Building a better future for our people, communities and the planet.
10 years ago, in our London office, a group of employees had an idea to see if we could condense a month’s worth of project work into one day and create meaningful impact for five local charities. Based on the success of this event, Prophet Impact Day was born. Over time it was scaled globally and expanded to include community service and consulting opportunities.
Over the past 10 years, we have…
Supported 270 organizations
Donated over 25,000 hours
Engaged over 4,000 employees
Last month we hosted our 10th annual Prophet Impact Day – closing our offices across the globe to work together and give back to our local communities. We supported a wide range of local community organizations like Save the Children, Clean Up Munich and Caritas of Austin. Our teams were supported things like:
Packing, sorting and distributing food and meals
Cleaning up parks, gardens and other facilities
Doing consulting work like developing value propositions and marketing strategies
Year-after-year Propheteers proclaim that Prophet Impact day is their favorite day of the year. This initiative puts all four of our values on display: create with courage, give and grow, share joy and open minds.
“So much fun! I enjoy Impact Day and giving back to the community!”
“I enjoy doing pro-bono consulting work on Impact Day because it feels like we’re adding unique value, but it’s also so satisfying to do something physical with your colleagues, and team up with folks you don’t often work with, and see the physical impact of your had work.”
Darcy Muñoz, Partner, Verbal Branding
“Truly enjoyed working with me fellow ATOers and also having my son join us in giving back.”
Ashely Burgess, Executive Assistant
“With this day, you do not only give back to community, you can also enjoy a day with your team. Isn’t that great?”
Loes van der Westerlaken, Marketing and Office Manager
“Fantastic experience! Great to connect with other Propheteers and spend some time doing good on behalf of the organization.”
Avery Gross, Group Creative Director
“The day was great and so much fun, with high levels of participation. It was great to have one location where we could do lots of activities. One of the best Impact days I’ve attended.”
Hailey Armstrong, Engagement Manager
“A very valuable and positive experience as it is a day we can actually leave the office and interact with the community. Overall, I saw solid teamwork and love from the team in this event, and it was a truly satisfying experience.”
In total, this year we supported 25 organizations, donated over 3,000 hours and made a major impact inside and out of our global offices. We believe that our expertise, creativity and support help spark meaningful change – and we can’t wait to do it again for year 11. Learn more about our Prophet Impact initiatives.
Unlock. Create. Execute: A Guide for the New World of Growth
Three Pathways and Five Strategies for Accelerating Growth
Growth is rarely easy. Based on conversations with senior business leaders across industries, we sense an increasing recognition that it has never been more difficult to generate and sustain growth. To be clear, we are talking about growth driven by customer interest and market demand, rather than the temporary variety driven by acquisition, cost takeout or organizational restructuring. The bottom line is that not even top performers can expect that continuing to do what got them to market-leading positions will deliver the next phase of growth.
Some of the common barriers – continuous cycles of tech-driven disruption, relentlessly fickle customers, talent mismatches – are well understood. However, less tangible and often overlooked factors – including lack of C-level clarity and confidence, short-term thinking and a history of unactioned strategies and plans – may be even more hostile to growth. Consider how senior leaders may lose faith in growth strategies when market opportunities shift more rapidly than the organization can pivot, refine its go-to-market approach or reallocate resources. Even when the right strategy is in place, limited ability to execute – or execute at the pace which growth now demands – may undercut returns.
Because markets move faster than ever, we believe sustainable growth results from:
Unlocking compelling customer insights to inform growth strategies
Creating relevant, impactful growth moves
Executing faster and more efficiently
How Rapid Changes in Customer Behaviors Impact Growth
The customer often has the answer. In today’s volatile markets, growth comes either through a proactive insight-led and customer-back approach, which is more sustainable, or by riding the wave of macroeconomic or societal trends. Unilever proactively changed its portfolio strategy after scoping the impact of the weight-loss drug Ozempic on consumer behavior. Modeling the likely changes in eating habits, Unilever chose to spin off most of its ice cream business, retaining only a few key brands (e.g., Ben & Jerry’s, Magnum).
During the pandemic, companies like Peloton and Calm realized unprecedented growth as consumers re-evaluated their health and wellness priorities. Both companies have failed to make strategic, post-pandemic pivots to stay relevant.
For firms that don’t want to leave growth to chance or market timing, success starts with deep insights into customer needs, as Prophet research shows.
Insights From Prophet Research
Among innovative companies, 84% have a consumer and market insights capability.
Among all companies, 37% of leaders say senior executives pay too little attention to customer needs.
In devising growth strategies, firms should factor in the impact of external macro trends on customers and the opportunities to provide new products and services to help customers navigate them. Even more broadly, executives should reflect on how these changes may influence who their customers are today and who they should be tomorrow.
Charting the right course forward requires thoughtful decisions across key growth drivers that go beyond customer insight. In other words, firms must ensure that their good ideas are converted from slideware to clear action plans supported by necessary capabilities. Among the questions to address:
Who is our target customer?
What products, services and experiences should we offer?
Why should customers care about our products, brand and purpose?
How do they perceive the value we offer?
Where and when should we engage customers – via which channels, ecosystems, platforms and partnerships?
How will we capture value?
What is the optimal operating model to deliver?
The answers to these questions have short- and long-term implications. The resulting commitments will be ones the organization can sustain for years at a time. They will also determine what firms should do next quarter. Ideally, a clear customer vision will inspire the organization for the future while attentive, dynamic management of action plans will help firms keep up with constantly shifting customer needs and preferences. Firms should plan for frequent refinements and calibrations based on continuous learning about customer behavior, market feedback and competitors’ actions. Prophet research shows that organizations that meaningfully assess and recalibrate growth plans at least monthly are twice as likely to be successful, resilient innovators. Too many firms still think of growth investments as a matter of annual planning.
What Happens When It’s All About the Short Term?
Unfortunately, immediate-term pressures – specifically that increasing revenue this quarter is always the top priority – may restrict investment in new offerings and thus narrow future horizons. According to Prophet research, 34% of business leaders say their firms overemphasize short-term results. A similar proportion, 37%, say their organization has no long-term planning process. “You’re constantly in this space of change,” one told us. “Plans are abandoned almost as soon as they are made. There’s no real plan because things just sort of happen.”
Such reactive postures are no surprise given the pace of disruption. They necessitate that firms build new capabilities even as they are running their growth plays. Those capabilities are often housed in agile, test-and-learn oriented and cross-functional teams, which have proven to be more proficient in delivering against growth objectives. Fully 80% of respondents in our global survey said design-led innovation teams are important, but only 37% said their organizations have such units in place. Developing these capabilities is not easy, of course, but they provide the foundation for self-funding innovation programs and, thus, sustainable growth.
Insights From Prophet Research
63%: organizations lacking design-led innovation teams
37%: organizations lacking a long-term planning process
2x: organizations that meaningfully assess and recalibrate their innovation moves at least monthly are twice as likely to be successful, resilient innovators
Pathways to Uncommon Growth
Strategies aligned to these pathways will manifest differently in varying contexts and sectors and they are not mutually exclusive; some firms will emphasize one, while others will experiment with portfolio approaches that include all three. Boldness and creativity can be different makers for these approaches; the bolder the growth strategy, the more likely firms will differentiate themselves in competitive markets.
1. Expanding beyond the core. In this approach, businesses narrow in on customer needs to enter a new market or customer segment, offering complementary products or services to meet a broader range of customer needs. This approach requires the least risk tolerance and least amount of change within a business. And it’s likely to produce quick wins. For example, through the height of the pandemic, companies developed products and services to reduce transmission and care for the ill. Today, companies are looking beyond point solutions and specific problems to focus on more holistic views of respiratory health. Large pharmaceuticals with separate products in testing, treatment and prevention of upper respiratory infections have reorganized their product portfolios around complete and cohesive solutions offered through retail channels.
2. Venturing into adjacent territories: This approach is about uncovering value in products, services and experiences that are closely related to existing strategies. It requires a moderate risk tolerance and degree of change as it explores efficiencies based on existing strengths and capabilities. When done right, firms find differences from the core business but still share commonalities and avoid channel conflict.
One financial services company coordinated loan refinancing through third-party aggregators. Realizing it had a unique capability to simplify fragmented lender requirements for consumers, it saw an opportunity to own more of the customer relationship. Prophet helped the company refine its value proposition, create a product roadmap and launch its first pilot into market, all while building the product, technology and marketing teams needed to sustain the effort. As a result, the company remained vital through a volatile inflation and interest rate environment, deploying its direct-to-customer capabilities to launch new services, reach new markets and grow its relevance.
3.Pursuing net new growth from innovation and emerging customer demands: This is the boldest approach, the one most associated with breakthrough innovations from true disrupters. It involves playing in novel markets or industries, creating forward-looking solutions that get ahead of emerging preferences and aspirations that have yet to fully manifest in mass consumer behaviors.
Not surprisingly, this mode of growth requires the highest level of risk tolerance, the greatest creativity and most substantial change as it pushes businesses to step out of their comfort zone to pioneer new offerings that anticipate customer needs. Companies often invest in cutting-edge technologies, enter new industries or markets undergoing disruption or create entirely new business models by bringing together an original set of capabilities.
