Why is Simplicity Embraced by CPG Companies?

Companies involved in Consumer Packaged Goods (CPG) operate in an environment of low prices and high volume. They make packaged foods we buy for a couple of dimes to a few dollars.

This is an industry where margins matter.

So it’s not surprising that these companies embrace the value of Simplicity.

Consider three well-known companies.

Kraft – Kellogg’s – ConAgra

1) In their ‘Code of Conduct’ document, Kraft Foods defines 4 values. One of them is: ‘Keep it Simple’ which they define as:

“Make smart decisions quickly and move on. Do it well, once. Don’t let perfect be the enemy of good. Streamline cumbersome processes. Keep things loose and have fun.”

2) The Kellogg Company has 6 values. One of them is ‘Simplicity’ which they define as:

• Seek to continually simplify and improve processes, procedures and activities
• Work across organizational boundaries/levels and break down internal barriers
• Deal with people and issues directly and openly
• Prize results over form

3) In their recruitment brochure, ConAgra Foods touts 4 operating principles. One of them is ‘Simplicity’ which they define this way:

“Stripping away the unnecessary to focus on the things that will help us grow.”

If these companies all share the same value – simplicity – how does it make a difference?

It doesn’t. Directly.

The value of simplicity is often related to another objective.

• At Kraft Foods, simplicity is clearly linked to another value, “Make Tough Choices” which is defined as: “Make lean a competitive advantage.”
• At The Kellogg Company, the last part of the definition “Prize results over form” plainly links simplicity to another one of their values: “Results”.
• At ConAgra Foods, the answer is unmistakably stated in their definition of simplicity: “…help us grow.”

In other words, it’s about achieving growth and results.

So does this make the value of simplicity redundant? Not at all. It’s an important ingredient for CPG companies – and any other company where margins matter.

 

Do you think simplicity can stand alone as a differentiating value?

 

Today’s value was selected from the “Fairness-Respect” category, based on the e-book Developing Your Differentiating Value.