Challenges of change
Anyone who has been involved in a change program will know the best-laid plans do not always run smoothly.
There are multiple factors at play. Too many moving parts; too many cooks, without real leadership; nostalgia for the security of the ‘old ways how things have been done around here’. All these problems and more can be barriers to success.
Our experts told of NRM projects that were diverted or derailed. Reality shows that despite the desire and intention to upgrade some or all NRM processes and leverage emerging technology, a significant shift in standard practices has not materialized.
Although projects have achieved success in various forms, obstacles included:
- Falling back on a ‘tech-first’ approach
- Misunderstanding NRM’s purpose: too much change, too soon
- Protective user community resistant to change
- The risk of losing knowledge during the process
- Uncertainty over which data is valuable
- Implementing a newly centralized strategy
Next, we expand on these issues, using the benefit of our experts’ wisdom.
Keeping it real
Linked to change project briefs that are not fit for purpose is a lack of visibility of the proposed solution. Too often, there is a rush to track down the tech without having any sort of change process in place. There is little discussion of why a new tool is needed, let alone what it should look like.
All of this causes mounting issues of a disgruntled user community who feel in the dark about new processes, whilst being distracted from their current roles. It is no wonder discord sets in, with claims the new platform is not what they wanted. Far better to bring a partner on board to design and implement NRM, and then underpin it with the right technology set-up.
The key challenge is winning the hearts and minds, how you get people to execute and believe in your plans. Revenue management happens in a customer environment, not on my computer in Reading.
Kevin Nolan
Net Revenue Manager, Bayer
NRM - What is that?
In bigger organizations, the term NRM may mean little outside the commercial department. Even commercially minded colleagues might not truly understand it.
The wider business may need to be educated about the discipline and its benefits before they can embrace a change program that touches many areas of an organization. This takes time, and trust.
Lots of companies say ‘we do promotional optimization’ but don’t know the true impact on their P&L. It is really promo management.
Rachel Young
Group Revenue Director, Nomad Foods
The NRM title does not mean much to people. It is still fairly new in many CPGs and takes time for the internal customer to think correctly about it. How will it drive value for them?
Vicente Garcia
IT Global Capability Lead Revenue Management and Trade Promotion, Kimberly-Clark
Shooting for the moon
Firms embarking on change can be guilty of over-engineering the proposed solution. This is where change management, business or digital transformation need to be viewed through different lenses.
Too much change is never a good thing and new processes can “strangle” innovation, according to one expert. In terms of an NRM upgrade, what exactly is the objective and how does that inform the tools you need for the job?
Understand what the solution can and cannot do, and accept that. One of our mistakes was trying to make it do everything.
Senior project source
Leading international drinks company
Vested interests
Some of our contributors mused their organization had not always been successful at managing multiple points of view and personalities. Just as in day-to-day operations, different team leaders will have varying objectives and perhaps understandably want to defend their patch (in a recent BDO survey1 28% of businesses cited resistance to change as a reason for projects being shelved).
Managing expectations is the hardest thing. Everyone thinks change should touch neighboring departments, not theirs. No one wants to break their own traditions.
Tatyana Kalenova
Senior Trade Marketing Operations Manager, Ferrero
Transformation conjures ‘big bang’ programs; change management should be framed as user experience. Get under the skin of people and consider how these tools can make them more productive and do their job better.
Anand Gonibeedu
India BU IBS Lead and AMEA Customer Experience Lead, Mondelēz
You can have advocates but others who say it is an admin exercise. You carefully explain the benefits but they do not want the detail. Yet they are the first to shout if their guys say we are ‘spending too much time’ internally.
Senior project source
Leading international drinks company
Death by spreadsheet
Some promotional programs have thousands of users with the majority working from Excel (or Numbers). One commentator described their firm's approach as “a cottage industry of spreadsheets”. But one person’s accountancy arsenic is another’s numerical nirvana, and that means acceptance of change will be more gradual.