Durable goods manufacturers – faced with acute supply chain disruptions, a long-term trend towards higher-cost, near-shore manufacturing and mixed results from interventions by smart home technology companies – might reasonably wonder whether they can successfully stand up a services model to future-proof their businesses. Spurred by Tesla, car manufacturers now consider the automobile as an updateable software platform, requiring the application of digital integration, user experience and technology expertise throughout design and production processes; they then sell subscriptions to unlock services like OnStar and Apple CarPlay. Appliance manufacturers like Samsung continue to grapple with the elusive promise of Internet-connected screens on refrigerators, washing machines and other home appliances. And manufacturers of entry and exit points, like doors and windows, can seriously consider their products’ roles in connected, smart security services.
Five Key Capabilities for Unleashing Growth
Once firms identify the right path to growth as outlined above, they must determine the best way to advance quickly, efficiently and purposefully. Too often, this step turns into a stumbling block. However, organizations that possess a few key capabilities and cultural attributes can create the capacity and build the organizational muscle memory to launch new products, devise new business models and execute other types of growth strategies repeatably. They’ll also enhance their ability to operate these new businesses efficiently and scalably. The keys to success are:
1. Using cross-functional GTM teams to achieve speed to market: When growth is everybody’s job, it may become nobody’s job. On the other hand, growth is too important to be left to small innovation labs or single functions (e.g., marketing, sales, product development). Rather, firms should build cross-functional teams charged with launching new products quickly. Even if the team is small, it should pull from finance, HR, technology, design, strategy and other parts of the organization. Why? Because all of those domains make important contributions to the development of new offerings.
2. Building a coalition of stakeholders for informed decision-making: To execute successfully, growth leaders must have a clear understanding of the critical path of decisions, identify the necessary data inputs to inform key decisions and maintain a steady pace against clearly defined milestones and gates. However, informed decision-making typically doesn’t happen fast enough, especially in large and complex organizations. Delays are especially likely when decision rights are unclear, contested politically or when a large number of stakeholders must be involved n. Ideally, growth leaders will develop a comprehensive coalition of stakeholders throughout the organization parallel with the work to ensure that everyone is on board with coming changes and understands their role in execution. Such a coalition can help ensure depth and alignment of key capabilities.
3. Making GTM innovation BAU (business as usual): Any organization seeking sustainable, customer-led growth must find ways to make the capabilities necessary for organizational reinvention, portfolio refresh and continuous learning part of business as usual. For instance, cross-functional growth teams should work within a well-defined go-to-market process, reflecting the reality that launching, operating and scaling new products and business are not “special projects” but an essential part of ongoing operations.
4. Moving at the speed of growth: Across both growth strategy formulation and go-to-market execution, speed is the name of the game. Some organizations are equipped to strategize and execute at speed, but many struggle. To make these plays work for your organization, you need to increase your organization’s speed to:
Customer insight: understanding what they want, which channels they prefer and where they’re likely to go next
Strategy: converting customer insight into strategic priorities
Market: turning strategic ideas into in-market action
Impact: accelerating the delivery of real-world results
Capability: creating the foundation to scale and sustain higher levels of performance
Speed matters because organizations can only grow as fast as their ability to adapt.
5.Getting up to speed with AI: Faced with the need to go faster, many companies are turning to AI. One media company used AI to track consumer preferences, which led to the creation of a new business model centered on interactive and original content. AI tools are helping CPGs to develop prototypes more rapidly. A hospitality leader has embedded AI in enhanced search experiences to drive discovery and rentals of vacation homes.
While these applications make sense, leaders should recognize that AI is not a silver bullet to accelerate capability development. Rather, businesses need to understand the targeted ways AI-powered customers interact differently with AI-enabled employees. From that customer-back vantage point, organizations can look to create opportunities to optimize, enhance and reinvent engagement (Be on the lookout for upcoming Prophet research that reveals how consumers really feel about and use AI.)
One More Thing: Balancing the Risks and Rewards of Growth
Strategic discussions often emphasize the external barriers preventing firms from realizing the upside. The risks of growth – and the organizational appetite or tolerance of such risks – is less frequently examined. We believe this is an oversight. Senior leaders must attend to the necessary cultural aspects of unleashing growth, including management mindsets.
While everyone automatically says they want growth, they won’t necessarily be comfortable with the risks involved in launching new products, deploying resources, modifying operations and all the other necessary steps to achieve meaningful growth. As such, leaders would do well to explore just how “growth tolerant” their firms really are. That’s especially true of today’s dynamic, “high-VUCA” (Volatility, markets. When firms face high degrees of volatility, uncertainty, complexity and ambiguity, growth demands greater organizational resilience. In other words, senior leaders that help the organization become more flexible, adaptable and agile are laying the foundation for sustainable growth.
Acknowledgments:Marc Anderson and Griffin Olmstead
How Prophet Helps
We take a collaborate and human-centered approach to help leaders unlock compelling customer and market insights; create relevant growth moves; and develop the capabilities to execute faster and more efficiently.
Growth has become even more challenging to generate and sustain driven by customer interest and market demand. Even top performers can no longer rely on their past strategies to achieve the next phase of growth. Beyond well-known barriers like tech-driven disruption and fickle customers, less tangible factors such as lack of C-level clarity and short-term thinking pose significant threats. Sustainable growth now depends on unlocking compelling customer insights, identifying impactful growth moves, and executing strategies quickly and efficiently.
Ready to accelerate your growth? Schedule a workshop with us.
AI’s Take on the State of Queer Visibility & Progress
Pride @ Prophet delves into the intersection between artificial intelligence and LGBTQIA+ advocacy.
Artificial Intelligence (AI) intersects with LGBTQIA+ advocacy in powerful ways. As we explore the landscape of queer visibility and progress, AI plays a crucial role in shaping conversations, amplifying voices and fostering understanding. However, AI faces challenges related to discrimination, as biases in algorithms can perpetuate harmful stereotypes. By addressing biases and promoting inclusivity, we can harness AI for positive change.
Recently, during a virtual event hosted by Pride @ Prophet—the firm’s LGBTQIA+ employee resource group—an internal panel of AI experts and users engaged in a thought-provoking discussion on the intersection of AI and identity.
Pride @ Prophet Panel Discussion
Every June, Pride @ Prophet hosts interactive panel-led discussions on topic areas that delve into the queer community’s intersection with workplace, culture and DEI trends. This year, our panel focused on the convergence of Artificial Intelligence (AI) and identity. Given AI’s increasing influence in the workplace and its implications for diversity, equity and inclusion (DEI), our hybrid presentation featured a live ChatGPT demonstration alongside an expert-led discussion. The event was engaging and informative for the global Prophet community.
Pride Panel 6/12/14 starting from the top left to right Ashely Burgess, Jesse Smith, Mario Mugrace, Christian Cortes
AI and Biases Around Identity
Panelists discussed the explosion of AI-driven technology emerging in the workplace in just the past year alone and its lightning speed pace in which queer identity is being extrapolated from complex data sets that are rich with knowledge but littered with biases around identity, DEI and the ongoing crusade towards equality and inclusion.
For instance, sexual orientation and gender identity are often missing or hard to measure in data because they can’t be directly observed. This absence perpetuates inequities and opens the door for algorithmic discrimination. Researchers and organizations like Queer in AI are actively addressing this issue. They anonymize data and explore ways to mitigate bias in large language models (LLMs) to ensure fair representation and avoid perpetuating stereotypes. By promoting inclusivity and cooperative AI systems, we can work toward a more equitable future.
Inherent Queerness in the AI Industry
Another topic explored was the inherent queerness within the AI industry. Influential leaders like Sam Altman openly embrace their queer identities both personally and professionally. And groundbreaking platforms such as ‘AI Comes Out of the Closet’ are shaping a uniquely queer industry within a predominantly heteronormative technology landscape.
“AI Comes Out of the Closet” is an innovative system developed by researchers at the Massachusetts Institute of Technology (MIT). It merges AI technology with LGBTQIA+ advocacy by simulating social interactions related to “coming out of the closet.” Users engage with AI-generated virtual characters, allowing them to refine their approach to LGBTQIA+ support in a safe and controlled environment.
Live Demonstration: ChatGPT & DEI
The session took an exhilarating turn as our AI experts engaged in real-time interactions with OpenAI’s ChatGPT software. Crowd-sourced word prompts were quickly transformed into three paragraphs per second of generated content. Nearly 100 Propheteers participated, dissecting the platform’s tone regarding diversity, equity and inclusion (DEI). They explored the accuracy and usefulness of the responses, as well as the platform’s limitations related to identity.
The prompts spanned from practical requests like ‘Give me 10 reasons why workplace acceptance is crucial for people who identify as queer’ to creative challenges such as ‘Compose a Shakespearean Sonnet about a queer professional coming out at work, infused with an Aussie flair.’ The platform’s captivating responses fueled even wilder crowd-sourced inputs, including cultural colloquialisms and their reflection in the generated content.
Image 1: ChatGPT Prompt and Answer
Conclusion
The session concluded with our experts and attendees sharing real-world examples of how AI has empowered their day-to-day work, particularly in the context of DEI-related initiatives at Prophet. Our global community gained valuable insights, practical tips and cautionary considerations for using these platforms, especially when discussing sensitive topics like identity, DEI and broader LGBTQIA+ advocacy.
I had a great time moderating this panel and want to thank the panelists: Jesse Smith, Mario Mugrace and Ashely Burgess.
Other exciting Pride @ Prophet programming this month includes:
Lunch & Learn: Identity & Innovation with the Co-Founders of Ringlet, a social planning technology with big ambitions to fight the loneliness epidemic.
Keynote Speaker: Queer Code and Migrant Consciousness: Crafting a New Poetics of Home with Halim Madi, a global poet whose work delves into queerness, the immigrant experience and the vivid colors evoked by plants.
