Savvy shoppers wait in anticipation, while Australian retailers are gearing up for the onslaught. Amazon’s arrival is imminent.
In the last five years, Simplot CMO and chief digital officer, Fiona Allen, has made a concerted effort to become a digital transformation leader.
“The world is changing at such a rapid pace, if you don’t reinvent yourself now as a marketer, you will soon become irrelevant, much like those businesses that haven’t changed,” she told CMO. “You won’t be able to get the jobs.
“Five years ago, anyone in my kind of role realised you had to start reinventing yourself, take on digital knowledge and learn about this. Marketers coming through now have been born in this age and just get it, and as we know, this is the future. I made a concerted effort to shift focus to roles where I could build these capabilities, but also leverage all these skills together.”
But digital isn’t just about marketing strategy, it’s also about business transformation and leveraging opportunities coming through via digital, Allen said.
“We can not only use those opportunities to meet consumer expectations, but also to solve business challenges and find value,” she said.
Leading digital change
It’s this quest for digital reinvention that led Allen to Australian food manufacturer, Simplot. The privately-owned company owns an array of proprietary food brands including Leggos, John West, Bird’s Eye and Edgell, as well as a B2B business servicing pubs, cafes and food outlets across the country.
Allen built her career in marketing and product roles across B2C, B2B and business-to-government. But it was when she became head of brand and advertising at GE Capital that she had the first opportunity to lead transformation – in this instance, around the brand. At Medibank, she rose to executive GM for marketing, digital and product and was again asked to lead significant change.
Allen was approached for the joint CMO/CDO role at Simplot last October. Having struggled to find the digital leadership skills within the FMCG space, the company was looking to recruit someone from the services sector.
The need for business transformation was evident, she said. As well as the widespread depression in manufacturing across Australia, Simplot’s proprietary brands have been under significant pressure for some time thanks to the competitive retail environment. In addition, in the B2B sector, distribution monopolies have chipped away at value and price points.
2014 financial results published by the Australian Financial Review in February showed Simplot’s annual sales grew just over 4 per cent to $1.24bn, yet bottom-line profits were 26 per cent lower year-on-year, with net profit down to $33.8m, compared to $45.9m the previous year.
“At the same time, food manufacturing has been under lots of pressure as a result of a huge range of issues - from the high Australian dollar to the low inflation rate and challenges to unionised labour, to role of retailer and distributor,” Allen explained. “All have put downward pressure on margins. Trying to create a differentiation point for those proprietary brands that props up and unlocks the value proposition is the challenge.”
These stark business realities, combined with the opportunity digital technology provides in terms of creating and distributing new value, and ever-higher consumer expectations, created a burning platform for change, Allen said.
“We have to change our business as we can’t continue to operate in the same way,” she said.
Step 1: Executive buy-in
The first step for digital change is securing executive and board-wide buy-in.
“It’s only in the last 2-3 months we’ve had the whole board engaged in conversations around a digital strategy and the priority of that,” she said.
So how did Allen do it? “In the last eight to nine months, we've created that burning platform and started getting the business to work through a digital strategy and put in place a holistic transformation framework,” she said. “In some ways, we have made amazing progress in eight months.”
The change management framework Allen uses is a Cap Gemini one developed off the back of hundreds of company insights and best practices.
“What Cap Gemini identified is that companies enjoying the most profit from digital aren’t those just executing well, but those who also ensure they have top-down engagement, and that executives and board lead the change but there’s also grassroots engagement,” she said.
“Our framework deals with connecting digital to the business vision; deals with governance, which we’ve now set up with our board; deals with engagement with staff, and we’re setting up a digital literacy program across the business. Then it deals with process, people and technical capabilities needed for transformation. At the centre of it all is what your digital strategy is. All of these elements need to be in place for change to be sustainable.”
The conversation didn’t start with that framework, however, but with the ‘why’ - the business context, technological change, speed of innovation and rate of adoption, and change in consumer expectations and power.
“We brought that to life with FMCG and other sector examples, which cemented the fact that it’s happening to our own industry,” Allen said. “From there, we’ve worked with a cross-functional group from all levels of the organisation and through various workshops to work through what should be the focus of the strategy.”
Milestones to date
One of the first big ticks for Allen is establishing a governance body to spearhead digital transformation. At a board level, it includes the head of HR, head of commercial, and the CFO representing finance and IT, while at a leadership level, it includes Allen, the CIO and several supporting functions.
The purpose is to ensure business functions and IT are aligned with the digital strategy and executive team, as well as ensuring a sufficient alignment of resources.
“That was a good milestone because it gave us an opportunity to get the board engaged in a dialogue around digital,” Allen said.
“The other big milestone is that we have developed the strategy and had it agreed on by the board. Using the transformation framework and working through the key pillars, we’ve determined where the focus of our digital strategy is going to be.
