2021 - The Year of the Digital Revolution
The challenges and opportunities in times of change and transformation

Bob Wolheim, our CSO, recently interviewed Sérgio Vezza, Vice President of BEES, the startup behind the giant Ambev. The conversation revolved around the growth of BEES, and above all, how companies need to conduct themselves in order to survive in this new scenario. 

More than ever, immediate action is required. To act is to transform. Strategic thinking and leadership models must change in order to make this transformation real.

In these extraordinary and challenging times, software continues to produce radical changes in values and consumption habits globally. To stay in the game, traditional organizations must undergo a sustainable transformation that results in  a new way of designing, building, and evolving products, experiences, and digital platforms. At the same time, management systems must also evolve to become the connector of strategy with day-to-day teamwork. 

The most significant opportunity lies in changing the cultural and management models of large corporations that have traditionally excelled in managing quality, productivity, supply, distribution. These are precisely the elements that must be managed with continuous improvement and rapid discovery cycles to avoid slowing innovation and transformation.

Disruptive Technology

Coined by Harvard professor Clayton M. Christensen, Disruptive Technology is a product or service that creates a new market and destabilizes competitors that previously dominated it. It is usually characterized by simpler or cheaper solutions or innovations that serve an entirely new audience. Disruptive technologies usually start by offering products for a modest audience until they capture the entire market segment over the course of time.

In a time of pandemics and many other transformations, there is a real need to take advantage of opportunities to build strategies focused on growth, innovation, or disruptive technology.

According to Christensen, company growth is driven by three different and gradual strategic focuses:
(i)improving existing processes, products, and services;
(ii) marketing and design strategies to reach new markets or target audiences;
(iii) modifying mental models and operations to put the consumer at the center of the strategy. 

The vast majority of companies allocate a very small percentage of their efforts and budget (in the range of 5%) to the most disruptive initiatives, with an expectation of obtaining results in five or 10 years.

Sérgio Vezza commented that: “This is a point that we cannot ignore. In a consumer goods company or in a traditional industry, unlike a company that is starting now, we have a business that is called legacy. Everyone has a legacy, all companies have a legacy. That's the major problem when you want to do a digital transformation using technology".

Taking on a digital profile

New leaders must be prepared to collaborate rather than command, to ask the right questions rather than give answers, and to provide autonomy rather than control. Leadership in digital times must be focused on developing a constant learning mindset, both for oneself and for the company, with a view to creating environments that encourage experimentation and risk-taking.

Sérgio Vezza points out: "I think that we always have to reinvent ourselves and give opportunities. I, in the past, perhaps, thought too much about command and control. Now, it is much more the question of autonomy as well. It is about giving freedom to the team. It's you letting the person, many times, break his/her head. So, he/she ends up being a resource manager, an orchestrator of the team. The team must have autonomy and, mainly, play this role of translating what transformation is, using technology ”.

A company must see possible errors and problems as opportunities for growth and levers for innovation since they are a natural part of the process for developing new products, services, and experiences.

Another essential factor for good leadership is the ability to understand people since talent, engagement, and creativity are what builds success.

Technology does not innovate, people do. Technology is not breaking barriers in any sector or market, people are. Being a leader in the 21st century is, after all, giving a human face to leadership.

Leadership constitutes one of the main obstacles to change within companies, whether large or small. In general, most current leaders achieved a successful career with 'Command and Control,' the classic management model of the industrial century. But this leadership style cannot leverage innovation and agility.

In the digital economy, companies require leadership that inspires, translates strategy into purpose, promotes an obsession with learning; leadership that creates an environment for experimentation, risks, and mistakes. But, above all, it requires leadership that values the human beings that make up the company. This change is neither quick nor straightforward, but it is possible and necessary.

The challenges of strategy and leadership are many, but there are promising ways to make inevitable changes consistently. In practice, the goal is to find an organizational and operational model that changes according to customers' needs and adapts continuously. This is a strategy centered on innovation – a digital strategy.

Consumer focus

Vezza says: "first, we have always talked about listening to the consumer, listening to the customer. This centrality was where we broke the barrier and really did it in an exemplary way ”.

There is no easy way. Many companies have chosen to accelerate digital transformation in order to streamline processes, modify services, and create new products. The pandemic has shown that a lot of sensitivity is required to meet the immediate needs of customers, without losing sight of the future.

So far, we don’t know what our new normal will be. But it seems some habits are here to stay. One of them is our relationship with technology.

The central question is how companies have adapted to changes in societal values and consumption habits in mere months when it would typically take years. It's necessary to start a new journey where innovation happens through technology, partnerships, and acquisitions. Online commerce gained more momentum and importance. It was there that most consumers migrated, searching for all sorts of products. Attention to changing customer habits was also on the radar of companies with vision.

In the podcast, Bob asks: “What are your greatest learnings, not only talking about AMBEV and BEES, but also as a manager of the accelerated transformation that you are successful at? What are the lessons learned from these great transformations that are not only technological? ”

“First you must show that you have the ability to do it and then have a sponsor within the company that will help you. Because it is not a digital transformation at all. In a consumer goods company, it is not. It is a business transformation enabled by the use of technology. So, this was the first apprenticeship ”, says Sérgio Vezza.

The diversification process was accelerated and technology played a central role in adapting to the so-called low-touch economy.

The world had come to a standstill, but business could not stagnate. Companies had to revisit old projects or establish technological processes that were still in the testing phase. It was necessary for companies to change their mindset. 

The BEES project at Ambev is a great example of what we are talking about. The pandemic has boldly accelerated the development of this platform, a marketplace focused on Points of Consumption, B2B consumers of Ambev. On the platform, the multinational's brands are present, in addition to products from other companies, expanding the offering to customers. 

In a digital scenario, Ambev innovates by offering discounts and exclusive loyalty to customers through BEES. There is also the factor of practicality: customers place orders for goods whenever they want, and receive them on the best day and time for them. 

The strategy has paid off. More than 300,000 orders per day, with 1,600,000 registered Points of Consumption, pass through BEES. This proves that companies that bet on the implantation of a new mindset and accelerate projects saved for the “future”, manage to grow and reinvent themselves. In addition to value is delivered to customers in new and surprising ways.

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