Donna Stella Partner A.T. Kearney

Raising the Bar for CPG Sales Talent July 16, 2009 Sales Force Talent Management Study: “Talent Triage”

4 A.T. Kearney 7/ /46814A GMA / NEW Sales Force Talent Management Study “To enable the GMA and NEW’s corporate members and their employees to succeed in an ever-changing marketplace by identifying, developing and retaining a high-performing and diverse sales force.” “To enable the GMA and NEW’s corporate members and their employees to succeed in an ever-changing marketplace by identifying, developing and retaining a high-performing and diverse sales force.” Primary Objectives  Develop an industry perspective on the leading practices in sales force talent management  Understand the importance of CPG sales force diversity to business outcomes  Strengthen business results with a pragmatic, actionable roadmap for CPG companies to improve their sales force talent management approaches Vision Statement A.T. Kearney was selected to partner with the GMA and NEW to complete the “Talent Triage” study given our deep experience in the Sales & Talent space

5 A.T. Kearney 7/ /46814A What talent is required of top sales people today? Creative Thinker / Innovator General Manager Magician Road WarriorClient Relationship Manager Intelligence Politician Stand-up Comedian Stamina

6 A.T. Kearney 7/ /46814A What talent is required of top sales people today? Creative Thinker / Innovator General Manager Magician Road WarriorClient Relationship Manager Intelligence Politician Stand-up Comedian Stamina

7 A.T. Kearney 7/ /46814A Retailers told us that top CPG sales people are analytical thinkers with a general management view of the business Strategic Merchandising Skills Core Sales Capabilities Leadership & Personal Characteristics Strategic Merchandising Skills: General Management – Guide managerial action in the face of uncertainty / complexity Analytics – Analyze financial data to provide sound business advice Category Management – Contribute to cross-category strategies and promotion Consumer Insights – Provide information on segmentation, target marketing, creative merchandising Partnership – Identify opportunities to increase volume and revenue, raise profitability, and reduce unnecessary costs Cross-functional Collaboration – Understand why and how functions interrelate; build cross-functional teams Forward-Looking CPG Sales Competency Model

8 A.T. Kearney 7/ /46814A Sales Talent Management plays a vital role in driving profitable growth A.T. Kearney Sales Force Optimization Framework We have helped clients achieve double-digit revenue and profit improvement with SFO Processes to improve quality, productivity and provide a differentiated customer experience Supporting systems and tools to optimize sales productivity and effectiveness Alignment of go-to-market strategy with customer needs and business/marketing strategies Clearly defined sales talent, organization capabilities and structure including size, roles, responsibilities and decision rights Strategic Focus IT/ Sales Tools Compensation/ Recognition Training Metrics/ Accountability Lead Gener- ation & Mgmt. RFP Response Account Set-Up/ Pricing Service Delivery/ Relationship Mgmt. Post- Sales Support Sales Fore- cast’g & Mgmt. Strategy/ Planning Capabilities/ Resources/Deployment Enablers Supporting Processes Environmental Drivers Market Pricing Fundamental Economics Market Dynamics Product Promotion Regulation Existing Channels Geographic Scope Buyers/ Intermediaries Customer Strategy Supporting Capabilities Go-To-Market Approach We use this framework to drive profitable growth for our clients Staffing/ Skills Organization Design (Structure/Size) Channels Business and Market Contexts Sales Talent Management

9 A.T. Kearney 7/ /46814A Talent Management Lifecycle The talent management lifecycle involves strategically identifying, developing and retaining sales talent 5 Strategic Enablers Provide Support Throughout Talent Management Lifecycle 2 Develop Talent 3 Retain / Deploy Talent 1 Attract / Identify Talent Diversity Tools & Technology Transparent Communication Executive Sponsorship Incentives Metrics & Measurement Sales Talent Pool Objective: Having the right sales talent in the right place at the right time to achieve business objectives

10 A.T. Kearney 7/ /46814A What did we learn from the Sales Talent Management Study? CPG sales superstars have general management mindset – “thinkers,” not just “doers” Sales talent management is considered highly ineffective today in most CPG companies – only 9% of responses gave a rating of sales talent management activities as “highly effective” Stand-alone talent and diversity programs do not work; talent management must be closely tied to the rest of the organization and consistently applied Holistic sales talent management programs are scarce –Only 8% of CPG companies reported having a strong holistic sales talent management program Effective talent management blends formal process with personal engagement –Smaller CPG companies tended to be culture-driven; large CPG companies tended to be process-driven, whereas best-in-class companies combined both Incorporating a broad concept of diversity (demographics, experiences, perspectives) into corporate DNA drives innovation, enhances market insight, and increases access to top talent CPG companies are behind the diversity curve –Profile of participating companies - More male employees than US workforce - More middle-aged employees than US workforce - More Caucasian employees than US workforce Leading Sales Talent Management Practices HR Build The Right Sales Force Skills Drive a Consistent Message Focus on the Process and the Person Capture the Benefits of Diversity