Local Events: Pride Social Gatherings in Prophet’s offices in New York, San Francisco, Chicago and Austin.
Curating diverse content remains essential for increasing queer visibility. AI algorithms play a pivotal role by recommending inclusive media that ensures representation across various identities. Additionally, AI-driven moderation fosters respectful dialogue within online communities. As we continue this journey, let’s harness the power of thoughtful AI to create a more inclusive and understanding world.
Avoiding Common M&A Pitfalls: Three Key Strategies to Maximize Value
Unlock post M&A success with three simple plays: engage customer-facing leaders, craft a value narrative, and revamp talent models.
It has never been more critical to get post-M&A value creation right. With markets in a state of protracted uncertainty, businesses are more cautious about deploying capital and less patient for concrete returns. M&A activity continues in the pursuit of both revenue and margin growth, but only the most focused operators can achieve each deal’s potential on short timelines and tight budgets.
We consistently see companies leave value on the table: they fail to reach their goal for value realization, don’t reach it in time, or back away and hedge due to a lack of confidence in the investment thesis. In the end, closing these gaps falls to the business leaders tasked with running the post-deal entity. Here are three key strategies to close those gaps.
Conversations with business leaders involved in post-M&A activities revealed three crucial yet often overlooked factors—referred to as executional gaps—that executives must address to successfully achieve the value of the deal.
Leaving customer-facing leaders out of the loop
Deals with no value story
Rigid talent models that erode people value (talent and culture)
Gap 1: Leaving Customer-Facing Leaders Out of the Loop
For practical and legal reasons, deal teams typically operate with secrecy. This leads to scrambling across the organization when a deal nears announcement. Marketing, communications, and talent teams often become disconnected, resulting in lackluster strategies. This inefficiency puts a time lag on customer-facing decisions and can result in the wrong decisions being made. Brand changes, go-to-market portfolio construction, talent integration plans, and other high-level decisions end up being led by an isolated deal team rather than in partnership with the organization’s functional experts.
One M&A leader at a large healthcare company said: “Customer value isn’t realized until much later on because it isn’t planned for. [You are already] considering customer [downside risk] in the deal valuation, [why can’t the upside potential] be considered and planned for as well?”
Recommendation: It’s unnecessary to complicate the M&A process by adding members to the team during due diligence. Instead, build a new step or action within the playbook to pulse out information from the core deal team directly to operating teams when moving toward close. This will help line leaders immerse themselves in the deal thesis and adopt accountability earlier in the process.
Gap 2: Deals With No Value Story
Just because deal teams and capital committees understand the value creation thesis; it doesn’t mean that the deal has a value story. Ultimately every audience affected by the deal will need to know how this deal is adding value for them. Yet, internal and external stakeholders often receive very different versions of the story, if they hear anything at all. These fragmented stories don’t always connect, functioning like “point solutions” that speak to the short-term implications for a specific team, rather than amplifying the impact of the deal through a consistent, cohesive narrative that flexes across audiences and still ties back to a single core idea.
One M&A leader underscored that “the deal story aligns the organization, and it gives them the fuel to change, doing the hard work to realize the value at the core of the deal premise.” This reflects what we’ve seen in market with acquisitions like Danaher’s acquisition of GE Lifesciences. Danaher had a unified plan and story for the acquisition, clearly creating a cohesive message that flows through each key audience. Danaher understood how the entire GE asset – from technology and product portfolio to customer relationships and brand equity – would combine into a powerful new life sciences operating company well before the deal’s close. That plan was then echoed to leaders across the company and into the marketplace. In the end, that cohesive story powered a new operating company, Cytiva, which was central to Danaher’s 110% share performance in the two years following the close of the deal.
Recommendation: Identify an expert, usually from the marketing, brand or communications team, to develop a story of value with the help of a cross-functional team communicating to different audiences. Marketing might personalize the core story for customers while investor relations might develop messaging aligned to what investors are looking for. The communications team might tweak the message for partners and Human Resources might build a North Star narrative for employees. While each message might be slightly customized for the intended audience, each must ladder up to an overarching message to drive alignment and spark value creation.
Gap 3: Rigid Talent Models That Erode People Value (Talent and Culture)
While it’s critical to capture value by addressing internal synergies post-close, it’s also important to de-risk the integration plan by recognizing the unique cultural and talent contributions the acquired team brings. The asset likely carries new capabilities, usually with hard-to-hire skill sets which must be thoughtfully redeployed in the post-close entity. Moreover, if it was a successful operation before being acquired, it would have been fueled by a unique culture that needs to be acknowledged, and potentially leveraged as a touchstone for renewal or transformation.
Several M&A leaders echoed this perspective saying, “If the primary driver of value is something tangible, the culture is overlooked because it is hard to value,” “If you force rigidity on a company, that drives culture mismatch, and it skips over the secondary value question of if the talent and culture could improve your own,” and “If you say ‘hey we love your asset,’ you need to consider the culture and people that created that asset, or you have blinders to the full value of it.” They also spoke to the importance of HR leaning in, as their insights can be critical to understanding what employment shifts will resonate within a company.
Recommendation: Build an employee ignition module into the playbook to build a human-centric strategy for retaining and activating the talent and cultural assets acquired in the deal.
Tech companies have adopted this approach; recognizing the significant value of the talent assets they are acquiring. Apple maintains an acquisition pipeline primarily looking for top talent from the acquired business or redeploy throughout their earn-out tenure. Apple views the acquired talent as a flexible, scalable asset to be used to drive growth well beyond the specific team or company in which they entered the firm. This flexibility not only lowers talent acquisition costs but also serves as a new “Talent Model” lever for value creation, speeding up value realization by applying the strongest talent to the most critical tasks.
These gaps slow value capture and erode M&A returns. However, in our work with corporate development and business leaders, we have seen teams apply these three plays to close these gaps and improve deal performance.
Instead of leaving customer-facing leaders out of the loop, build a step in the playbook that pulses information to critical post-close operational leaders.
Instead of running diligence and integration without a clear narrative, write a story of value that focuses teams on strategic intent and execution priorities.
Instead of rigid talent models that erode people value, build an employee ignition module into your playbook that scales new capabilities, preserves key talent and leverages cultural capital.
If you want to get the most out of your M&A deals, we’re here to help you unlock success.
Ready to build your Story of Value? Schedule a workshop with us.
Brand & Demand: Building a Data-Driven Modern Marketing Organization
Kate Price, Partner at Prophet speaks with Caroline Chulick, Head of U.S. Marketing at Hill’s Pet Nutrition about how to drive more return on investment (ROI) with your marketing.
Caroline Chulick is the Head of U.S. Marketing at Hill’s Pet Nutrition, a subsidiary of Colgate-Palmolive, where she leads brand strategy, media, data & analytics, integrated commerce and public relations for a premium pet food business.
Kate Price: Given the increased focus on accountability and ROI in marketing, how has your experience been, and what shifts have you observed in your approach to demonstrate impact?
Caroline Chulick: In my 20 years at Colgate-Palmolive, there has been a consistent strategic focus and commitment to driving ROI and measurement. However, recently there has been a noticeable shift in expectations and the way we approach demonstrating impact. With increased investment in brand building, there is greater rigor in tracking where these investments go. The key lies in aligning investments, tactics, and the entire funnel with well-defined business goals in the planning phase. The C-suite places trust in the marketing team to deliver results, but there is certainly a heightened expectation for faster feedback cycles. The cadence for presenting outcomes has increased, particularly in short-term, behavior-driven data, requiring a faster test-learn-pivot cycle. For marketing to be successful, educating senior leaders on evolving marketing approaches and technologies is a crucial aspect. There’s a general acceptance around continuous learning and our leaders understand that the traditional approaches may not be effective in the current landscape. And, we’ve found that they are always excited to learn more.
KP: Within your organization, how has cross-functional collaboration evolved, especially in terms of partnering with other internal business units?
CC: In the realm of CPG marketing, cross-functional collaboration has always been fundamental. However, the transformation lies in how this collaboration has evolved, particularly in the past three years. The game-changer is the increasing maturity of data within the organization. While traditional collaboration involved departments such as supply chain, sales, finance and legal, the difference now is the profound impact of data across every facet of the organization. Data-driven partnerships have become the norm, influencing how we go to market in areas like warehousing, frontline sales and end-user interactions.
As an example, we initiated a data partnership for media purposes, which unexpectedly transformed how we approached veterinary clinics in our sales strategy. The newfound data visibility allowed us to discern critical differences between two seemingly similar clinics. Through our data, we discovered that Clinic A was loyal to our brand and distinct from Clinic B, which was also ordered just as much from a competitor. This revelation reshaped how we engaged with each clinic, providing tailored conversations and sales strategies. The availability of this data has revolutionized not only how we approach the market, but also how we tier and equip our salesforce for more effective interactions.
These evolving dynamics in B2B marketing showcase the potential for leveraging data to achieve precise, personalized interactions akin to the one-to-one marketing approach in the consumer space.
KP: We published a report called Brand and Demand: A Love Story which talks about the tension between the two functions. How do you balance your brand and demand marketing investments?
CC: The dynamic between brand and demand is a nuanced one for us. Brand, which has traditionally been associated with long-term equity building, now intertwines with demand, which is focused on short-term actions. For us, the two are interlinked, and we’ve observed that our short-term (ROI) for brand building is as impactful, if not more, than it is for product-specific initiatives. Our data-driven approach allows us to find a unique balance, where we test and optimize the mix to align with our brand’s specific strengths and audience penetration. For us, it’s the strategic fusion of both that typically yield the best outcomes.
