The situation
Leadership at a global consumer packaged goods company knew growth was possible. “How” was the question. Despite strong top-line growth, the company’s profitability lagged that of its peers. Market pressures, COVID, and rising commodity costs were headwinds that put the company at immediate risk. It needed a plan to become more scalable and more efficient.
Senior leaders understood the complexity of operating a global, multi-branded business, creating natural efficiency challenges.
Decision-making moved at a glacial pace throughout the organization, and it was often slow to respond to changes in the market. On top of that, margin pressure was mounting, as selling, general, and administrative expense (SG&A) costs were consistently deleveraging revenue. It needed to reduce cost, improve productivity, and mitigate risk across multiple fronts.
To improve profitability in a very competitive marketplace and prepare for its next stage of growth, company leaders wanted to restructure the organization and achieve sustainable cost improvement through an operating model transformation. That required changes in processes, technology, and the organizational structure that dictate the daily way of working.
Reducing risk, increasing productivity, and faster decision-making
The solve
Deloitte worked with a leadership group consisting of subject-matter specialists from critical disciplines within Deloitte. Their jobs: Bring the best thinking in the industry to root out greater efficiencies and enhance operability. The engagement spanned three phases.
The first phase involved 10 weeks of deep-dive interviews with the top 15 executives within the company and 30 functional leaders. The team used analytics tools to assess financial, people, and systems data. The effort revealed two things that needed fixing: a decentralized operating model that was creating inefficiencies and redundancies and the discovery that the company’s total SG&A costs were far greater than its peers.
The second phase uncovered and validated near-term opportunities in the areas of real estate, indirect spend, automation, and manufacturing plants. Through interactive workshops, Deloitte created momentum around a new operating model; the team tested key components to make sure it functioned smoothly.
The third phase focused on transformation. Over 10 months, Deloitte delivered the vision by methodically moving through different levels of the organization and, within each, assigned new roles, built consensus, and implemented planning. This type of change is never easy, but through building momentum and motivation for the final result, changes were ultimately seamless for everyone involved.
Building a global, scalable model to drive growth
The impact
Once this program was announced, the company’s stock jumped 16% and continued to move positive on the news. The company is now better positioned to handle market fluctuations, and it has the time and capital to invest in new strategies that better position the company for growth.
Deloitte’s team of industry subject-matter specialists and analytics tools were key to establishing the new way of working and bringing it to life throughout the organization.
The company can now invest more in innovation, is better coordinated across functions globally, and performs with greater agility because it operates with lower baseline costs. There is now clear accountability for all roles and greater transparency in its data, both of which give the company more control to influence outcomes.
Faster, more agile, in shape for future growth
