LA EMPRESA UNIPERSONAL

In order to undertake in-depth interviews that would provide significant data, seven companies that were members of the FGC were selected for interview. They were selected because they represented different parts of the industry in terms of:

Company structure and size (number of employees)

Company Structure No of staff

A New Zealand arm of Global corporation 1,100

B New Zealand arm of Multi-national corporation 200

C Zealand Listed Company 1,000

D Medium-sized privately owned New Zealand company 120 E Recruitment agency specialising in the FMCG industry N/A F Medium-sized privately owned New Zealand company 100

G Zealand Listed Company 9500

FMCG industry sector and participation in FGC KAM courses

Company FMCG Sector FGC Course participation

A Beverage Never participated

B Health & Beauty Never participated

C Daily Fresh Never participated

D Sales Agency Highest participator

E FMCG Recruitment Part of original design team

F Confectionary Never participated

G Commodities Occasional participants

Companies A, B, C, D, F and G all manufacture and/or sell product within New Zealand and hence can provide insight from “within” the industry. However, they differ

significantly in size, products they produce and hence sector of the FMCG industry in which they operate. As a group, they represent the whole range of companies currently operating in the New Zealand FMCG industry. By contrast, Company E is a consultant and provider of service to the industry. Hence, whilst this company has been intimately involved with the industry for 25 years, it actually works “outside” of the industry, looking in. Consequently, it was included in the investigation because it deals regularly with different companies operating in the industry and therefore has a “helicopter” view of the industry as a whole. In addition, the interviewee from this company was one of the original proposers and designers of the FGC courses. Companies A, B, C, F and G have never sent any of their staff to the FGC KAM courses, whereas company D is the highest user of the courses.

Interview schedule design

The starting point for designing the interview schedule was identification of four major topic areas which were germaine to the “short courses for staff training” focus of the investigation. The categories were intended to “drill down” from a focus at industry level, to company level, to the current undertakings with the company and finally to the actual course level (specific requirements for course design). The topic areas were therefore:

a) Industry training needs b) Company training needs

c) Training currently undertaken the interviewees company d) Preferred course design and structure.

A series of questions were then developed to interrogate the interviewee’s position about these four major topic areas. Questions about the FGC Education Project were also included in this schedule to collect the data required for the case study presented in addendum to this report. The interview schedule and full transcripts of the interviews are presented in Appendix to this report.

The information collected using these methods to interview six senior managers of FMCG companies are analysed and the results are presented in the following chapter in two broad areas: the industry’s training needs and company’s training needs.

CHAPTER 4: RESULTS

Seven companies were canvassed for interviews, five accepted and two (companies F and G) declined – a 71.4% response rate. The following pages present the results from interviewing two CEO’s, a Managing Director/owner, a Director of Human Resources, an HR Manager and a Director/Consultant who specialises in recruiting management staff for the FMCG industry. In reading these results it is important to recognise that to obtain meaningful results from the interviews it was essential that the interviewees were completely open and honest in their answers. However, some of the questions asked required them to provide “commercially sensitive” material on subjects such as market strategies, competitor analysis, competitive advantage and staff competencies. Consequently, all of interviewees were assured that this research would be documented so that readers will not be able to identify the individuals interviewed or their company. Prior to, and during the interviews, individual interviewees sought, and were given, assurances that this was the case. For this reason, in the following documentation, the companies are referred to as Company A – Company E.

In addition, while an interview schedule was followed during the interviews, where an initial answer to a question needed further elucidation, the interviewee was asked supplementary questions. Similarly, where a particular question clearly had no relevance to an interviewees company, or they had already answered it in their response to a previous question, they were not asked that question. For example, the CEO of Company D was not asked questions about the industry in general. He made it clear from the start of the interview that as his is a small company that is his focus, and he does not have any firm views on the industry. Similarly, as Company E is a company which provides recruitment services to the industry there was no point in asking that interviewee questions about specifics of suppliers “operational” factors.

The Industry’s training needs.

The focus of the “industry” investigation was to determine the current status of skills and knowledge of people in the industry and from that identify whether there is a need for training throughout the industry. If there is such a need, what is driving it (e.g. lack of suitably trained people to meet industry needs) and in what topics and at what level is the training needed (short courses to tertiary education). From that, are there sufficient courses currently available in the market place to meet the demand, or do new ones need to be developed and who should develop and/or deliver those courses (in-house training, private providers, tertiary institutions). Finally, are there any unique industry factors that warrant development of a dedicated University qualification and if so is there a need to set up a staircase to take employees from basic (short course) training to that University degree.