An important component for creating an optimal balance is our team dynamics. Physical collaboration spaces and a culture of curiosity and continuous learning have been key in breaking down silos and fostering cross-functional collaboration. Our team operates with a shared understanding that we’re not just building a product; we’re crafting a brand, a lifestyle, and a connection with our audience. This distinction motivates our team, aligning their efforts to build equity and deliver a meaningful brand experience. The nature of our category, focused on pets and families, adds a layer of emotional engagement, creating a sense of purpose for our team.
We’ve also shifted our key performance indicators (KPIs) to encourage collaborative achievements, reinforcing that synergies between different strengths and focuses lead to more impactful outcomes. My role as a leader involves connecting these dots, facilitating collaboration and removing any barriers the teams encounter.
KP: In the report, we found four common principles of brand and demand: anchoring marketing investment in business objectives, experimentation, building a modern marketing organization and putting the customer at the center. Do you agree with these and how do you apply these to your organization?
CC: I do agree with these principles. Anchoring our marketing investment in business objectives is a fundamental principle that we actively embrace. Each year, we set ambitious goals, some with a short-term focus and others with a strategic, three-to-five-year horizon. The key lies in translating these objectives into actionable plans through what we call a brand growth plan. This plan serves as our roadmap, and KPIs are the compass guiding our progress. The process involves a continuous cycle of testing, learning, and pivoting, ensuring we stay agile and effective in achieving our business objectives.
As it relates toexperimentation, it is not just encouraged. but ingrained in our culture. I recall a valuable lesson several years ago from an executive leader and mentor that came while I was working on a new direct-to-consumer project. He actually urged me to fail! The rationale was clear: if we’re not failing, we’re not pushing the company beyond its comfort zone. Failure isn’t a setback; it’s a sign that we’re challenging the status quo. Experimentation, accompanied by a willingness to fail, is vital for growth and innovation.
Building a modern marketing organization requires a dynamic approach. In my three years in the current role, I’ve repeatedly recognized the need to adapt our organizational structure. The pace of change and growth demands a constant pulse on the people, structure, tools, and resources within the organization.
Being customer-centric is not just a philosophy; it’s a way of life in our organization. Every initiative, product, or experience starts with a customer insight or a pain point that needs addressing. The commitment is to solve problems or make lives easier, ensuring that each effort is purpose-driven.
KP: What excites you about the market in the next couple of years, and how are you preparing your organization for upcoming shifts?
CC: What excites me most about the future are strategic partnerships and a focus on audience-first planning. We are actively seeking unconventional partnerships across the pet space, expanding our role from a nutrition company to a comprehensive pet health solution. Additionally, the shift to audience-first planning is a key evolution in strategy. This approach, which is rooted in understanding and addressing audience needs, goes beyond traditional campaign planning. The challenge lies in balancing the emotional and product-centered needs, ensuring that personalized, audience-centric strategies coexist harmoniously. The exploration of these new frontiers aligns nicely with our commitment to continuous innovation and adaptation to evolving market dynamics.
In the evolving landscape of marketing in a data-driven era, Caroline emphasizes the importance of aligning investments with business goals and fostering cross-functional collaboration fueled by data insights. While different industries have nuanced approaches to brand and demand marketing, she emphasizes the need for a strategic balance between short-term actions and long-term brand building. As we hear from Caroline and other marketing leaders, these continue to be reoccurring themes of driving marketing effectiveness in today’s ecosystem.
Ready to integrate your brand and demand teams? Schedule a workshop with us.
Brand and Demand: Driving Business Results in the Golden Age of Marketing Effectiveness
Kate Price, Partner at Prophet speaks with Colin Westcott-Pitt, Global Chief Brand Officer at Glanbia Performance Nutrition on how to link marketing initiatives to broader organizational goals.
Colin Westcott-Pitt is the Global Chief Brand Officer at Glanbia Performance Nutrition where he is responsible for the development and oversight of their brand portfolio.
Kate Price: Given the disruption of the last few years, marketers are being asked to take on greater accountability and demonstrate the impact and ROI of their marketing investment while creating tighter alignment with overall business objectives. How have you shifted your strategy in response to these challenges?
Colin Westcott-Pitt: Certainly, the disruption in recent years has been a significant factor in reshaping our marketing priorities. Although, I’ve never viewed business outcomes in conflict with marketing outcomes. In fact, we’ve always operated with the mindset that one leads to another. At a brand’s core, it comes down to revenue and margin objectives. While there might be instances where marketers are overly focused on awareness or perception, in the current landscape it’s essential to strike a balance and recognize that marketing plays a crucial role in driving revenue and overall business success.
To address the disruption, we’ve adopted a balanced scorecard approach to measure impact and ROI. This involves incorporating both short-term and medium to long-term measures. Recognizing the importance of a balanced strategy, we understand that there is no long-term without the short-term.
We’ve taken a hard look at the role of data and how to apply it effectively has become essential for identifying growth opportunities, ensuring a balance between existing and new consumers, and ultimately driving strategic decision-making. The challenge lies in ensuring that the organization, at all levels, is fluent in interpreting and applying this data effectively. It’s crucial for the insights and analytics group to simplify complex data for broader understanding.
KP: How have conversations with your C-suite evolved in light of recent disruptions and how has that impacted the role of brand at your organization?
CWP: Our conversations have changed significantly. Our leadership team is increasingly engaged and curious about the changing landscape. They increasingly understand the shifting dynamics and ask more of marketing. They often begin with business objectives, emphasizing the importance of linking marketing initiatives to broader organizational goals.
However, while marketing has undoubtedly become more data-driven and shifted towards performance metrics, the role of storytelling cannot be overlooked. We strive to find a unifying principle that everyone can align with, and that principle is often the brand. We reject the notion of silos where marketing is solely responsible for the brand. Instead, we emphasize that everyone plays a crucial role in shaping the brand experience. This approach helps break down barriers and encourages collaboration. We recognize the importance of each function, whether it’s marketing, manufacturing, or sales, in contributing to the overall success of the brand. Small initiatives, like rewarding employees with branded merchandise, can foster a sense of unity and shared purpose.
Challenges arise when the brand is not perceived as fundamental. In functions such as finance or manufacturing, for example, it is a key task of marketing to help these teams understand the role of brand across these various departments. To do this, it requires a meaningful effort to communicate that everyone contributes to the success of the brand and, by extension, the business. It’s about instilling a sense of appreciation for the unique role each function plays in achieving overall success. We come back to the phrase “everyone has a unique contribution to success” which reinforces the idea that each person, regardless of their role or function, is integral to the overall success of the brand and the business. It doesn’t always have to be a big initiative. We hit a major milestone in our business this year and handed out t-shirts to all of our teams, which was a relatively small thing, but from an internal employee engagement, it made everybody feel like part of the story. The small things can sometimes go a long way.
KP: How do you navigate the tensions between brand and demand, especially in the context of demand marketing and short-term performance?
CWP: I think the key is to avoid viewing brand and demand as an either-or situation but rather embrace the idea of “both-ism,”. Balancing brand and demand is crucial, it really requires a disciplined brand planning process. Our process involves a systematic approach that aligns brand strategy with demand opportunities, setting clear objectives that include pricing strategies, promotions, and channel roles.
To deliver against this “both-ism” approach, balancing the long and short term, the key is starting with a comprehensive situation assessment and aligning brand strategy with demand opportunities. From there, the brand planning process sets clear objectives, including pricing strategies, promotions, and channel roles. It’s crucial to recognize consumer moments (e.g., New Year’s Resolutions) that matter and retailer moments that matter (e.g., Amazon Prime Day). Success really requires a systematic and collaborative planning approach that considers each function’s unique role at different moments in time.
We are also relentless in our measurement. Goals are tracked through a strategic performance pyramid that encompasses business objectives like household penetration, market share, and consumption. The pyramid narrows down to more specific metrics like website visits, search levels, and media reach. This provides a clear structure for tracking leading and lagging indicators at both strategic and tactical levels, ensuring the brand’s performance is measured comprehensively and preventing over-reliance on a few seductive metrics.
KP: In our report, “Brand and Demand: A Love Story” we outline for common principles of brand and demand: anchoring marketing investment in business objectives, experimentation, building a modern marketing organization and putting the customer at the center. Do you agree with these and how do you apply these to your organization?
CWP: Absolutely, I think these all apply. I’d say recently we’ve especially shifted towards more enthusiasm and passion for experimentation, fostering an environment without fear of failure. As we put a greater emphasis on experimentation, we’ve been able to encourage a culture of trying new things quickly, building curiosity and being data-driven. Our approach to agile learning is facilitated by having specialists delve into emerging areas, utilizing social listening and even experimenting with artificial intelligence.
I also think we are living in the golden age of effectiveness. Building a modern marketing organization involves understanding contemporary principles and building off models like Ehrenberg Bass. Distinctive assets, a key aspect of discussions, have become more formalized and structured. Our conversations around consumer-centricity have evolved, emphasizing real-time insights and quick feedback mechanisms. We put a greater emphasis on tapping into consumer behavior through super consumer groups and communities, ensuring a continuous effort to stay agile and adapt to changing consumer dynamics. We have a small group of consumers that we tap into on a regular basis for quick feedback. Everything is changing really fast, so having the ability to tap into real-time insights allows us to stay on top of new consumer trends.
KP: Last but not least, what keeps you excited about marketing?
