November 27, 2013
CPG Lacks Talent for Trade Promotion Effectiveness
Through a special arrangement, presented here for discussion is a summary of a current article from the monthly e-zine, CPGmatters.
According to a survey from Accenture, more than half of the senior executives of CPG companies believe they lack the talent to capitalize on their technology investments that support trade promotions.
According to Accenture’s Perfect Promotion Study, based on interviews with 350 senior executives at large CPG companies, 61 percent believe their technology investments have produced a wealth of data that can help improve their trade promotion performance, but they lack the talent needed to put the data to its most effective use and boost the return on their analytics investment. In fact, one in five (21 percent) admit to trusting intuition more than the available data to make trade promotion-related decisions.
"The right approach to trade promotions is to blend leading edge technology with outstanding talent," said Ed Stark, a managing director in Accenture’s Consumer Goods & Services practice. "In many cases, the heroic efforts of individuals in CPG companies can hide many of the failings of their trade promotion efforts, and the successes that are achieved often occur in spite of — not because of — the tools, talent and processes at their disposal."
More than half of them (54 percent) view predictive analytics as important or very important for companies seeking improvements in trade promotion performance. However, 24 percent believe predictive analytics has limited importance.
"We have detected a strong feeling that companies are not making the most of the data that their technology investments have generated, and perhaps more worrisome, a large proportion of our survey respondents do not trust the data," said Alex Kushnir, a managing director in Accenture’s Consumer Goods & Services practice. "The quality of the data can be impacted by a number of factors: the tools used to capture it, the number of steps in the trade promotion process and the talent used to analyze and leverage it. Companies need to look at the process from end-to-end to be certain of the quality of the data that their teams are using."
Fifty-seven percent say they prefer to contract for outsourced talent in the promotions area rather than hiring talent directly. Slightly more than a quarter of executives (29 percent) indicate both a need for greater flexibility in terms of resourcing and a difficulty in attracting the right caliber of talent.
BrainTrust
Recent Discussions
Discussion Questions
How can vendors overcome the challenges of recruiting and retaining talent with analytical skills? What are the pros and cons for vendors as well as retailers of outsourcing areas such as predictive analysis?
Poll
The tools for trade promotion analysis have been around forever. I was doing this at Quaker in the early ’80s and Nielsen in the late ’80s – early ’90s. Most CPG companies didn’t want to hear how bad their deals were doing in terms of generating incremental profits. I don’t think it’s a skill problem, it’s a lack of desire to know and manage to the results problem.
Vendors need to find the programs at universities that are creating strong analytics programs and become involved with those universities. While vendors need that talent, students do not think of vendors when looking for a job, so vendors need to be more visible to those students.
A computer monitor is a terrible window to the world. Trying to manage the business through spreadsheets alone is a danger. The issue for some analysts is that they are not held accountable for learning and understanding the business from the perspective of the shopper, the retailer, and the sales person.
I am impressed with the depth and breadth of analysis possible – but the insights are not always built on business beyond pivot tables.
The right caliber of talent? Is the software that hard to use? Software products with a ton of capabilities and features that aren’t used to the last drop…tell me it isn’t so!
Well it’s probably some combination of more functionality than anyone would ever need thus making the solution overly complicated with training and adoption difficult, and some amount of lack of funding by the CPG companies for training and adoption which is usually never properly budgeted in a typical IT project.
How about simpler, more effective software and building in the right amount of training? If software vendors went to market with the “fact” that the CPG company would have to outsource the use of their systems, they wouldn’t sell much.
Hire people that have been using analytics for the past 30 years to help uncover insights and make informed business decisions, rather than ignoring us because we’re over 50.
Analytics is a business tool for decision-making and has been around, in one form or another, since business began. Today we simply have more and varied data coming out of a very large hose at a velocity never seen before. Trade promotions is another process that is data-intensive. Learning how this new set of data is derived and the ways of using it, while certainly requiring new skills, also means a different way of looking at the business and finding the right mix of business acumen (some might say “gut” or “intuition”) and being data savvy.
Time to get these capabilities into the corporate culture!
Building the capability to effectively exploit its data is a daunting task for the CPG company. It is too easy to underestimate the unique talents necessary to play in the world of data science. Talk to any company or institution that is active in the development or application of data science techniques and you will learn that attracting top (or even competent) talent is the single most difficult fill in today’s hiring world. Those entities that are serious players pay and treat their scientists extremely well, and give them the institutional support that they need to practice what is a very creative craft.
