2021 - The Year of the Digital Revolution
Recognizing the challenges and opportunities in fast-changing times
Recently, Bob Wolheim, our CSO, interviewed Sérgio Vezza, Vice President of BEES, the startup behind Ambev and AB InBev, owners of brands like Budweiser and Stella Artois. The conversation revolves around the growth of BEES, but, most importantly, they discussed what companies need to do in order to survive these unprecedented times.
Now more than ever, an immediate reaction is needed—reacting means transforming. And, for this transformation, changes are necessary especially when it comes to strategic thinking and leadership models.
These are extraordinary and challenging times. To stay in the game, traditional organizations need to undergo a sustainable transformation that requires a new way of designing, building, and evolving products, experiences, and digital platforms, as well as redesigning their management system. This new management system will be what connects strategy and how your team executes it in their daily work.
AB inBev’s success is founded on its quality of a wide portfolio of products, productivity, supply distribution, and much more. And they have recognized that this alone will not get them ahead of competitors, especially in today’s landscape.
An expression 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 something simpler and cheaper, compared to those in the market or something capable of serving an audience that previously did not have access to that market. It usually starts by offering products for a modest audience until, in the course of a period, it captures an entire segment.
The pandemic has forced many changes upon all of us—changes to which we have no choice but to adapt. These trying times have also presented new opportunities and trends.
According to Christensen, companies grow driven by three different and gradual strategic focuses, that is, to improve existing processes, products, and services; use marketing and design strategies to reach new markets or target audiences, and to modify how companies operate in order to truly put the consumer at the center of everything.
The majority of companies allocate a very small percentage of their efforts and budget (about 5%) to the most disruptive initiatives that usually show results in 5-10 years.
Sérgio Vezza comments on the following: “This is a point that we cannot ignore. In a consumer goods company or in a traditional industry, unlike a company that is just starting out, we have a legacy business. 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
The leaders of today need to be prepared to collaborate more than command, ask the right questions more than giving the answers, and provide autonomy rather than control. Leadership in digital times and within these unprecedented times must focus on developing a constant learning mindset and be able to create 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 ”.
Companies must view mistakes and problems that may arise as opportunities for growth and levers for innovation since they are natural parts of the process of developing new products, services, and experiences.
Another essential factor for the success of good leadership and, consequently, of a company, is the ability to understand people, since they, with their talent, engagement, and creativity, will build the success of a company.
Technology does not innovate, people do. Technology is not breaking barriers in any sector or market, people are.
The pandemic has been a catalyst for unprecedented transformation in leadership where they change their views and redefine what it means to be a leader. The old “command and control” doesn’t allow for innovation or agility. In this day in age companies need to have leadership that inspires, translating strategy into purpose; that promotes the learning obsessive mentality; that also creates an environment for experimentation, for risks and mistakes; but that, above all, understands and values the human beings that are part of that company. This change is neither simple nor quick, but absolutely necessary and possible.
There’s no shortage of challenges when it comes to strategy and leadership. And particularly in today’s time, organizational and operational models must keep up with the changes that their customers are finding themselves in—continuously adapting and innovating.
Vezza says: "First, that we have always talked about listening to the consumer, listening to the customer. This centrality of the client was where we broke the barrier and really did it in an exemplary way ”.
Although many companies have chosen to accelerate digital transformation to streamline processes, modify services, and create new products, surviving the pandemic still requires a lot of sensitivity to meet the immediate needs of their customers, without losing sight of the future of each sector.
It’s far too early to identify what our “new normal” will be, but we know that some behaviors are here to stay. One of which is people’s relationship with technology.
Companies with a broad vision of the future are more prepared to understand innovation and business transformation.
In the podcast mentioned above, Bob asks: “What are your greatest learnings, not only talking about Ambev/AB InBev and BEES, but also as a successful manager in accelerated transformation? What are the lessons learned from these great transformations that are not only technological? ”
“First, it shows that you have the ability to do it and that you have a sponsor who is relevant within the company that he will help you. Because you said everything, it is not a digital transformation. 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 gained a central role in adapting to the so-called low-touch economy.
Keeping people safe while still serving customers were corporations’ main objective when the pandemic arrived in Brazil.
The world has come to a standstill, but businesses can’t afford to not do anything. For this reason, companies had to take projects out of the drawer or establish, as a standard, more technological processes that were still in the testing phase. It has become necessary for companies to change their mindset.
The BEES project, at Ambev and AB InBev, is a great example of what we are talking about. The context has accelerated the development of this platform, a marketplace focused on Consumer Points (POC) and B2B consumers of Ambev and AB InBev. The platform features not only its own brands but also includes other companies’ products, expanding its offer to customers.
Companies are able to offer discounts and exclusive loyalty through BEES. Customers are also able to place their orders to replenish their stock whenever they want and schedule the best time for delivery.
The strategy has paid off. More than 300,000 orders per day, with 1,600,000 registered POCs, pass through the BEES platform. This proves that, in general, companies that quickly bet on the implantation of a new mindset and accelerated the projects saved for the “future”, managed to grow and reinvent themselves, in addition to delivering, increasingly, value to customers in new and surprising ways.