CWP: There are a couple of things that I’m particularly excited about. The first is this shift towards being measured against business outcomes. If this is the golden age of marketing effectiveness, and when we’re doing a good job, then our business results should reflect that. Witnessing the tangible results of effective marketing is exhilarating. On the consumer side, the joy lies in working with brands that can make a positive impact on people’s lives. Whether it’s contributing to a healthy lifestyle, performance improvement, or weight management, seeing the positive change in consumers’ lives is truly fulfilling. The happiness and satisfaction of consumers after using the product, like completing a marathon with a smile, adds to the overall excitement.
Taking a disciplined approach to brand and demand – and building processes to address both functions is crucial for delivering marketing effectiveness. As Colin discussed, more and more, executive teams and boards are asking marketing leaders to prove their ability to influence revenue generation. And to do this, marketers need an integrated strategy to both brand and demand marketing.
Ready to integrate your brand and demand teams? Schedule a workshop with us.
The Yin and Yang of Marketing: Navigating Brand and Demand in Asia
How can brands harmonize brand marketing and demand generation for sustainable growth?
In the bustling markets of Asia, where tradition dances with innovation, the battle between brand marketing and demand generation rages on. As companies vie for attention and market share, they grapple with a fundamental question: Which path leads to sustainable growth?
Brand Marketing: The Art of Storytelling
Brand marketing is the soul of a company – the narrative that weaves through its DNA. It’s the symphony of colors, fonts, and emotions that evoke recognition and loyalty.
In Asia, brand marketing transcends mere aesthetics; it encapsulates cultural intricacies. It is about preserving heritage while embracing the future. It is the delicate brushstroke that paints cultural nuances, the scent of incense in a bustling marketplace, and the whispered promise of authenticity. Imagine your brand as a tea ceremony – an intricate choreography of leaves, water, and time. Each cup tells a story, and every sip carries centuries of tradition. Moreover, Asia’s consumers crave authenticity. They seek brands that honor their roots while embracing modernity. Your brand is not just a design; but a bridge between generations.
Take MUJIfor example, the iconic home goods retailer, whose “no-brand” philosophy echoes Japan’s minimalist aesthetic and lifestyle. Their products design and eco-friendly practices embody simplicity, functionality, and sustainability. Similarly, up and coming fragrance brand To Summer artfully marries traditional Chinese scents with contemporary sensibilities, symbolizing a bridge between legacy and innovation. At the core of its product designs, To Summer is committed to restoring Eastern botanical scents, while incorporating modern elements in its packaging and retail experiences.
Demand Generation: The Science of Conversion
Demand generation, on the other hand, is the alchemist’s potion – data-driven marketing that turns curiosity into action. It’s the digital bazaar where clicks become conversions.
In Asia, it is the neon glow of a night market, the haggling over prices, and the thrill of discovery. Picture your demand generation as a street food stall with the inviting sizzle of skewers and aroma of spices. For Asian consumers, demand generation is synonymous with urgency, akin to a street vendor’s cry of “Limited stock, last chance!”
Luckin Coffee’s rise in China exemplifies this urgency, capturing consumers’ attention through exciting product launches and brand partnership campaigns. This allowed them to seize the China market with break-neck speed, swiftly surpassing industry giant Starbucks last June. In 2023, Luckin Coffee launched 102 new products, including one Baijiu-infused coffee in collaboration with China’s esteemed liquor brand Maotai.
The Dance of Growth
Harmonize the Yin and Yang
Successful growth in Asia requires a harmonious blend of brand marketing and demand generation. They are not rivals but rather synergistic dance partners, with brand storytelling setting the stage while demand generation fills the seats. The key lies in regularly fine-tuning your brand-to-demand ratios based on the goals of your brand, the product/campaign and audience response. Brand and demand teams also need to commit to open communication and engagement to achieve an integrated decision-making process.
In the past two years, Prophet has interviewed brand and demand marketing leaders across the world to understand how these functions can be brought together to drive greater impact. Our research found that the majority (60%) of marketers have a ‘balanced approach’ to Brand and Demand. It’s the orchestration of both channels that often defines their effectiveness. (Download our global report here.)
A great example of how balancing brand and demand can drive uncommon growth is Lululemon. Consumers in Asia are increasingly health-conscious, yearning for meaningful experiences with physical and mental wellbeing. Capturing these unmet needs, Lululemon markets a healthy lifestyle by placing a great emphasis on building confidence and empowering people through innovative products and positive experiences. By focusing on its core values, Lululemon creates a brand that resonates with its audience. On the other hand, Lululemon focuses on creating a deep connection with its customers through community building on top of brick-and-mortar and e-commerce expansion in Asia. This creates a sense of scarcity while urging customers to join its events. It also allows Lululemon to listen more closely to what the local customers need (e.g. launching Asia Fit line). This strategy helps Lululemon to continuously drive demand, loyalty and advocacy.
Localizing the Choreography
Asia isn’t a monolith; it’s a mosaic. Brands must adapt their moves to each cultural tile. While it is important to adhere to consistent brand essence and offerings across all global markets, local cultural nuances must be considered when developing a go-to-market strategy for each Asian region. From Japan’s deep bows to India’s respectful nods, cultural sensitivity is paramount in crafting a bespoke go-to-market strategy tailored to each locale. Localization isn’t a checkbox; it’s a pas de deux with the fast-evolving tradition, subcultures and behaviors of the diverse region.
For example, UGG sought to enhance its relevance and engage Gen-Z consumers globally in a compelling and authentic manner. Partnering with Prophet, UGG embarked on a comprehensive segmentation research, delving into multiple APAC countries to craft tailored consumer journey maps that accounted for regional nuances and cultural intricacies.
Similarly, Prophet’s collaboration with The North Face yielded a unique positioning and localized customer experience for its loyalty program in Greater China. The brand hoped to expand on the types of benefits provided by the program beyond monetary rewards, ensuring representation of the organization’s brand DNA while elevating consumer perceptions, building greater engagement and further differentiating itself from competitors.
Orchestrating Moments
In Asia, cultural festivities serve as pivotal crescendos for brand narratives. From Chinese New Year’s jubilant fireworks to Diwali’s vibrant rangolis, brands must choreograph their presence amidst these cultural symphonies.
Singtel, a Singaporean telecommunications conglomerate, has made a tradition of releasing heartwarming short films for Chinese New Year. These films celebrate the power of technology in connecting families and friends. For instance, their 2023 film, “Don’t Worry, Be Hoppy!” showcases the role the telco plays in bringing families and friends together. Continuing the tradition, Singtel launched a three-minute film titled “A Date With Spring” in 2024 which is a nod to the power of technology to inspire and empower all generations. Singtel’s previous Chinese New Year’s series since 2020 collectively garnered over 50 million views to date as their commitment to storytelling resonated strongly with viewers. Furthermore, Singtel recognizes National Day, one of Singapore’s most significant holidays, by creating annual tributes. Last year in 2023, Singtel released a powerful documentary “From Mudflats to Smart Nation”. This 23-minute film explores Singapore’s remarkable journey of innovation and pivotal role of technology in shaping the country into a smart nation.
Amidst the flickering neon signs and fragrant incense of Asian markets, growth is a harmonious interplay between brand magic and demand science. Marketers are urged to embrace this fusion, letting Asia’s vibrant rhythm propel you towards prosperity.
Ready to integrate your brand and demand teams? Schedule a workshop with us.
Nation Branding Beyond Tourism: Key Accelerator to a Country’s Uncommon Growth
Learn how countries can take a long-term and deliberate approach to bring success to nation brand building.
Recently nation branding has been in the spotlight, with countries like Singapore and Saudi Arabia leveraging soft power to elevate their nation’s brand, with varying levels of success.
Taylor Swift played six sold-out shows in Singapore as part of her Eras Tour. Not only is Singapore estimated to generate $370 million USD in revenue from the shows, it has successfully put itself on the world map, courtesy of videos of Swift’s backup dancer shouting out Singlish phrases on stage, and Swift’s boyfriend – NFL Super Bowl champion Travis Kelce – talking about Singapore’s sights and food on his podcast.
Saudi Arabia hosted the much-anticipated boxing match between Anthony Joshua and Francis Ngannou and will host another blockbuster between Tyson Fury and Oleksandr Usyk to crown the first undisputed heavyweight champion since 2000. Beyond boxing, Saudi Arabia’s Public Investment Fund (PIF) caused shockwaves when it launched LIV Golf, a men’s professional golf tour to rival the well-established PGA Tour in 2022 and lured many of the best men’s golfers. These lucrative events are part of Saudi Arabia’s efforts to realize Vision 2030, to be a vibrant society, a thriving economy, and an ambitious nation.
Nation Branding Goes Beyond Tourism
Just like consumer goods, nations can be branded and marketed to audiences. Brands are a critical driver of growth. And nations, like any business, need to be constantly building, nurturing, and refining their brands, or risk losing relevance and competitiveness.
What often comes to mind when it comes to a nation’s branding is its tourism campaigns. Think “Malaysia, Truly Asia”, “Amazing Thailand, Always Amazes You”, orAustralia’s “Come and Say G’Day”.
But nation branding goes beyond a tourism campaign or slogan. When done right, it is a long-term and holistic masterplan across key economic sectors, infrastructure, talent, education and culture.
In an increasingly fractured and uncertain world where the flow of capital, talent and commerce is being re-cast, it has never been more important for nations to get their branding right and take control of how they are perceived by locals, tourists, investors and partners.