The responses to the various questions identified several consistent themes. From an industry perspective there is a definite shortage of “good” FMCG people in certain disciplines but it varies according to management level and over time. All respondents identified a shortage of experienced and well qualified, mid-management, Sales staff – particularly Key Account Managers and Regional Sales Managers. By contrast there is no shortage of lower level “front line” Sales staff (Sales Representatives) probably because the recruitment bar is low. Logistics and Supply Chain Management and Operations staff are also hard to find. However, despite identifying an industry wide shortage of staff in some disciplines, all of the interviewees said they do not have any problem recruiting staff for any discipline or management level for their own company. They all stated “people want to work for our company.” This exemplifies a consistent “us and them” attitude among the interviewees that was both explicit and implicit in their responses to various questions, to the effect that “the industry needs this, but my company does not need it.”

The recruitment specialist (Company E) noted that the need for training is greater now than ever before because of the increased skills needed by Sales staff. He exemplified “the negotiating that Territory Managers /Sales Reps have to do is far more significant in terms of the proportion of a company’s business and the scale and weight of deals going through than ever before. Now Territory Managers need the skills to sell B-trains of toilet

tissue into one store, whereas previously all they had to do was pop in to a store to make sure things were on the shelf. Now they need the skills and ability to do business.” In addition, he specifically addressed the “time” factor. He noted that the availability of skilled and trained people (graduates) in the FMCG industry varies considerably over time and is dependent upon the economic environment of the sector. For example, trained people are scarce in a recession when New Zealand companies relocate their operations off-shore, usually to Australia and employees either follow the jobs overseas or move into other industry sectors.

There was general agreement (4 out of 5) that there is a need to raise the education standard across the whole industry, and hence a need for training. Similarly, all respondents identified Sales training as the main priority, with commercial understanding, particularly the impact of individual’s decisions on the business as a whole as a second priority. A variety of other subsidiary subjects were also identified: leadership, productivity, people management skills, commercial and financial skills, category management, marketing, In terms of the level and focus at which training should be targeted, there was strong support for training that helps staff do their job better (on-the-job training and/or industry focused short courses) as opposed to formal Tertiary education to improve their knowledge level and thinking capability (University qualifications).

Reasons for this selection varied, but time factors were often recognised. Company B which only employs University qualified people, did not believe further post-grad qualification would improve performance and that a University qualification is irrelevant for people who have been in the industry for a long time. Company E identified the need for short courses, Certificates and Diplomas but not part-time Degrees as they upset peoples’ life dynamics – they take so long to complete other things, such as family life, often get in the way and prevent people from completing the degree. However this company recommend Post Graduate qualifications for senior, experienced people as they can be completed in 2 years. One respondent (Company C) was firmly in favour of education as a “whole of life” commitment. “You should undertake tertiary education at 2 or 3 levels through out your career (Bachelor at start of career, Masters late 20’s early 30’s, Doctorate mid 40’s), intertwined with on-the-job training and short courses that are tailored to your industry. Several respondents cited budget restrictions as a factor in their

position – “businesses are happier to commit their staff to shorter term courses rather than allowing a longer degree commitment. What is needed is less courses more frequently” (Company B).

There was a general consensus that there are sufficient (one suggested there are too many) courses currently available in the market place. However, since most are “stock standard courses” (sales training, computer skills, presentation skills, project work) FMCG companies do not use them because they are too generalised and “not FMCG specific”. It is only for specific areas (such as IT) that require something highly technical that there are problems in supply (Company B).

In addition, there are many multi-nationals operating in the New Zealand FMCG industry and they all have standard In-house courses, prescribed by international directives and designed to train and develop staff in the company’s way of doing things. Consequently 80% –90% of their training is “in house” using peers or direct managers and external providers are only used for specific topics or reasons and those are the exception to the rule (Company B).

Company C commented that “there are too many (courses) but a number of them have no credibility, as the privatisation of training (e.g. in Australia) has devalued the whole concept of training.” This raised the concept of course provider credibility and the need to have courses delivered by accredited course providers.

The general consensus (4 of 5) was that the involvement of a University in course provision adds some credibility but it is not essential. Company A had used courses from the New Zealand Institute of Management, Auckland University, Employers and Manufacturers Association, Sugar, and a whole myriad of other providers who “did a good job.” For Company D courses that are FGC approved and focus on the industry is more important than who provides it or where it is being held. Company A saw University involvement as beneficial, but not critical and had used Auckland University’s short courses as well as private providers such as Sugar. Their selection criteria were fit with their business, content and the price had to be right. For Company E a mix of professional providers and the industry was required. In this mix private providers need a University link because that adds some weight and credibility, but overall training for the

industry needs to be driven by the FGC because of their industry focus. The downside of this mix however was that whilst Universities add credibility and the FGC industry focus, both organisations are busy and hence not great at moving things along. Hence it needs a private provider or facilitator in the middle to shake things along and make them happen. The dissenting response was from Company C for whom the key factor was course credibility and credibility was defined as certification and alignment with a credible tertiary education institution. For him a Certificate of Management from an FMCG school of business is worthless unless it has accreditation with a listed provider and short course programmes must be run by a reputable (University) school with completion of the short courses counting towards a University qualification.

