The Top 10 Ways to Position Your Company for Growth

In a world where complexity is growing as economic growth slows, connecting with both employees and customers is more essential than ever before. A connected world offers rich opportunities to engage your customers, partners and employees around the world. And food industry leaders who fail to fully exploit the potential of the latest tools in operations and marketing face an increasingly unforgiving environment: Consumer markets representing about 80 percent of global gross domestic product are slowing, according to RetailNet Group, a Waltham, Mass.-based publishing and advisory company focused on chain and online retailing. "The biggest mistake a retailer can make today is to project the past into the future," says Dan O'Connor, RetailNet Group president and chief executive. "What retailers need to think about is how to bring a picture of the future to the present."

Retail Leader asked a host of experts and futurists to share their insights on creating a future-friendly food industry. Here's what they told us.

Julie HallBill BishopEdward GordonAndrew Razeghi

1. Innovate, innovate, innovate
Brainstorming to come up with the next big idea is no longer sufficient. Innovation is a discipline, just like accounting or marketing.

"You need to approach it holistically, embed it in the organization and make it someone's job," says Andrew Razeghi, an adviser to Fortune 500 companies and a lecturer at Northwestern University's Kellogg School of Management in Evanston, Ill.

Instead of finding the next billion-dollar product, innovating means answering the question, "How do we distribute, merchandise and manage in a world in which we'll have many smaller brands instead of big category killers?" Razeghi says.

After leaders define innovative behavior for their organization, they need to reward it, says Lisa Gundry, professor of management and director of DePaul University's Center for Creativity and Innovation in Chicago. "People need to be able to safely experiment and try new solutions. They need support from the top of the organization all the way down."

2. Cultivate collaboration
Strong, trusting relationships with partners, customers and employees are central to creating an organization where information flows freely and innovation flourishes.

"Leaders need to look hard at the issue of trust and develop a collaborative style and process where there's a true unified effort to serve the shopper," says retail food analyst Bill Bishop, chairman of Barrington, Ill.-based advisory firm Willard Bishop and chief architect of Brick Meets Click, an online community focused on the future of retailing.

Collaborative tools from online chat to wikis will grow in importance as Generation X-ers assume leadership roles and the Millennials, known as the digital generation, continue to enter the workforce. Younger generations will demand more collaborative approaches, both as employees and customers.

"You need to embed [innovation] in the organization and make it someone's job."

— Andrew Razeghi,

Northwestern University's Kellogg School of Management

3. Invest in talent
Despite high unemployment, executives are entering an era of too few skilled professionals, technicians and managers to fill jobs and sustain growth around the globe, workforce experts say. Warning of an "unparalleled talent scarcity," a 2011 report by the Geneva, Switzerland-based World Economic Forum predicts skilled worker shortfalls of 25 million in the United States and 45 million in Western Europe by 2020.

"We're talking about a watershed change," says economist and adviser Edward Gordon, founder and president of Imperial Consulting Corp., which has offices in Chicago and Palm Desert, Calif. "We've taken technology and embedded it in everything, but if you don't have people capable of using those technologies to innovate products and services, the technology is junk."

"There's probably no more fundamental connection (in retailing) to health . . . than that between the retailer of food and the customer."

—Bill Bishop,

Willard Bishop

For the short term, employers will have to retrain employees who need additional skills and provide intensive training for new hires, Gordon says. "Companies are doing this in partnership with local organizations to stretch their dollars," he says.

For the longer term, they will need to collaborate with business and community organizations to improve local education-to-employment systems to shape the talent for filling key jobs.

"If you don't have people capable of using . . . technologies to innovate products and services, the technology is junk."

—Edward Gordon,

Imperial Consulting Corp.

4. Connect with customers
Retailers are just beginning to recognize the importance of creating and maintaining online communities to deepen relationships, spot problems and stay abreast of trends, says Julie Hall, executive vice president of Boston-based Schneider Associates, a public relations and marketing communications agency

Schneider identified a supply chain snafu for Revere, Mass.-based candy maker NECCO (New England Confectionery Co.) when a customer tweeted that she couldn't find a new line of Sweethearts at Walmart. The heart-shaped candies were stamped with phrases like "Bite Me" and tied to a popular young-adult vampire romance series, "Twilight." They were due out by Valentine's Day, but fans were hunting them earlier. "We immediately called Walmart, they released the candy, and it sold out." Hall says.