Take two countries in different regions demonstrating the success of a long-term and clear plan in their nation branding – Estonia and Singapore.
Estonia: A Connected Society
Since resuming independence in 1991, Estonia developed a clear ambition to be a digital society. Investing heavily in digital infrastructure, it has become the first e-State with the e-Estonia program, where 99% of public services are digitally managed and available online, ranging from taxes, parking, prescriptions, voting and more.
To facilitate its status as a successful technological start-up hub, Estonia introduced a range of initiatives to attract skilled talent. It simplified the immigration processes for foreign talent hired (e.g. exemptions from immigration quota for non-EU nationals), offers startup and digital nomad visas, and offers services by Work in Estonia program (e.g. free international recruitment consultation over Skype) to ensure hiring and providing work for foreign talent is as simple as possible for businesses.
Singapore launched its “Passion Made Possible” brand in 2017, indicating a shift from being an investment-driven economy to one led by innovation. Through targeted investments, it has established itself as a leading regional hub in high-growth areas such as financial services, technology, digital and sustainability. To boost its pool of tech talent with a special focus on Artificial Intelligence (AI), Infocomm Media Development Authority (IMDA) is collaborating with other governmental partners including SkillsFuture Singapore and private sector associations such as SGTech and Singapore Computer Society, to help companies equip their employees with AI skills. IMDA also launched a $22.4 million USD fund in 2022 to support researchers in developing new innovative green computing solutions.
As a regional hub of innovation, Singapore boasts 25 unicorns (the highest in the region) and accounts for 56% of total venture capital deal volume across the six largest Southeast Asian economies in 2022.
A Nation’s Brand Must Be a Reflection of Its People’s Identity
While it is important to develop a long-term vision and master plan, a nation’s brand cannot be created in isolation. It must reflect the identity of its people, culture, heritage and history.
In addition to its investment in high-growth areas such as technology and sustainability, Singapore has made sure that its brand reflects its culture and heritage. It launched the Made with Passion initiative in 2020 to give local lifestyle brands greater access to local and international audiences with innovative new experiences. These experiences, such as creating Peranakan-inspired coasters, are one method by which Singapore celebrates its rich multicultural heritage. Food is also key to Singapore’s brand. As an Indian newspaper described it, “If eating was a national sport, Singaporeans would ace it”. Singapore’s brand as a culinary destination is evident in both the prestigious cuisine (e.g. hosting two editions of Asia’s 50 Best Bars awards, boasting 55 restaurants with a Michelin star), and the local fare found in hawker centers.
New Zealand is another example of nation branding that is true to its people and culture. Known for its unspoiled nature and greenery, cleanliness, high standards of living, and robust governance, New Zealand is a brand associated with trustworthiness, honesty, transparency, and passion for protecting its land. This guardianship of the land and its people reflects indigenous Māori culture and values.
A Nation’s Brand Starts With a Purpose
As a first step, nations that are considering a re-brand need to define and clearly articulate their ambition. This serves as their North Star and guides their decision-making around what their core beliefs are, what benefits they wish to deliver to their people, and what key areas they want to focus on.
While it can be difficult to develop a nation’s brand, taking a long-term and deliberate approach pays off. Nations need to follow a process, be targeted and deliberate in their investments for the brand to deliver meaningful impact to the nation and their people. We have already seen countries such as Saudi Arabia, Singapore, South Korea, Estonia, and New Zealand reap the benefits of building a brand that is holistic, cohesive, long-term and true of its people, culture, and heritage.
Two Ways to Operationalize Your Portfolio Strategy for Market Growth
In this article, we provide actionable recommendations of how the demand-to-growth landscape can be operationalized for driving tangible growth.
As competition intensifies and consumers grow increasingly fragmented, brands today must find ways to identify a precise pathway for growth. A successful growth strategy relies on a meticulously crafted portfolio strategy that acknowledges growth sources from layered perspectives. It shouldn’t merely react to present market dynamics but also anticipate future shifts in demand.
To accomplish this, it’s critical to construct the demand-to-growth landscape, which serves as a pivotal initial step for companies to reach their growth ambitions.
Define the Portfolio Strategy with a Demand-to-Growth Landscape
In a previous article, we introduced the demand-to-growth landscape (hereinafter referred to as demand landscape), a systematic study that decodes category opportunities, and how it is best used to shape portfolio strategy, inform brand positioning and refine product portfolio.
Operationalize the Portfolio Strategy to Accelerate Growth
After developing a robust portfolio strategy using the demand landscape, leaders must then pinpoint the strategic anchor points within their categories for execution. Bill Gates once aptly stated, “The most brilliant strategy won’t lead to success unless it’s executed effectively.” This rings especially true in today’s business landscape, where marketers are required to show measurable results with every investment.
Depending on the business and industry, the best way to operationalize and execute the portfolio strategy might look different. Here, we highlight two key applications:
Application 1: Managing Consumer Segments Through the CRM
The approach below offers an effective solution to companies aiming to utilize CRM effectively to manage strategic consumer segments from end to end.
Leveraging the CRM: For companies heavily involved in digital and direct-to-consumer (DTC) channels, particularly in the apparel and beauty sectors where customer loyalty and retention plays a vital role, the CRM system is an indispensable tool. However, marketers often struggle with the vast amount of unorganized customer data, unable to capitalize on the valuable assets to drive meaningful engagements. Incorporating the portfolio strategy could offer a unique solution.
Evaluating the Portfolio Strategy: A portfolio strategy enabled by the demand landscape analysis unveils how different brands under a business portfolio should capture different consumer segments. It’s crucial to strengthen the value exchange between these brands and their designated consumer segments, in order to guide consumers toward purchasing the brands and products designed for them. Throughout this process, brands must take an agile and iterative approach to ensure investments yield the desired outcomes by establishing effective methods for measuring progress and learning from efforts. But how?
This is where the CRM system and the portfolio strategy come together. To effectively achieve the aforementioned goals, it is imperative to map the strategic consumer segments of the demand landscape against existing CRM data, i.e., tagging each individual consumer with the corresponding segment.
Once each customer profile is categorized into its respective strategic consumer segment, brands are able to monitor segment growth by analyzing CRM data, thus indicating the effectiveness of the portfolio strategy and its execution.
Advanced organizations may also synchronize digital and e-commerce efforts to customize product recommendations and content marketing to each customer based on the portfolio strategy (i.e., brand, product, and proposition relevant to each individual), thus accelerating strategy execution.
Approach 2: Landing Portfolio Strategy at Retail Channels Through OBPPC
This approach is particularly critical for companies in the consumer packaged goods (CPG) sector, where navigating diverse consumer needs and a complex retail environment is paramount. With the demand landscape approach, companies can formulate a portfolio strategy aimed at capturing distinct consumer segments and consumption occasions. However, they must also differentiate themselves at the moment of truth to meet the unique preferences of diverse shoppers within each channel.
Hence, there is an opportunity to bridge the demand landscape and the Occasion Brand Price Pack Channel (OBPPC) models. The OBPPC framework was initially introduced by Coca-Cola to enhance on-channel execution. In essence, this model ensures that companies cater to varying shopper needs by offering the appropriate brands, packages, and price points within target channels. By providing a tailored assortment, more consumers can find satisfaction, and the company can strategically shift the demand curve for those who are less price-sensitive.
All shoppers are different. They have different values and different preferences which lead to different price elasticities. We can create value by recognizing the differences in purchase occasions, and by offering a unique assortment of brands, packages and price points for each channel they are served by.
The Coca-Cola Company
Bridging the demand landscape with the OBPPC model offers a robust approach to operationalizing the portfolio strategy.
By systematically following these steps, companies can effectively align their portfolio strategy with consumer demand and channel dynamics, maximizing opportunities for success in the marketplace.
Contributors: John Wu, Associate; Yang Yu, Associate
A strategy holds significance only when it seamlessly transitions into execution. With a well-defined demand landscape and portfolio strategy, marketers excel at implementing the strategy in an iterative way that will achieve sustainable and transformative growth. For consumer brands, depending on their industry, leveraging the portfolio strategy to manage consumer segments through the CRM and landing it at retail channels through OBPPC will be the two most effective approaches.
Need help identifying your brand’s demand-to-growth landscape and operationalizing your portfolio strategy?
Unlocking Sustainable Growth in the Middle East: Key Priorities for CEOs
As the region witnesses remarkable strides in its non-oil economy, we outline four priorities CEOs must adopt now to balance challenges with potential.
In the fast-changing landscape of the Middle East, strategic investments for sustainable growth and resilience are paramount. With notable advancements in the non-oil economy, diverse sectors are opening up new opportunities for development. The region’s robust economic diversification efforts are positioning it as a leading hub for growth. Organizations need to think holistically as they balance challenges against potential. Those who make the right bets now, navigating those complexities, will yield results that mitigate risks, lead to progress in efficiency and sustainability and improve their employer reputation.
CEOs should make sure these four priorities are high on their lists:
1. Navigating EU Green Deal to Unlock Expansion Opportunities
Many organizations in the MEA are eying market expansion into Europe, which means they must comply with the EU Green Deal that passed in May last year. Some of these issues, of course, are about regulatory mandates. Businesses must invest in sustainability measures to avoid market access challenges. From a compliance standpoint, organizations entering the European market must adhere to the stringent environmental regulations outlined in the deal. Many of these focus on carbon emissions and energy efficiency, which are crucial for market entry.