How many CPGs have the vision and resources to build up a data science team given this reality? Some, but not many. In my experience I often encounter CPGs and retailers who believe that they can create the team and the tools to perform the desired analyses in-house, but soon learn that the task is way beyond their capabilities. It really is difficult for the non-expert to appreciate the complexity entailed in creating a top caliber capability. This actually is today’s version of “it is rocket science”!
I think that a good solution for many CPGs is to build a small, but highly talented group of analysts who are able to work with and help make actionable the insights that companies which specialize in retail applications of data science are able to provide. This model of interaction has proven to be quite successful, and recognizes the degree of specialization that success requires.
Having spent the bulk of my career in the Information Technology (IT) industry, I’ve seen discussions like we have here over and over again in recent years. What is even more discouraging is the billions of dollars wasted on useless hardware and software that for many reasons will not produce the results desired and needed.
So what is the problem with all of this? Is it the hardware, is it the software, is it the people running the IT department? The answer of course is yes that it is almost certainly one or more of these components, which was always caused by by another non IT person or group more commonly known as company executives.
For decades, corporate and government leadership have admitted knowing little or nothing about information technology yet insist on making strategic decisions that will make or break the plan to design, purchase and or implement an IT system. From any outside perspective this is insanity and has no place in modern decision practices.
So why does this problem continue to exist and thus allow for the on going erosion of profit dollars and maybe even cause the demise of a company? The answer is power. Chief something or other officers are paid by the size of their company, its ability to pay and the scope of their responsibility and mission. Adding people and facility is growth and growth can get you a raise. The question of whether it works to improve profits is always answered by someone with little or no knowledge of the subject.
So, if you are on a board of directors and voting for a budget you need ask yourself does this person have intimate knowledge of the subject at hand. If the answer is no, outsourcing is a better direction for the time being.
I agree with Camille P. Schuster completely, that CPG companies as well as retailers still struggle to create compelling reasons for students to join their industries.
Further, I also believe that although these challenges have existed for years, and much of the decision process was accomplished through “gut feel,” we now have some great technologies that both CPGs and retailers are leveraging to make informed trade promotions decisions. So, although skilled people are in demand, the tools in the market place can help be a solution to these perennial challenges.
I am a staffing professional who has more than 15 years of experience, the majority of which in the retail space. Unique to my background is a degree in retail sales and marketing and time in HR/recruiting for a few of the worlds largest retailers in the U.S. and globally…and with big “6-5-4” experience. I have seen it all.
There keys to tackling this “lack of talent” issue. One, you have to groom and cultivate your incoming talent to meet your immediate needs and foster an environment that is cutting edge for the future, all while focusing on strong retention tactics (that is a lot of work). You are only as strong as what you can offer talent to join your organization and stay put, as there are many other companies looking to do the same thing. You have to make that choice if you want to be “the best of the best.”
Secondly, there should be a process in place of “re-tooling” your current talent on current/future practices, trends, and technology. You are only as good as your investment. Lock your talent in once they have gained the knowledge and training that you need. You can do that contractually. I have worked very closely with legal departments to “protect people investments.”
Last but not least, a focus on strong succession planning and movement is another key to retention and attraction of talent. A strong program offering will attract talent from the outside and retain current talent, and that past “wins and flops” are learned from in order to repeat, retool, or avoid, for your growing financial and business future.
I would suggest benchmarking industry leaders, from your perspective. There are inexpensive tools available to provide such benchmarks. Some tools you may already be paying for but not using them to the full extent of their ability or your contract with them (third parties). Use what works and change the rest.
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The tools for trade promotion analysis have been around forever. I was doing this at Quaker in the early ’80s and Nielsen in the late ’80s – early ’90s. Most CPG companies didn’t want to hear how bad their deals were doing in terms of generating incremental profits. I don’t think it’s a skill problem, it’s a lack of desire to know and manage to the results problem.
Vendors need to find the programs at universities that are creating strong analytics programs and become involved with those universities. While vendors need that talent, students do not think of vendors when looking for a job, so vendors need to be more visible to those students.
A computer monitor is a terrible window to the world. Trying to manage the business through spreadsheets alone is a danger. The issue for some analysts is that they are not held accountable for learning and understanding the business from the perspective of the shopper, the retailer, and the sales person.
I am impressed with the depth and breadth of analysis possible – but the insights are not always built on business beyond pivot tables.
The right caliber of talent? Is the software that hard to use? Software products with a ton of capabilities and features that aren’t used to the last drop…tell me it isn’t so!
Well it’s probably some combination of more functionality than anyone would ever need thus making the solution overly complicated with training and adoption difficult, and some amount of lack of funding by the CPG companies for training and adoption which is usually never properly budgeted in a typical IT project.
