“In the new world,
it is not the big fish which eats the small fish.
It’s the fast fish which eats the slow fish.”
Founder & Executive Chairman of the World Economic Forum
As a small CPG manufacturer, you already know the advantages you hold over bigger companies. Small companies are often the driving force behind industry innovation thanks to their openness to new ideas and their ability to act quickly to make those ideas a reality.
In the CPG world, think of brands like Chobani or Swiffer. As one of the first to introduce the US market to greek yogurt, Chobani reached $1B in sales in less than five years, while Swiffer became the first quick-cleaning mop with disposable fixtures, pioneering a new sub-category of cleaning supplies. Often, it’s not about the finish line – it’s about who starts the race first.
So how can small companies take full advantage of their innovative agility?
McKinsey’s global survey, “How leaders in data and analytics have pulled ahead”, may help to answer this question. The survey’s authors set out to determine if investing in data and analytics really impacts a company’s bottom line. They compared high-performing companies – or those who have grown organically at least 10% over the past three years – to all other companies, to see what the secret to their success might have been.
Spoiler alert: investment in data and analytics pays off. But read on to see exactly how investing in data and analytics empowers small and medium sized CPG manufacturers to innovate smarter and grow faster.
Set a holistic data strategy
While 21% of respondents from high-performing organizations identified setting a data and analytics strategy as their number one key to success, the proof is in the comparison to lower-performing companies: High-performing businesses were also 57% more likely than their peers to report altering their long-term strategy in response to data and analytics. These companies also took pains to set a strategy that aligned data and analytics with the overall business strategy: 60% of them say these strategies are mostly or completely aligned, compared with just 44% at other companies.
Notably, these numbers have jumped since the previous iteration of this survey. That 21% dedicated to a data strategy is an increase from 14% the previous year. The tide seems to be turning even more quickly for smaller businesses (McKinsey defines these as those with annual revenue under $1B): 46% are now extracting novel insights from data they were previously not using or ignoring, compared to 41% of companies of all sizes. It’s clear that the trend to drive business strategy with data is not slowing down anytime soon.
Build a “data-first” culture
One of the biggest gaps between high-performing companies and the rest were incorporating daily data practices for every member of their organization, from the top all the way down. 46% said their C-suite team included at least one data leader, and 43% said data is broadly available to frontline employees whenever they need it. That’s a massive gap compared to lower performing companies: high-performing orgs say they have a data leader in the C-suite 70% more often than lower performing companies do, and also claim they make data broadly available to frontline employees 65% more often than lower performing organizations say they do.
Companies looking to emulate this model not only have to support their employees in becoming comfortable with data, but perhaps even more importantly, they need to simplify and streamline the data and analytics tools offered to employees. In another McKinsey study, “Reducing data costs without jeopardizing growth”, it was found that between 30 and 40% of the reports that businesses generate daily add little to no value. Some are duplicative, and others go unused, wasting considerable resources. It’s crucial, then, that companies choose streamlined reporting tools that make high-quality analytics reporting a quick and easy process.
As an emerging CPG brand, you may not have the army of analysts you need to turn a billion disparate data points into actionable insights – that’s why we’ve built Byzzer from the ground up, especially for smaller CPG companies to bypass the data mining and get straight to the solutions you need to grow your business.
Treat data and analytics as an investment
Older models of doing business still matter. Industry expertise, relationships and intuition have gotten many a CPG product on shelves. But only an investment in data and analytics will ensure your product remains there.
For smaller businesses, the need is even more urgent. 36% of these smaller companies said their traditional competitors have already gained a material edge by integrating data and analytics into their core business.
Building a “data first” company doesn’t happen overnight. Evolve your company and culture one step at a time. Promote employee education around CPG data and analytics. Task leadership with setting strategies that enable quick iteration based on insights drawn from your analytics. And choose a data and analytics tool that helps you do that efficiently and effectively – we think Byzzer can help you with that part.
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