But expansion requires thinking beyond regulations. European institutions favor businesses aligned with Green Deal goals. Consumers also prefer businesses that highlight sustainable practices. So do potential employees. Tapping into that environmentally conscious consumer segment means companies should emphasize the many ways they are transitioning to a green economy. Take every opportunity to expand and highlight ways the enterprise focuses on renewable energy, clean technologies and sustainable practices.
Forward-thinking companies will recognize the EU Green Deal as a two-way street, offering abundant possibilities for transferring technology and innovation. Look for ways to collaborate with European counterparts to foster new solutions. Middle Eastern businesses that can leverage partnerships to enhance their competitiveness in the European market will have a smoother entry into European markets than those that go it alone.
2. Embracing Sustainability as a Catalyst for Growth
With international, national and local mandates growing more explicit, it’s easy to continue to view sustainability efforts as a costly drag on profits. That’s short-sighted. For businesses to grow, they need to replace that thinking, enhancing business ecosystems by aligning growth strategies with sustainability.
Sustainable practices nurture growth. They create a level playing field with companies around the globe and enhance brand reputation. They help attract and retain talent. Middle East businesses can contribute to a greener future and strengthen their resilience and competitiveness by combining growth and sustainability planning.
In seeking a holistic blend of these initiatives, businesses can look at the bigger universe they operate in, promoting partnerships and interconnectedness. Planning for a future dependent on and interacting with other companies, governments, and community groups makes aligning growth goals with sustainability in clear and measurable ways easier. Goals should encompass carbon reduction and eco-friendly product development.
3. Fostering Local Growth Amidst Saudi Arabia’s Megaproject Surge
So many changes are underway in the largest economy in the Arab world that it’s hard to keep up. In keeping with its sweeping Vision 2030, the Kingdom of Saudi Arabia has stepped up public relations, marketing and communications efforts and is emerging as a top global destination. Last year, the country welcomed more than 100 million tourists, a milestone it had hoped to reach by 2030. That’s a jump of 56% from 2019 and 12% from 2022.
It has also won plenty of global attention for megaprojects, like NEOM, a $500 billion megacity under development.
That’s all crucial for the growth of KSA. Yet there seems to be a growing gap in providing sustainable projects that benefit the local population against massive megaprojects. This gap leaves plenty of room for businesses to launch initiatives, better positioning them in this important market, including:
Prioritize local hiring of talent in both skilled and unskilled positions, contributing to job creation and economic empowerment.
Support skill development initiatives and training programs that enhance the capabilities of the local workforce.
Start infrastructure development projects throughout the value chain, which will connect to the vast business needs of megaprojects.
4. Use Influencers and AI for Human-Centred Marketing
Using artificial intelligence to power personalization and content creation is a trend that is as big in the Middle East as it is everywhere else. So is the importance of influencer marketing, particularly among larger corporations, and AI makes it possible to dramatically increase its reach.
We are all for efficiency gains from thoughtfully deployed machine thinking. Yet as companies invest more in technologies, like GenAI for marketing and advertising, a crucial consideration for the Middle East emerges: How can companies maintain a human-centric focus? While consumers in the region are increasingly open to digital options, they’re wary of impersonal bots. They crave a human touch. That means companies need to find a delicate balance that preserves the creativity inherent in human behavior and the next generation of marketing. Even as companies step up investments in AI, they need to run all marketing solutions through customer-centric frameworks. Efficiency can’t come at the expense of genuine human connection.
The MEA region’s business and investment landscape faces a pivotal moment, demanding strategic investments and holistic approaches to overcome challenges and seize opportunities. Embracing diversification, sustainability, and innovation, enables businesses to flourish in this dynamic environment, fostering a sustainable and more resilient future for the region.
After a year of deep cuts and belt-tightening, recession fears have given way to confident resilience.
The past four years have been tumultuous, with executives, across industries, forced to navigate market-wide headwinds, high-interest rates and a weakening labor market. Thankfully, the recession many feared, never materialized. Yet, leaders prepared for the worst, with 2023 widely considered the “Year of Efficiency.” Companies minimized and cut costs, optimized productivity and — at times — restructured their organizations to get closer to the market and remain above water.
However, the tide is shifting, and 2024 is widely regarded as a return-to-growth year in which resiliency will reign supreme. To better understand what is behind this sense of optimism, Prophet analyzed over 50 corporate earnings reports from some of the world’s largest businesses, across industries.
Our research found that last year’s “doing more with less” strategy paid off for most organizations, creating 85% year-over-year growth in net income across the companies studied. That’s a drastic improvement from similar research we conducted last year, which found a 22% decrease in earnings in 2022.
Now that companies have optimized their organizations, they are getting back to the basics of growth. They are investing in flexible growth strategies that can endure beyond cost-cutting initiatives and efficiency maneuvers, and, thus, 2024 is shaping up to be the “Year of Resiliency.”
Five Top Learnings From This Pivotal Earnings Season
Leaning into Growth, Once Again
“Efficiency” and “budget cuts” were the flash words that bounced around in the first half of 2023. Now, “innovation” and “expansion” are center stage. This earnings cycle saw exciting announcements for new products, services and experiences that transcend traditional industry boundaries.
In retail, for example, Target announced Target Circle 360, its new paid membership program. It is pulling a page out of Amazon’s and Walmart’s playbooks and living up to CEO Brian Cornell’s promise of “making sure that we make Target a growth company again.” After Walmart’s year of optimizing, it witnessed a significant 23% year-over-year growth burst in e-commerce sales, bolstered by the announcement of a new B2B purchasing site, Walmart Business.
Others are also expanding their portfolio of offerings and innovating their go-to-market strategies. Apple is rolling out a new B2B service platform, Apple Business Connect. Pfizer is extending its expertise (and brand) beyond respiratory as it goes deeper into oncology. And Peloton is launching “Peloton for Business.” These expansions represent the beginning of an accelerating trajectory toward growth.
Embracing GenAI as a Strategic Growth Lever
Almost all the companies in Prophet’s study say GenAI is a top priority, playing a role in driving not just efficiency but sustainable growth. Major technology players are paving the way, both as exemplars of “moving from talking about AI to applying AI at scale” within their business to launching new products like Microsoft Copilot, Google Gemini, and Amazon Rufus that allow other industries to use AI to power growth.
EdTech company Chegg is embracing GenAI by developing automated, higher-accuracy question-and-answer services. In entertainment, DraftKings is using GenAI to lower customer acquisition costs and improve its targeting capabilities across its marketing efforts, resulting in it raising its 2024 revenue guidance. In the energy sector, GenAI has helped ExxonMobil leverage automated deep-sea drilling and optimize its widely dispersed field assets, helping it beat earnings expectations.
To be clear, GenAI faces challenges, with mounting social concerns — and lawsuits — tied to privacy and cybersecurity issues. And then, there are the massive costs associated with training, upskilling and managing new systems. While introducing new technologies into an organization is not new news, GenAI is at a scale that requires massive paradigm shifts for most companies to maximize its positive impact while minimizing the downsides mentioned.
Harnessing Customer-Centricity to Fuel World-Class Experiences
Companies with the most substantial potential to break through increasingly competitive interconnected marketplaces are discovering ways to harness technologies to enhance customer-centricity, establish deeper levels of relevance and deliver unmatched value.
In healthcare, CVS Health realized 11.9% revenue growth by harnessing advanced analytics, machine learning, and process automation to predict customer needs and generate tailored care services, such as its ExtraCare loyalty experience. It provides personalized health and beauty products, and members can choose “benefits that best fit their needs.” MetLife uses advanced technologies to create personalized insurance products that cater to specific customer needs and risk profiles. United Health Group, Walgreens and Cigna are all leveraging technologies to coordinate value-based care, enhance digital offerings and improve the patient experience. As a result of these investments, every healthcare company in Prophet’s analysis beat analyst estimates for revenue and earnings in the fourth quarter.
In transportation, Ford Motor Company brought in a former Apple executive, Peter Stern, to help adapt to the changing EV landscape and build customer experiences through Ford+. CEO Jim Farley describes that hire as “transformational for this strategically vital part of our business.”
In another way to get closer to customers, GE HealthCare is acquiring MIM Software to complement Predix, its industrial manufacturing cloud platform. MIM Software’s AI and analytical capabilities across practices are reshaping the possibilities of precision care for patients and providers, enabling GE to “meet customers’ most complex and pressing needs, today and into the future,” says CEO of MIM Software Andrew Nelson, proving once more how customer-driven solutions continue to elevate experiences.
Driving Next-Generation Employee Value Propositions
It is no secret the workplace has vastly changed as executives grapple with the COVID-induced remote-hybrid debate, the repercussions of mass lay-offs and quiet quitting and the undeniable risks posed by rapid automation. Executives in Prophet’s analysis believe their talent are the critical lynchpin to driving the transformative growth most are seeking. Accordingly, many companies are backing up their claims with significant investments and shifts in compensation, development and employee well-being.
The Home Depot’s 2023 decision to invest approximately $1 billion in annualized compensation for its frontline, hourly associates — even in a down year — illustrates the importance of nurturing what it considers its key differentiator: the “Orange Aprons.” This strategic move underscores the company’s recognition that maintaining a satisfied, skilled, and motivated workforce is essential for navigating economic uncertainties and securing sustained growth. It is paying off, too, with meaningful improvement in attrition rates and an increase in its customer service score by 600 basis points.
