The courage to grow, by Kantar’s J. Walker Smith

The foundational prerequisite of growth is the courage to grow. Impediments to growth sit within a company itself. Growth is rarely hostage to the marketplace, writes, J. Walker Smith, knowledge lead, consulting division, Kantar.

The topline stagnation among global consumer goods companies in the years leading up to the pandemic was paralleled by rapid growth among startups and more agile local and national brands. Many iconic businesses have been introduced during past recessions. Even in sectors hardest hit during the pandemic, brands that pivoted to delivery, e-commerce, privacy safeguards, home-centred solutions, hygiene signalling and virtual experiences were able to grow.  

 The first place to look for growth is not externally but internally: at the structure, skills and competencies it takes to grow. Kantar’s decades of work with companies worldwide points to five critical imperatives.  

1 Focus on doing the right things rather than waiting for the marketplace to right itself

Companies handicap themselves with deficient skills, capabilities, systems and KPIs, along with cultures aligned against fact-based decision-making, agile experimentation, and a clear purpose. The fundamentals must be revisited; two things in particular. The first is a full-blown commitment to customer-centricity, which has been trending down in recent years. The second is a structurally embedded competency in organisational learning, which, in an era that has seen digital level the playing field, is one of is the few remaining sources of advantage. 

2 Grow the category, not just the brand

Strong brands often beat the odds in weak categories, but that does not mean growth is only about brands. A Kantar analysis found that brands are five times more likely to grow if their categories are growing. Another Kantar analysis found nearly half of new products succeed by growing category occasions. Categories also pose risks that are impossible to avoid entirely, but the impact is worse for brands that have marginalised category considerations in strategy, planning and finances.

Growth-oriented companies take control of their categories in two ways. First, they broaden category boundaries. The Kantar approach is to recast categories by “The Rule of 3 per cent.” A brand should plan against bigger boundaries that offer a surfeit of opportunities. In this way, pet food becomes pet care, automotive becomes smart mobility, alcohol beverages become social beverages, cleaning becomes public health, dairy becomes protein, and the local pharmacy becomes local health care.  

 Second, brands must command a shared, decision-centric category vision. Misunderstanding what competes for consumers’ share of wallet has long been an Achilles’ heel of growth. Growth-oriented companies constantly refresh their understanding of the underlying drivers of demand. 

3 Resecure the core, and target softness among competitors

The immediate aftermath of the pandemic has brought the marketplace to a moment where consumers have opened up their consideration sets. Failure to resecure choices will mean a leakier customer base handicapping growth. All brands have been affected, so this is also a propitious moment to target competitive softness.

Two things should be done. First, remap the structure of demand. With home and office trading places, online and offline coming together, and immersive experiences becoming critical, demand is changing. Second, invest behind fewer yet bigger brands. Innovation, too, must shift from small ideas to transformative ideas worth the logistical complexity. 

4 Find profit through purpose, rather than making profit the only purpose.  

The pandemic brought purpose into sharper focus. BrandZ data show that responsibility is three times more important to reputation than a decade ago. Other BrandZ tracking found that brands committed to purpose grew value 2.5 times more than brands with little or no purpose. If nothing else, competition for the talent it takes to grow will force the hand of companies, because the next generation is more demanding about purpose. 

Two steps are involved. The first is to embrace a credible, differentiated purpose strategy. This means an entirely new way of doing business, not tweaks to business as usual. The second step is to embed inclusivity in culture and strategy, which begins by benchmarking with the Kantar Inclusion Index and then using Kantar’s Issue Radar to gauge the ongoing fit of corporate and brand positions with the evolving landscape of social issues. 

5 Plan against scenarios, not certainties. Disruptions are the new normal. Discontinuities that upend business models are becoming a feature of the marketplace, not the exception – a reversal of the ‘moderation’ within which today’s business models were developed. The global insights leader at one Kantar client expects that his company will have to “migrate from certainties to scenarios.”

Two things are critical. First, bring together top-down and bottom-up trendspotting and futures assessment. Second, utilise ‘futures thinking’ for strategic forecasting. The logic and maths of today’s best-in-class forecasting models rely on an approach unsuited for a future of disruptions. Growth-oriented companies are organised to capture growth outside the comfort zone of business as usual, for which Kantar’s Consulting division can ready your business.