Simpactful partner John Torru has been the Top Sales leader at multiple CPG companies. In each company, he led sales and commercial organization design changes that successfully reignited sales growth while also improving cost - often an elusive balance to strike.
Torru is one of several Simpactful partners with CPG sales and commercial organization leadership and experience in successful organization design. John and the Simpactful team have improved both effectiveness (growth) and efficiency (lower costs) for our clients.
Through these programs, organizations have experienced:
- Growth rate of key brands flipped from negative to positive at top retailers at lower trade fund cost.
- Speed to market acceleration due to improving the launch process to include shopper insights and key retailer and channel requirements.
- Increased channel penetration and growth that expanded margins and revenue of targeted brands.
- Workforce productivity savings as role definitions were expanded and non-value added roles were removed.
CPG companies today are navigating through challenging waters: changing consumer preferences, emerging competitive brands, challenging retailer relationships and situations. These challenges are impacting sales growth and pressuring the balance of growth and cost within the P&L. This is a difficult balance to achieve and many organizations fail to achieve both with over-corrections in one direction at the expense of the other. Torru observes, “The push for ‘zero-based costing’ approaches have shown that when companies simply apply cost cuts in a ‘peanut butter approach’, they actually starve areas of the organization where breakthrough growth can happen”.
What are those successfully navigating the challenges doing differently? They still focus on driving out costs, but more strategically invest in key capabilities to deliver higher future returns. One of the most critical capabilities these companies have invested in is unlocking the power of the commercial team; the internal resources that have responsibility for both demand generation strategies for their brands, as well as the tools and capabilities for the sales organization to execute against those strategies with retailers. Simpactful has helped several CPGs unlock new opportunities by applying our experience in designing sales organizations, especially their HQ commercial strategy and planning teams.
Organizations are perfectly designed to get the results they achieve, however most are failing – why?
“First, they fail to truly define their commercial strategy in terms of ‘where to play and how to win’”, explains Torru. That’s the work of strategizing the product portfolio and the most effective ways to grow it across the channels and retailers with best consumer match. “The litmus test for me is asking if they made the hard choices of what NOT to do.” Torru adds that many companies change their structure and personnel yet lose sight of mapping out how the work gets done. “The ability of connecting key strategic choices to mapping out ‘how the work is to be done’ is often overlooked,” adds Torru “This is a critical step that can unlock a new organizational design that is fully integrated and reduces the amount of friction across traditional functional boundaries.”
The path to purchase continues to evolve with digital, social, and other cues driving purchase intent, but many CPG organizations are still designed with traditional functional roles. CPG companies need to ensure their central resourcing is delivering the evolving capabilities to their sales force so they can add value to their retailers, for example: who are their mutual shoppers and what tactics/tools most efficiently drive their purchase? This creates the need for new roles and capabilities around data analytics and digital marketing expertise.
Torru has helped companies identify efficiency opportunities. One example is by eliminating “silos” within a commercial center. “Work-processes are usually organized horizontally by functional roles, rather than vertically and this leads to missed hand-offs and rework as each function has a different objective,” says Torru. “There is no visibility to the full process. A better design is to create a grouping of multi-functional resources who work together in an end-to-end fashion.”
Simpactful is a consultancy with a roster deep in experience in leading and designing sales and commercial organizations. In their experience, sales growth can improve by an organization that has a clear understanding of portfolio strategy, with the right roles, tools and capability, all in work processes that are both effective and efficient. This drives higher growth AND lower costs, not a trade off from one to the other. While many CPG companies face similar problems, Simpactful provides solutions that are different and customized for each client.
For CPG companies needing to transform their sales and commercial teams to remain competitive in today’s dynamic retail environment, work with Simpactful. To learn more, contact the Simpactful team today at email@example.com or 925-234-6394.
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Meet Simpactful - a CPG/Retail consultancy firm built for today’s challenges, with a team of experienced leaders from both CPG and Retail firms.
Our experience spans functions - Sales, Marketing, Consumer Research, Human Resources, Product Supply - and all retail channels including eCommerce, Food, Drug, Mass, Club, Dollar, C Stores, and more.