There were differing views expressed about the “uniqueness” of the FMCG industry. The recruitment specialist (Company E) was unequivocal in his support of the uniqueness of the industry and gave reasons for his position. “In any job in any industry sector there are three critical factors you need: Skill Set, Sector knowledge, Channel to Market (type of sales behaviour). The FMCG channel to market has different factors compared to other industries. So in the FMCG industry the way of doing the business, particularly in sales (how you sell the product to the customer) is different. Hence for people to transfer from another sector to FMCG they have to learn the different parameters of the FMCG channel to market. This is a significant barrier for people wanting to enter FMCG at anything other than basic entry level.” Another respondent (Company C) absolutely refuted the concept: “my sales director is from pharmaceuticals….and the most successful state sales manager in out.

Other respondents were ambivalent. For example, “our company identifies as being in the FMCG industry but in reality part is, but the other half is in the pharmacy market….consequently we do not stereotype people as “FMCG” or not…..we have a number of people who are now in the FMCG industry arena who were not FMCG originally” (Company B). Another response more clearly identified a conflicting position. The statement against the concept was “we have had significant degrees of success with people who have come from other sectors” but in favour of it “but it depends where you come in from …..it (that special features exist) is not a blanket statement it depends on the specific role, it may apply in senior sale positions.” (Company A).

There was an even split (2 for, 2 against and 1 uncommitted) about whether the perceived “unique” characters of the FMCG industry warranted a dedicated FMCG degree. One respondent (Company B) supported the concept provided it contained some papers skewed towards FMCG specific topics (negotiation, HR and Leadership) supported with some “standard” papers in marketing, retail industry, supply chain management, and Departmental decisions that affect overall company profitability. The other supporting respondent (Company E) noted a “definite need for a Sales and/or Key Account Management course at that (degree level)”, but questioned whether the New Zealand FMCG industry has the scale and scope of people for it to be viable.

The argument used by both respondents against the concept was that it is unclear what the purpose of such a degree would be. One noted that FMCG is an acronym for the products produced, but has nothing to do with how they are manufactured, sold, marketed or the transport/logistics systems used. He noted that an FMCG company is in reality a collection of people with qualifications in disciplines such as accountancy, marketing, Logistics and Supply Chain management, and HR, who just happen to work in a certain industry. There is no military degree for the military and no packaging degree even though packaging is enormous in the FMCG industry (Company A). The other argued similarly that the requirements of different sectors of the FMCG industry are so varied that there can not be a “one-fits-all” FMCG industry qualification. He exemplified that the content of a qualification for the news print industry, which picks stock to zero each day, would not be relevant for companies in other sectors such a Pernod Rickard (alcohol distributors) who carry large stocks over extended periods (Company C). The uncommitted respondent (Company D) noted that qualifications did not matter to the company, but “receiving the Certificate matters to our people who have attended courses.”

With some provisos, all respondents supported the concept of staircasing from industry specific short courses to a degree in the event that a University set up a degree with sufficient relevance to the FMCG industry. The proviso for Company D was that the whole of the staircase be delivered by one institution, preferably Tertiary, rather than a number of different providers. For Company B the proviso was finance and “who pays”. Because the company took a short term focus for junior to middle managers and training budgets were small and continually squeezed, the company might support staff on the

short courses in the staircase where they can see an instant return on the training investment. However, they would not provide financial support beyond that initial stage, staff would have to finance themselves. The exceptions would be outstanding middle managers who have General Management potential for whom the company take a long term perspective and would fund them through the staircase as a way to ensure that they keep them in their business. For Company D the proviso was that short courses on the staircase should count towards a credit to the University qualification.

Company A has a long history of running its own, in-house, sales programmes and was one of the respondents against the set up of FMCG specific tertiary qualifications. The respondent prefaced his support for the staircase concept with a caution: “If you believe that there is a need for such industry wide training then such a staircasing structure to deliver that need seems to make eminent sense.” However in providing this answer his tone and body language implied that he did not believe there is such a need. For this company to support a staircase it would have to have “relevance and currency” to what their business was trying to achieve with their staff. In particular, this company uses their people development as a competitive edge because “it is the thing that sets us apart