How about simpler, more effective software and building in the right amount of training? If software vendors went to market with the “fact” that the CPG company would have to outsource the use of their systems, they wouldn’t sell much.
Hire people that have been using analytics for the past 30 years to help uncover insights and make informed business decisions, rather than ignoring us because we’re over 50.
Analytics is a business tool for decision-making and has been around, in one form or another, since business began. Today we simply have more and varied data coming out of a very large hose at a velocity never seen before. Trade promotions is another process that is data-intensive. Learning how this new set of data is derived and the ways of using it, while certainly requiring new skills, also means a different way of looking at the business and finding the right mix of business acumen (some might say “gut” or “intuition”) and being data savvy.
Time to get these capabilities into the corporate culture!
Building the capability to effectively exploit its data is a daunting task for the CPG company. It is too easy to underestimate the unique talents necessary to play in the world of data science. Talk to any company or institution that is active in the development or application of data science techniques and you will learn that attracting top (or even competent) talent is the single most difficult fill in today’s hiring world. Those entities that are serious players pay and treat their scientists extremely well, and give them the institutional support that they need to practice what is a very creative craft.
How many CPGs have the vision and resources to build up a data science team given this reality? Some, but not many. In my experience I often encounter CPGs and retailers who believe that they can create the team and the tools to perform the desired analyses in-house, but soon learn that the task is way beyond their capabilities. It really is difficult for the non-expert to appreciate the complexity entailed in creating a top caliber capability. This actually is today’s version of “it is rocket science”!
I think that a good solution for many CPGs is to build a small, but highly talented group of analysts who are able to work with and help make actionable the insights that companies which specialize in retail applications of data science are able to provide. This model of interaction has proven to be quite successful, and recognizes the degree of specialization that success requires.
Having spent the bulk of my career in the Information Technology (IT) industry, I’ve seen discussions like we have here over and over again in recent years. What is even more discouraging is the billions of dollars wasted on useless hardware and software that for many reasons will not produce the results desired and needed.
So what is the problem with all of this? Is it the hardware, is it the software, is it the people running the IT department? The answer of course is yes that it is almost certainly one or more of these components, which was always caused by by another non IT person or group more commonly known as company executives.
For decades, corporate and government leadership have admitted knowing little or nothing about information technology yet insist on making strategic decisions that will make or break the plan to design, purchase and or implement an IT system. From any outside perspective this is insanity and has no place in modern decision practices.
So why does this problem continue to exist and thus allow for the on going erosion of profit dollars and maybe even cause the demise of a company? The answer is power. Chief something or other officers are paid by the size of their company, its ability to pay and the scope of their responsibility and mission. Adding people and facility is growth and growth can get you a raise. The question of whether it works to improve profits is always answered by someone with little or no knowledge of the subject.
So, if you are on a board of directors and voting for a budget you need ask yourself does this person have intimate knowledge of the subject at hand. If the answer is no, outsourcing is a better direction for the time being.
I agree with Camille P. Schuster completely, that CPG companies as well as retailers still struggle to create compelling reasons for students to join their industries.
Further, I also believe that although these challenges have existed for years, and much of the decision process was accomplished through “gut feel,” we now have some great technologies that both CPGs and retailers are leveraging to make informed trade promotions decisions. So, although skilled people are in demand, the tools in the market place can help be a solution to these perennial challenges.
I am a staffing professional who has more than 15 years of experience, the majority of which in the retail space. Unique to my background is a degree in retail sales and marketing and time in HR/recruiting for a few of the worlds largest retailers in the U.S. and globally…and with big “6-5-4” experience. I have seen it all.
There keys to tackling this “lack of talent” issue. One, you have to groom and cultivate your incoming talent to meet your immediate needs and foster an environment that is cutting edge for the future, all while focusing on strong retention tactics (that is a lot of work). You are only as strong as what you can offer talent to join your organization and stay put, as there are many other companies looking to do the same thing. You have to make that choice if you want to be “the best of the best.”
Secondly, there should be a process in place of “re-tooling” your current talent on current/future practices, trends, and technology. You are only as good as your investment. Lock your talent in once they have gained the knowledge and training that you need. You can do that contractually. I have worked very closely with legal departments to “protect people investments.”
Last but not least, a focus on strong succession planning and movement is another key to retention and attraction of talent. A strong program offering will attract talent from the outside and retain current talent, and that past “wins and flops” are learned from in order to repeat, retool, or avoid, for your growing financial and business future.
I would suggest benchmarking industry leaders, from your perspective. There are inexpensive tools available to provide such benchmarks. Some tools you may already be paying for but not using them to the full extent of their ability or your contract with them (third parties). Use what works and change the rest.