11 A.T. Kearney 7/ /46814A What did we learn from the Sales Talent Management Study? CPG sales superstars have general management mindset – “thinkers,” not just “doers” Sales talent management is considered highly ineffective today in most CPG companies – only 9% of responses gave a rating of sales talent management activities as “highly effective” Stand-alone talent and diversity programs do not work; talent management must be closely tied to the rest of the organization and consistently applied Holistic sales talent management programs are scarce –Only 8% of CPG companies reported having a strong holistic sales talent management program Effective talent management blends formal process with personal engagement –Smaller CPG companies tended to be culture-driven; large CPG companies tended to be process-driven, whereas best-in-class companies combined both Incorporating a broad concept of diversity (demographics, experiences, perspectives) into corporate DNA drives innovation, enhances market insight, and increases access to top talent CPG companies are behind the diversity curve –Profile of participating companies - More male employees than US workforce - More middle-aged employees than US workforce - More Caucasian employees than US workforce Leading Sales Talent Management Practices HR Build The Right Sales Force Skills Drive a Consistent Message Focus on the Process and the Person Capture the Benefits of Diversity

12 A.T. Kearney 7/ /46814A Gender DiversityAge DiversityRacial Diversity (Sample of 31 Companies)(Sample of Companies)(Sample of 28 Companies) CPG companies should embrace inclusivity and diversity of thought to benefit from changing demographics Innovation Marketing Edge Access to Talent Diversity promotes innovation and resilience, which helps attract potential candidates and increase employee productivity Reflecting the population’s demographics helps improve market insights and marketing / product development To maintain access to the full talent pool in light of workforce demographic shifts, companies must provide a diverse work environment US Working Population: 54% US Working Population: 54% US Working Population: 23% US Working Population: 23% US Working Population: 71% in 2000; 51% in 2050 US Working Population: 71% in 2000; 51% in 2050 CPG Companies are Behind the Diversity Curve… Minorities are under- represented compared to US workforce Basic diversity programs are in place, but not integrated throughout Talent Management Lifecycle Source:US Bureau of Labor Statistics …but can benefit from highly diverse workforces

13 A.T. Kearney 7/ /46814A Study participants indicated diversity programs are in place – but most are stand-alone and not linked to broader talent management and corporate strategy … Diversity Tracking GenderRaceSexual Orientation Age …Targeted Recruiting GenderRaceSexual Orientation Age …Targeted Affinity Groups GenderRaceSexual Orientation Age Targeted Diversity Practices (% of Surveyed Companies Reporting Specific Diversity Programs) (n=26) (n=21) Source: GMA/NEW/A.T. Kearney 2009 Sales Talent Management Survey

14 A.T. Kearney 7/ /46814A Different mindset on sales talent expectations “We used to hire people in account management roles, and expect them to do it all—be successful, hit their numbers, grow the account. Now the primary question for sales people is: “How can you make full use of internal resources to help our company and its customers to succeed?” Driving strong performance and satisfying careers “The objective components of talent management [such as salary and bonuses] are easy. It is the emotional engagement that is harder to achieve. Depending too much on rigid, formal talent management activities will meet the letter, but not the spirit, of a talent management strategy.” Leveraging diversity to drive business “This industry is dominated by white males. Diversity means more than meeting a hiring quota, it means creating collaborative, sustainable and mutually-beneficial relationships.” What did CPG executives have to say? Quotes from CPG Sales and HR Executives

15 A.T. Kearney 7/ /46814A What did Retail executives have to say? Quotes from Retail Merchandisers How CPG sales people can differentiate themselves “CPG sales people differentiate themselves by leveraging their entire organizations to meet collaborative goals” –Retailers seek CPG sales forces that can team with them and provide support across functional areas to drive business performance Desired sales experience “We like to interact with general management talent with experience in different geographies, functions and categories” –Pushing product and pleasing the buyer is no longer sufficient. Retailers expect CPG Sales talent to not only provide consumer insight, category management and merchandising, but more of a general management capability to improve the overall business Desired sales skills “CPG companies with top sales force talent—people who think beyond their brand, the standard promotions and new product introductions, toward a collaborative relationship with tailored solutions for the retailer’s most important segments—will increase both the retailer’s and the CPG company’s sales volume” –Retailers look to CPG Sales talent for solutions, not just products and for diversity to fully penetrate the market

16 A.T. Kearney 7/ /46814A 34 CPG companies participated in the study – many requested an in-person debrief with Sales and HR leaders Food (23) Non-Food (9) Agencies (2) Retailers (8) Study Participants: Manufacturers, Sales Agencies, and Retailers

17 A.T. Kearney 7/ /46814A 1.Can you articulate your sales talent strategy right now? 2.Can you name the 3 things your top customer wants from your sales rep? 3.Do you have tailored skills and competencies by customer segments? 4.Does your sales force reflect consumer diversity? 5.Can you identify the next three potential heads of sales? 6.Do all your highest performing sales reps have experience outside of sales? 7.Do you measure sales talent management on your leadership dashboard? 8.Can your sales reps articulate the category strategy and shopper experience needed to sell more of your product? 9.Have you ever had to replace a sales rep at the request of a customer? 10.Do your customers tell you that you are helping them drive their business? “No” to any of these questions points to untapped opportunities to make your sales organization more effective                     Yes No                     Diagnostic: How strong is your sales talent management? How can you identify and act on Sales Talent Management opportunities in your organization?

18 A.T. Kearney 7/ /46814A Brian Lynch, Director, Sales & Sales Promotion/Industry Affairs Joan Toth, Executive Director Sales & Talent Experts Beth Bovis Donna Stella Melanie Mityas Julia Bouvet Jamie Ponce Marketing/Communication Jim Brown Sean Flynn Patricia Sibo Kevin Peschke Robert Hill, President & CEO Rena Holland, Group Director, Human Resources Sherri Toney, VP, Diversity & Inclusion & Engagement Denny Belcastro, VP, Customer Development & Industry Affairs A high level of collaboration made this study a success – Thanks to all!!! Study Team Members