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Teaching Business Acumen at CPG Companies

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Teaching Business Acumen at CPG Companies

  1. 1. Teaching Business Acumen At CPG Companies Bjorn Billhardt, CEO John Gillis, Director Business Acumen Programs Enspire Learning
  2. 2. Agenda <ul><li>Introduction </li></ul><ul><li>Challenges Facing CPG Industry </li></ul><ul><li>The Need For Business Acumen Training </li></ul><ul><li>7 Lessons Learned </li></ul><ul><li>Case Study </li></ul><ul><li>Q&A </li></ul>
  3. 3. An Introduction to Enspire <ul><li>Established in 2001 </li></ul><ul><li>Exceptional learning experiences using simulations and interactive case studies </li></ul><ul><li>Award-winning solutions for the most demanding and prestigious organizations around the world </li></ul>
  4. 4. Awards
  5. 5. Challenges facing the CPG Industry
  6. 6. Challenge: Rising Commodity Prices
  7. 7. Challenge: Proliferation of SKUs <ul><li>Crest offers 40 toothpastes </li></ul><ul><li>Gatorade makes 59 different flavors in the U.S. and 91 abroad </li></ul><ul><li>Oracle sells 628 products </li></ul>
  8. 8. Challenge: Generic Brands <ul><li>65% of consumers saying they are purchasing more generic brands as a result of the ongoing recession. </li></ul><ul><li>Harris Poll, June 14-21, 2010 among 2,227 adults (aged 18 and older). </li></ul><ul><li>9 out of 10 consumers say they feel comfortable serving private label to guests </li></ul><ul><li>72% of consumers do not believe national brands are worth the extra price </li></ul><ul><li>Price, SKU Proliferation, and the Private Label Consumer: </li></ul><ul><li>Pathways to Profitable Growth An Industry White Paper, July 2006. Daymon Worldwide, Inc. </li></ul>
  9. 9. Poll <ul><li>How does your company combat increased margin pressure? </li></ul><ul><li>Select all that apply </li></ul><ul><li>Compete on price </li></ul><ul><li>Focus on quality / unique value differentiators </li></ul><ul><li>Diversify / grow by adding categories and product lines </li></ul><ul><li>Focus on producing existing products more efficiently </li></ul><ul><li>Margin pressure does not apply to our business </li></ul>
  10. 10. The Need For Business Acumen Training
  11. 11. Leadership Development Investment <ul><li>Build competitive advantage </li></ul><ul><li>Source of non-financial rewards </li></ul><ul><li>Increasing investment in programs </li></ul>
  12. 12. Business Acumen is Critical <ul><li>Success in competitive markets </li></ul><ul><li>Abilities: </li></ul><ul><ul><li>Thinking critically </li></ul></ul><ul><ul><li>Calculating financial costs and risks </li></ul></ul><ul><ul><li>Analyzing business cases </li></ul></ul><ul><ul><li>Using data to make decisions </li></ul></ul><ul><ul><li>Numerical thinking as a predictor of potential </li></ul></ul>
  13. 13. Poll <ul><li>How do you teach business acumen today? </li></ul><ul><li>Select all that apply </li></ul><ul><li>Executive education for senior management </li></ul><ul><li>Online courses / tools </li></ul><ul><li>Business acumen integrated into generic leadership programs </li></ul><ul><li>Rigorous programs targeted at large population of managers </li></ul><ul><li>No significant investment in business acumen training </li></ul>
  14. 14. Provide Real-World Experience <ul><li>Focus on real business issues </li></ul><ul><li>1/3 of companies use computer-based sims </li></ul><ul><li>Practice in a safe environment </li></ul><ul><li>Application of lessons on the job </li></ul>
  15. 15.   Change Behavior <ul><li>Simulations are: </li></ul><ul><ul><li>Effective </li></ul></ul><ul><ul><li>Relevant </li></ul></ul><ul><ul><li>More likely to change behavior </li></ul></ul><ul><ul><li>Ability to learn from experience is an indicator of high potential </li></ul></ul>
  16. 16. Poll <ul><li>What are barriers to teaching business acumen at your company today? </li></ul><ul><li>Select all that apply </li></ul><ul><li>Lack of perceived need </li></ul><ul><li>Lack of internal resources </li></ul><ul><li>Lack of funding </li></ul><ul><li>Lack of scalable and effective options </li></ul><ul><li>No significant barriers </li></ul>
  17. 17. 7 Lessons Learned <ul><li>Common Mistakes: </li></ul><ul><li>Misunderstanding priorities </li></ul><ul><li>Focus on academic learning </li></ul><ul><li>Information overload </li></ul><ul><li>Generic training curricula </li></ul><ul><li>Outsourced design </li></ul><ul><li>Event-based experiences </li></ul><ul><li>Neglect of social aspects </li></ul>
  18. 18. Misunderstanding Priorities Objective Potential Formats Strategic alignment among senior leaders Classroom-based team experience; coaching Solve specific tasks related to financial health (working capital, forecasting, etc.) Webinar; video message from CEO; managerial directives Better decision making processes across company Comprehensive blended educational programs Grow select leaders in company High-potential programs
  19. 19. Academic Theory vs. Company Needs Academic Company Needs How to calculate Beta How to make investment decision How to solve a clean problem set How to make decisions without perfect data and information How to read complex statements How to argue for a budget
  20. 20. Information Overload vs.
  21. 21. Generic Training vs. Your Company
  22. 22. Outsourced Design vs.
  23. 23. Event-based Experience vs. Cohort-based Program Online pre-work / reference Educational sessions Online simulation games Action learning projects Coaching / mentoring Individual development plans Assessments
  24. 24. Social Interactions vs.
  25. 25. Case Study: Fortune 500 Food Company
  26. 26. Setup <ul><li>Cohorts of 30-50 participants; over 90% of director level audience reached in 2-3 years </li></ul><ul><li>Program goals: </li></ul><ul><ul><li>Understand the relationships between operational decisions and financial measures at the company and product line level </li></ul></ul><ul><ul><li>Increase financial literacy and understanding of financial statements </li></ul></ul><ul><ul><li>Develop foundational expertise in investment and ROI analysis </li></ul></ul><ul><ul><li>Relate strategy and execution at the operational and tactical level </li></ul></ul>Copyright © Enspire Learning
  27. 27. Quotes <ul><li>“ It was a good way to really ‘experience’ how business decision impacts a company’s financial statement. “ </li></ul><ul><li>“ Since I’m not in finance, this course has helped me to understand how strategies and decisions affect market cap and stock prices. We tend to get caught up in our own worlds and don’t think about the bigger picture.” </li></ul><ul><li>“ This program is the best program I have participated in to date… I bet if you polled all of those who have attended the 7 waves to date I am 100% confident you would find us each of us willing to pony up some cuts within our current environments to ensure that a program such as this could survive.” </li></ul>Copyright © Enspire Learning
  28. 28. Questions & Answers <ul><li>Have more questions? Contact us! </li></ul><ul><li>Bjorn Billhardt – [email_address] </li></ul><ul><li>John Gillis – [email_address] </li></ul>Presentation slides will be available at http://www.enspire.com/thought-leadership/webinars/teaching-business-acumen-at-cpg-companies

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