“We have already established leadership capabilities at Simplot and identified digital expertise as one of those top 10,” she continued. To do this, the company has defined what each staff member is required to achieve, by level of the organisation, in terms of behaviour and performance.
“From the MD to the person on the phones, it’s about how you exhibit digital expertise,” Allen said.
“The other positive is we’ve embedded digital content into our leadership training program here. That’s around why we’re changing, what we’re changing, and examples in the business to bring this to life.”
From the MD to the person on the phones, it’s about how you exhibit digital expertise
In July, Simplot launches a digital literacy program aimed at getting all employees past the awareness phase and into action. The program will include ‘lunch-and-learn’ and workshop sessions, where external speakers and facilitators will deliver more tangible insights on digital capability, Allen said.
“There are also plans to run reverse mentoring with the board so that enables them to start leading this in a powerful way,” she said.
Restructuring marketing to match
The marketing function hasn’t been forgotten in all of this, although Allen admitted the “worlds have not converged just yet”.
What the marketing team has embarked on is an initiative to redesign the customer experience in retail. Allen believed this will form the basis of significant brand and marketing program change for Simplot. The CX initiative also sees Allen working closely with the CIO on a range of aspects internally, including organisational design.
“I think what will happen through that process is it’ll come back full circle as to how to differentiate proprietary brands. Then that will change how we operate from a marketing perspective and how we go-to-market,” she said.
“For example, we might identify a territory that all brands could use to differentiate and engage with consumers, or we might find opportunities relevant for different proprietary brands. The customer experience and how we engage with end consumers is what we are trying to solve and that, in turn, will influence future marketing plans.”
In the meantime, Simplot is endeavouring to accelerate digital marketing in a more integrated way around brand activation and go-to-market programs, Allen said.
The CMO as chief customer officer
Allen said her appointment at Simplot also sees the marketing function with an end-to-end customer engagement focus for the first time. One of the projects most progressed to date is redefining the B2B customer experience.
“We have taken a design-led approach to solving and developing solutions for that segment, and using innovative new frameworks and tools do to that,” Allen said. “We’re now at the proof stage, where we move into development and delivery and start testing things with customers in an iterative way.”
Once some proof points of influencing consumer behaviours have been achieved, Simplot will work to operationalise that initiative and embed that into the organisation, Allen said. A core aspect of this program is identifying customer pain points and opportunities Simplot can add value. Tools being used include ethnographic research and direct customer observations.
“We spend up to four hours at time in the environment, discussing, talking, looking for clues, taking pictures in their freezers and looking at how they order inventory, and bringing all that insight back and clustering that into themes,” Allen explained. “We then go through an innovative ideation process to develop solutions using stimulus from all over the world and from different sectors, to try and deliver solutions against those pain points.”
From there, it’s about co-creating with consumers and running potential solutions to try to strengthen, break and strengthen ideas again.
“Eventually, at the end of that process, out pops a variety of solutions that we think look compelling and that customers will use as well as influence their behaviour, and create that end-user loyalty we’re seeking,” Allen said. “We’ve gone through that process and now we’re deciding on which ones to build.
“Ultimately, what we’re trying to do is disrupt the way we go to market and disrupt our own thinking. We’re trying to break the shackles and ways we’ve always thought about tackling this segment, and take a new approach to innovation and create a new experience when doing that.”
Allen admitted the moment of truth is approaching but hasn’t yet arrived.
“Once we say we’re going to start building this particular solution, and this is totally unrelated to our BAU, people are going to feel uncomfortable,” she said. “But that for me says we’re doing the right thing. If it makes you comfortable, it’s probably not pushing the boundaries enough.”
Alongside fostering ideas internally, Simplot is looking at engaging with startups and third-party partners.
“Rather than always have to build these solutions ourselves, we can sometimes others to build and work out if we’d like to invest in them,” Allen commented.
Role of the CMO
Given all the change Allen is spearheading, it’s not surprising she sees the role of the CMO as one that’s undergoing significant transformation.
“Those three ‘whys’ for digital change at Simplot – the business challenge, technological environment, and then the customer expectations and shift in power – all relate back to me as an individual and to any marketing professional,” she said.
“If that’s the state of consumer expectations and technological environment, how do we as marketers shift our capabilities, knowledge and talent to be able to add business value to organisations? Really, a CMO has to understand that environment and the business context, but also what’s happening across industries.”
For Allen, all CMOs also play a role in digital transformation, as well as fostering a company culture of innovation, customer centricity, and being brave.
“It’s a leadership role ultimately, but what you’re trying to lead is changing and it’s not about traditional marketing anymore,” she added. “It’s far more reaching – it becomes more about the experience, and less about the products and services.”
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