and the benefits, pitfalls and strategic roadmaps for embarking on this journey.
Here are key highlights from the event:
--"My book, 'Reorganize for Resilience,' actually began by looking at what companies were doing in turbulent markets," said Dr. Gulati. Studying companies during recessionary times, he found that not all companies survive and even fewer prosper. "Companies are struggling in turbulent markets today more than ever because there is an undercurrent of commoditization also happening." Gulati also says that as companies aspire to raise profit and volume, they at the same time face a decline in price, which leads to cost cuts. When you cut cost, quality and service levels go down, then the price comes down even more, and we fall into what Gulati calls a "toilet bowl strategy." In effect, Gulati gives three alternative vehicles for differentiation: product differentiation, customer management and turning products to solutions. "It's wonderful to talk about loving your customers, engaging your customer, relating to them, giving them better products, delivering something of value, and so forth, but actually making it happen is kind of a black box that so far has not really been opened," said Gulati.
--Ric Noreen of Kraft Foods next covered the five "C's" of silo-busting, including:
- Coordination: A more systematic approach to customer-centricity;
- Cooperation: How to engage our consumer marketers to reach their consumers through our customers
- Capabilities: How to transform from sales management to general management and instill a customer ROI mindset;
- Connection: How to better leverage capabilities through external alliances; and
- Clout: How to evolve from Kraft scale to customer scale.
"We believe that, when successful, that will lead to sustainable growth, competitive advantage and higher levels of marketing efficiency," said Noreen.
--Peter Brandt, vice president, Industry Solutions Marketing for SAP, reiterated the successes of Kraft's customer-centric implementation from a technology point of view. Brandt revealed the foundational, operational and strategic stages of implementation at Kraft, including enabling a common business process strategy through a global deployment of SAP. "Kraft had the ability to be able to forecast when, where and what needs to be in place before even the retail folks knew it," closed Brandt.
To listen to this event in its entirety, click here.
Ric Noreen, senior director, Integrated Planning & Customer Collaboration, Kraft Foods, followed by building on Gulati's models with Kraft-specific examples, including practices for building a resilient organization through customer-centricity and collaboration within the enterprise and across the business network; new organizational capabilities, structure and performance management critical for successful execution; and the benefits, pitfalls and strategic roadmaps for embarking on this journey.
Here are key highlights from the event:
--"My book, 'Reorganize for Resilience,' actually began by looking at what companies were doing in turbulent markets," said Dr. Gulati. Studying companies during recessionary times, he found that not all companies survive and even fewer prosper. "Companies are struggling in turbulent markets today more than ever because there is an undercurrent of commoditization also happening." Gulati also says that as companies aspire to raise profit and volume, they at the same time face a decline in price, which leads to cost cuts. When you cut cost, quality and service levels go down, then the price comes down even more, and we fall into what Gulati calls a "toilet bowl strategy." In effect, Gulati gives three alternative vehicles for differentiation: product differentiation, customer management and turning products to solutions. "It's wonderful to talk about loving your customers, engaging your customer, relating to them, giving them better products, delivering something of value, and so forth, but actually making it happen is kind of a black box that so far has not really been opened," said Gulati.
--Ric Noreen of Kraft Foods next covered the five "C's" of silo-busting, including:
- Coordination: A more systematic approach to customer-centricity;
- Cooperation: How to engage our consumer marketers to reach their consumers through our customers
- Capabilities: How to transform from sales management to general management and instill a customer ROI mindset;
- Connection: How to better leverage capabilities through external alliances; and
- Clout: How to evolve from Kraft scale to customer scale.
"We believe that, when successful, that will lead to sustainable growth, competitive advantage and higher levels of marketing efficiency," said Noreen.
--Peter Brandt, vice president, Industry Solutions Marketing for SAP, reiterated the successes of Kraft's customer-centric implementation from a technology point of view. Brandt revealed the foundational, operational and strategic stages of implementation at Kraft, including enabling a common business process strategy through a global deployment of SAP. "Kraft had the ability to be able to forecast when, where and what needs to be in place before even the retail folks knew it," closed Brandt.
To listen to this event in its entirety, click here.