EY launches operating model transformation solution

As businesses look to pivot their organisations for the economic recovery, EY has launched a new solution to help consumer products companies reshape their operating models. EY Partner Steve Basili remarked that the practice will help leaders to realise being “future fit” does not have a “finish line,” and that they need to adopt a culture of constant adaptation.

Basili, who is the firm’s Global Operating Model Transformation Leader, added, “Leaders must keep adapting their business priorities and strategies in a volatile market, where demand can take off in an instant or be slowed down by supply chain issues. Doing that requires a different kind of operating model: one that is both robust – so that the organisation can be resilient and optimize for today’s needs – and flexible, so that they’re agile enough to respond to new opportunities and challenges as they arise.”

Changing consumer expectations, technological change, increased industry convergence and rising sustainability pressures are driving transformation in consumer product (CP) companies – something accelerated by the Covid-19 pandemic. A recent survey by EY found that companies will not be able to execute the change they need in the timelines they anticipate.

While 98% of respondents said operational transformation was a priority, 46% admitted to underestimating the timeframe necessary to transform. At the same time CP companies are underestimating the value of partnerships, with 90% of such companies stating they were not currently pursuing partnerships, preferring to go on the transformation journey alone.

This can quickly lead to a firm’s transformation efforts being overwhelmed, though. With so many priorities to address during an operational transformation, and no clear roadmap, CP companies quickly face internal challenges. Around 63% of respondents noted expecting to see resistance to change in their existing company culture, as well as significant divergent internal strategic priorities – something a change partner could be crucial in helping navigate.

EY’s new operating model transformation solution will primarily aid consumer products (CP) companies to reshape operating models. The solution is based on five integrated design elements to assess where a company is in its transformation journey and where it needs to be: dynamic ecosystems, digital DNA, talent flexibility, innovation platform and enduring purpose.

Kristina Rogers, EY Global Consumer Leader, remarked, “Consumers are moving on. They have built their own way forward and believe the way they shop has changed forever as a result of the pandemic, according to the EY Future Consumer Index. A leadership team that understands where the future consumer is heading can better identify their roadmap to success and the actions needed to get there.”