Another problem is loss of legacy intelligence. New processes can destroy existing knowledge from team members whose spreadsheets may actually be a commercial mother lode. Lesson: do not throw the baby out with the bathwater. Change the system but keep vital insight on the roadmap, often from local experts and make it easy for them to complement the program with their tools in the interim.
If you have 165 countries doing the same thing 165 different ways on 165,000 spreadsheets, it is chaos. You might as well have businesses run separately.
Andy Tosney
Former Vice President of Global Sales Strategy, Mondelēz
The data deluge
Perhaps the most prevalent issue is just what to do with all the existing data. Multiple data sources that are available can bring powerful insights, however these are often in various inaccessible places, non-compatible formats, duplicated or simply outdated and incomplete. Where organizations or individuals have managed to build some initial structure around data and knowledge, the sheer volume and complexity of it can blow people’s minds. Some may feel they have just got to grips with how to stay on top of the data and what it means, and will not want to change.
We need a more commercially savvy organization to cope with the data. That adds complexity and challenges current skill sets. Keeping pace is difficult but without doing so the problems will be exacerbated.
Kevin Nolan
Net Revenue Manager, Bayer
Go to any company now and ask people to show you the plan; they will come back with Excel, Powerpoint, different things. The opportunity is to forget about all of those and just have one thing.
Vicente Garcia
IT Global Capability Lead Revenue Management and Trade Promotion, Kimberly-Clark
Little local difficulties
Although many NRM change teams set out specifically to overhaul and improve the way different markets plan, run and report on commercial activities, local traditions remain a key stumbling block. That is not limited to cultural, work or language barriers; it is also vital to understand national regulation and capabilities, for example. A suddenly centralized approach can be a shock to the system for local teams and will need careful management to ensure they join the journey. Being able to separate the central data and knowledge management design from how users engage with a system to respond to local processes and challenges is imperative to a sustainable implementation. Staying on top of top-line spend may be a key objective for one market, whereas users in more advanced markets need insights to drive retail margin through adjusting depth and frequency for the remainder of the year. The underlying data is the same, but each market will assess success and whether their individual objective has been met.
Retailer funding works differently across markets so creating cross-market analysis can be tricky. We have NRM managers in most markets, with a central team that develops the strategy and partners with our markets to implement best-in-class ways of working.
Rachel Young
Group Revenue Director, Nomad Foods
Takeaway
Given the scale, complexity and number of stakeholders involved, the quest for making a change for the better is beset with difficulties if the right approaches are not taken. That means knowing how to deal with all stakeholders and practical aspects of the commercial operation, specifically addressing leadership, the organization’s people, and not picking technology ahead of purpose.
Technology will drive ever greater insights and decision making; however, we know that the people involved with the project are the key to successful implementation. Leadership from the outset must be clear and inclusive of the scope of the NRM project, aligning targets and objectives. Failing to determine which prize to go after and how, or picking shiny tools ahead of clear objectives, will doom change projects from the word go.
While upgraded processes, complemented by technology, will be the most visible change, people will remain the most important component of the organization that determines success. Without their input at all the right stages of the design and implementation process, success will quickly flounder.
There is no single most important part to involve users in, because people will respond differently to various aspects of change. We have seen people establish many barriers to change despite the fact a new approach would be of great benefit to them. Not being clear on purpose, anxiety about changing established and trusted ways, or fear that a personally built and developed model will be replaced by a complex, mammoth process or tool are just a few of those roadblocks, irrespective of the compelling use case.
Finally, ensure that the underpinning technology enables processes as well as enhancing the organization’s capability. No matter how advanced a new strategic direction, if the effort to operate and understand it outweighs its perceived benefit, the organization will quickly move back to old ways.
With these challenges in mind, the next section underscores ways to manage and implement lasting and successful change.
The way we operate is decentralized with independent regions running their own business. The challenge is getting them all to work more closely and follow one global capability.
Vicente Garcia
IT Global Capability Lead Revenue Management and Trade Promotion, Kimberly-Clark