Programs such as Pleasanton, Calif.–based Safeway's "Just for U," which offers personalized savings for its loyalty program customers, are only a start toward deepening relationships, says Bishop. The future will belong to retailers that gather data and connect seamlessly with customers in their homes and in store aisles, at the point of purchase, via websites, social media, text and face to face.

Retailers are just beginning to recognize the importance of creating and maintaining online communities.

—Julie Hall,

Schneider Associates

5. Act nimbly
Winning strategies demand rapid, even instantaneous responses. Schneider's Hall recalls tweeting on her way home from the office, "Long day. Gotta go home and figure what I'm going to have for dinner." Austin, Texas-based Whole Foods Market tweeted back: "@JulieHallBoston, roasted free-range chicken is at the Cambridge Street store."

Product cycles are shrinking, tastes change more quickly and food categories can explode virtually overnight, notes futurist Jim Carroll, a Toronto, Canada-based trends and innovation expert. "If a trend emerges, you've got about three to six months to capitalize on it. "

6. Encourage a learning culture
Be open and curious, and make it a priority to connect with others outside your organization. "Change is so quick that exchanging information and knowledge is critical," says innovation expert Gundry. "Think about forming alliances and joining trade groups."

Range broadly when learning about your competition. In addition to grocery chains and mass merchandisers, incorporate other food sellers into your research—drugstores, dollar stores, convenience stores, even specialty retailers such as Starbucks.

Encourage employees to make "lifelong learning" a watchword. Support programs that help them continuously build skills and knowledge.

7. Be transparent
Transparency is one of the hallmarks of an era where everything is equipped with intelligence, and everyone is connected. It's also an imperative for food companies in managing their supply chains to ensure safety.

Consumers want deeper information about the food they eat, including who produced it and where. Catering to this trend, PepsiCo's Frito-Lay introduced an online Lay's potato chip tracker in May 2009 that lets shoppers enter their ZIP codes and the first three digits of a product code to find out where the potatoes were grown. Beef producers are just beginning to supply restaurants with DNA-traceable meat.

In the workplace, transparency is especially important to younger employees, who are steeped in a culture of information-sharing and openness, generational experts say. They want honest information about an employer's performance, its prospects and its future. They expect two-way communication via blogs, videocasts and town hall meetings.

8. Think local
Just as marketing must be personalized for an individual consumer, merchandising must be localized for each store. Getting the right mix of products to fully exploit market-area potential requires balancing the skills and instincts of an entrepreneurial store manager with decisions based on deep dives into company data, Bishop says.

The "buy local" consumer trend will continue to gather steam in a sluggish economy, fueled by a desire to support the local economy, conserve energy and procure fresher food. Yet for many consumers, "local" does not necessarily mean sourced from nearby, says Laurie Demeritt, president of the Hartman Group, a consumer trends and culture consultancy based in Bellevue, Wash. "Local" to many consumers means knowing the stories behind the products and a bit about the history, she says.

9. Embrace wellness
Taste trends come and go, but broad cultural shifts in behavior persist. One such shift is the search for products, experiences and services that enhance wellness, and no other consumer product category offers such a strong connection as food.

Despite the difficult economy, nearly one-third of consumers are willing to pay 30 percent more to buy organic fresh fruits and vegetables, according to a Hartman Group survey of 1,679 adult U.S. consumers conducted in December 2009. Nearly one in four say they are willing to pay up for organic milk and eggs.

10. Live your values
People want to be associated with organizations that resonate with their values. They want consistency between what they believe and care about and where they work or shop. And they want evidence of a company's commitment to its products, services and ethics.

After Whole Foods added a new core value to its mission in 2009—"Promoting the health of our stakeholders through healthy eating education"—it rolled out its trademarked "Health Starts Here" program in 2010 featuring educational tools, recipes and programs for shoppers and employees.

"There's probably no more fundamental connection (in retailing) to health and quality of life than that between the retailer of food and the customer," Bishop says, adding that Whole Foods has made that connection plain throughout its stores.

"The way we think about the food we eat is changing," says trends expert Carroll. "We care more about where it has come from and what has gone on in the process. It's not simply quality concerns and food safety concerns. We increasingly care about ethics."

Barbara Rose is an independent journalist who writes about trends in business, work and life. Her background includes more than 15 years as a reporter, editor and columnist at Crain's Chicago Business and Chicago Tribune.