The global power brands that have long defined the consumer goods industry are no longer untouchable. The rules of the game have changed, and consumers are now in control. They expect their consumer goods brands to provide the products, services, and experiences that meet their individual needs at just the right moment.
The traditional operating models simply weren’t designed for this level of complexity. Successful companies will be those who achieve an incredible amount of organizational agility — something many businesses just don’t have yet.
To find new growth, brands must solve these challenges, injecting agility across the value chain, leveraging a wider ecosystem of partners, and delivering relevance at scale for a marketplace of millions of individuals.
Chief financial officers are uniquely positioned to help drive this journey forward. They have the necessary insights to build the business case for change, to target operational improvements, and to apply new digital technologies. And they have a crucial role in driving the efficiencies in the core business that will fund the pivot to more profitable growth.
New Roles, New Skillsets
Delivering relevance at scale means adapting the consumer goods supply chain for new levels of personalization and multiple sales channels. Given the challenges of doing this alone, most brands will need to leverage a much wider ecosystem of partners. And here finance chiefs have a vital role to play. Bringing a data-driven approach to selecting partners ensures this complex endeavor remains focused on the value-adding outcomes the business is targeting.
When it comes to operational efficiency, CFOs need to look beyond SG&A expenses to target the cost of goods sold. Zero-based budgeting is a methodology gaining traction in consumer goods, with Accenture’s research showing the greater visibility it brings can lead to rapid COGS savings of up to 10%.
In addition, consumer goods CFOs are taking a lead on data governance. They understand the value of data and see it as a strategic business asset, with 84% of finance departments taking responsibility for their organization’s data governance (higher than in any other industry surveyed). In fact, Accenture’s research shows “inconsistent, inaccurate, and inaccessible data” is viewed as the greatest challenge facing today’s consumer goods finance chiefs.
These new requirements are changing the CFO skills profile. CFOs themselves say that anticipating and managing risk, the ability to think strategically long-term, and developing insight into new technologies are now their most important capabilities. What’s more, they know the broader finance function needs to change too, with the ability to innovate now the most sought-after skill for junior finance staff.
Five Actions to Take
So what are the immediate priorities for consumer goods CFOs as they drive relevance at scale for their brands? Here are five that every CFO in the industry should be taking today.
- Digitalize finance and then the company. Finance is an ideal testing ground for digital technology, automation, and artificial intelligence. Use past experience and lessons learned to drive a transformation across the business.
- Harness data for insights. Data visibility is valuable. Champion the use of real-time analytics and insights in the C-suite and beyond.
- Develop the future finance workforce. Plan holistically for future talent needs, including promoting the greater use of AI and other innovative technologies.
- Drive a deep transformation of operations. Consider zero-based budgeting as a means of creating spend visibility, driving the efficiencies that can fund a pivot to new growth.
- Be the architect of value. Influence decisions about ecosystem partner organizations, ensuring every move is focused on delivering ultimate value for the business.
Above all, be at the center of business decision-making as your company pivots to the operating models that deliver consumer relevance and capture new growth opportunities in a highly complex, uncertain, and ever-changing consumer goods marketplace.
Paul Prendergast is managing director for the Consulting practice in the products industry at Accenture.