In leisure, Hilton adapted to the changing dynamics of work by launching the innovative “Hilton Work Anywhere” initiative. By enabling corporate employees to work remotely from its global network of hotels, Hilton taps into the growing demand for flexibility and remote work opportunities. Comparatively, Cisco focused on building external economic resilience by partnering with global HR services company Randstad to equip over 25 million people with digital skills through Cisco’s Networking Academy. Such partnerships and reskilling programs are pivotal in powering the future of innovation, growth and global competitiveness.
Moving to Profitable Sustainability Impact
While sustainability has continued to be a top priority for consumers, more companies in Prophet’s analysis are now proving that “doing the right thing” isn’t the only benefit of pushing an innovative sustainability agenda. For instance, building materials and provider Holcim set a goal of achieving 100% renewable energy in U.S. operations by 2050, and its eco-friendly solution ECOPact concrete, now accounts for 19% of Holcim’s ready-mix net sales. The company is also “driving fast-paced growth in circular construction” through its waste-minimizing ECOCycle practice, helping it differentiate and grow as a leader in sustainable construction.
Eastman Chemical is working to solidify its position as “a leader in creating a circular economy,” capitalizing on customer demand and growth opportunities by replacing plastics with recycled-content-made products and innovative molecular recycling facilities.
By embedding sustainability into their core growth strategies and moving beyond 2030 or 2040 Net-Zero Carbon commitments, companies are addressing pressing environmental challenges and positioning themselves as forward-thinking leaders in their respective industries, setting a new standard for corporate responsibility and innovation…and driving sustainable growth.
Acknowledgments:Jason Tan, Jane Lee, Zach Lipkin, Mae Mourtisen, Will Littlejohn, Erik Muenster
The cost-cutting, optimization and efficiency-grabbing efforts of 2023 have set the stage for a new and potentially powerful growth year. Many companies are at an inflection point, moving from a reactionary state to focusing on the future. Business leaders must have a long-term strategy to position themselves for sustainable, transformative and purposeful growth. They need to bring new products, services and experiences to market, keep AI at the forefront of their agenda, invest in their people across all dimensions of well-being, and fully integrate sustainability into their business model. Hopefully, when we return to you a year from now, we will be writing about the Year of Accelerated Growth!
A Formula for Kickstarting Behavioral Change and Creating Lasting Organizational Habits
Unlock the secrets to organizational change with Behavior Kickstarters. Learn how rapid experiments can catalyze cultural shifts and drive impactful transformation.
We’ve all been there. We start the year with the best of intentions, convinced that this time will be different. However, as life’s demands and our ingrained habits exert their influence, our resolve weakens. Despite multiple attempts to restart, within a few months, we find ourselves reverting to familiar patterns.
And it’s no different in the workplace – in fact it’s much harder. Beyond the demands of their job, employees must also fight against the pull of the organizational system. A pull that is so strong that eventually most change efforts are pulled back to ‘the way things are done around here’ and ultimately fail. An IMD global study of 500 executives found that only 50% of attempts to change employee behavior are successful. So, in short, change in a busy, complex organization is hard.
So how do you overcome these powerful forces to successfully change behavior and build new habits?
We believe that change happens through doing, not talking. Moving from words to action. You can’t just click your fingers and suddenly become more innovative, creative and collaborative. Humans don’t work like that. You must poke a stick into the organizational system and be intentional about creating change.
The first step in this magical process is to start really, really small.
Behavior Kickstarters Formula
Behavior Kickstarters are rapid experiments designed to activate new behaviors and catalyze cultural shifts. Using a mix of behavioral science and experimentation techniques, our Behavior Kickstarters create a safe space for people to experiment with, and ultimately adopt new behaviors and build new habits. They establish the right conditions for people to try, fail, learn and grow.
While people are wonderfully different and unique, human behavior has followed consistent patterns since the dawn of time. Not only are we programmed to follow the path of least resistance, but our endorphins also encourage us to seek out the things that are satisfying. And we’re social beings, where the pull of the crowd can have a significant impact on our behavior and decisions. In other words, we only change our behavior when it is easy, feels good or when people we admire are doing it.
Our Behavior Kickstarter formula ensures the right ingredients are present for driving behavior change.
Trigger – Make it obvious – Something that signals the need to start, gets your attention and shows the need to take action.
Motivation – Make it attractive –Create an image in the mind of the user that makes them want to change.
Ability – Make it easy – The easier a behavior is to do, the more likely it is to be done.
Reward – Make it satisfying – If it feels good and has a satisfying ending, we’re more likely to repeat it in the future and form a habit.
While this formula helps us change in the immediate term, we also need to consider how we form new habits to embed the change. This is where experimentation comes in.
Unlocking Organizational Change Through Experimentation
Experimentation isn’t reserved for labs or innovation teams – it can be a powerful mechanism to drive sustained organizational change. Teams can use it to become more adaptive and to create a safe environment that allows people to try new behaviors and fail, and to apply learnings from their failures to change their approach and try again. Supporting this idea, our Catalysts research, How to Build an Adaptable Organization that Thrives During Uncertainty, identified ‘lowering the cost of experimentation’ as one of the five ways to build an adaptive organization.
The concept of experimentation is deeply ingrained in all of us. We just don’t apply it in an organizational context. Dave Snowden, founder and chief scientific officer of Cognitive Edge, sums it up beautifully, “The engine of all life on this planet has always changed in the same way. We try things, notice positive and negative patterns, amplify what’s working, minimize what isn’t.” Yet, despite being ingrained in us, the number of people who use experimentation is comparatively small. People seem to struggle to apply it to their day-to-day lives, meaning its potential is often left untapped. Michael Schrage, author of The Innovators Dilemma, uses a wonderful model for driving its adoption whilst solving real business challenges. Teams of five, each generate and test a solution to solve one of five challenges, over five weeks. The winning idea receives financial backing to be taken forward. Along with generating great ideas to solve real problems, this approach creates a fun, engaging way to understand the power of experimentation.
Like Schrage’s method, putting experimentation into practice with our Behavior Kickstarters is simple. We recommend a timeframe (~2-4 weeks) and at the end of that period, we reflect on how it went, what went well and whether we achieved the desired outcomes – using this data to define what could we do differently next time. Then, if needed, we make changes to the Kickstarter and go again!
A Kickstarter can take many forms. Ideally, it will be designed so it fits seamlessly into the employee’s day-to-day world – as part of existing meetings or a regular routine, like a morning cup of coffee, for example.
Trying to make your teams feel recognized? Thank You Thursday: Every Thursday, send a short thank you note, acknowledging the efforts of an individual or team for that week (for something big or small).
Trying to increase psychological safety? Poke Holes in This: Before sharing an idea, ask the team ‘Please poke holes in this’, opening yourself up to helpful feedback and encouraging vulnerability.
Trying to increase collaboration? Don’t Rush Into it: At the start of your weekly meeting, spend five minutes with everyone sharing what they did over the weekend, building relationships outside of just work commitments.
Prophet’s research tells us that, by targeting the “Soul” of the organization, we can activate and accelerate key transformation levers, such as ‘Developing meaningful mechanisms to enable employees to adapt.’ We mentioned earlier that beating the organizational system is difficult and most organizations don’t have these change mechanisms in place. Behavior Kickstarters do exactly that, equipping employees with a powerful method to grow, adapt and thrive in the ever-changing world we now find ourselves in.
The crucial part of this comes not in running the Kickstarter, but in equipping your teams with the permission and ability to constantly repeat it over time to embed the new behavior until it becomes a habit. Wendy Wood, author of Good Habits, Bad Habits estimates that we spend 50% of our time unconsciously repeating actions we’ve already taken. By intentionally repeating the Kickstarter, you train your brain by practicing new behaviors and building the pathways needed to create daily habits. For this instance, fake it until you make it – or in behavioral terms, fake it until you become it.
The idea of ‘fake it until you become it’ is not new, in fact, it is over 2,000 years old. Aristotle believed that people could not simply know, or study, how to be virtuous. To be virtuous, they must practice virtuous actions: first by imitating others who demonstrate virtuous actions and then turning those imitated behaviors into habits by performing them every day. You practice the behavior you want and then one day you turn around and discover you’re not performing the behavior, you’re living it.
The beauty of this transformational process is its ripple effect, fostering further change not only with individuals but also throughout the broader organization. On an individual level, the success of initiating the first Behavior Kickstarter inspires you to do it again (following our Behavior Kickstarter formula: we only change when it feels good). If you’re trying to get fit, and you feel good after your first 5km run, you might try 7km, or 10km and then maybe eventually a half marathon. At an organizational level, it can quickly become contagious. The stories of others successfully changing their behavior become the currency of change, creating a sense of envy that motivates others to do the same. Just like when we witness a good deed, like someone helping an elderly person with their shopping, we’re far more likely to carry out a good deed ourselves later that day.
“All big things come from small beginnings. The seed of every habit is a single, tiny decision”
James Clear, Author of Atomic Habits
To fuel a change movement across the organization, it’s helpful to share stories of how others are running their Behavior Kickstarters to reinforce these successes with recognition and celebration. This inspires others to initiate their own Kickstarter, setting off a chain reaction that swiftly builds into a potent force for change.
Change shouldn’t be isolated to those with ‘people’ or ‘culture’ in their title, or limited to company offsites and launches for new corporate values. The beauty of Behavior Kickstarters is that they’re accessible to everyone. Facilitating the adoption of new behaviors is a sure-fire way to accelerate change across your organization.
Some questions for you to reflect on: How is your organization living your values? How are you living them? Are there new behaviors or ways of working that are not currently being lived?
If you’re interested in finding ways to create a safe space, enhance collaboration, or ignite innovation and creativity, our experts are ready to help.