Satish Nambisan - The Digital Multinational: Navigating the New Normal in Global Business

Management on the Cutting Edge series

Robert W. Holland Jr., series editor

Published in cooperation with MIT Sloan Management Review

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Designed for Digital: How to Architect Your Business for Sustained Success

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Open Strategy: Mastering Disruption from Outside the C-Suite

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The Transformation Myth: Leading Your Organization through Uncertain Times

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Winning the Right Game: How to Disrupt, Defend, and Deliver in a Changing World

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The Digital Multinational: Navigating the New Normal in Global Business

Satish Nambisan and Yadong Luo

Satish Nambisan and Yadong Luo

Foreword by Conny Braams

The MIT Press

Cambridge, Massachusetts

London, England

2022 Massachusetts Institute of Technology

All rights reserved. No part of this book may be reproduced in any form by any electronic or mechanical means (including photocopying, recording, or information storage and retrieval) without permission in writing from the publisher.

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Library of Congress Cataloging-in-Publication Data

Names: Nambisan, Satish, author. | Luo, Yadong, author.

Title: The digital multinational : navigating the new normal in global business / Satish Nambisan and Yadong Luo; foreword by Conny Braams.

Description: Cambridge : The MIT Press, 2022. | Series: Management on the cutting edge | Includes bibliographical references and index.

Identifiers: LCCN 2021000760 | ISBN 9780262046329 (hardcover)

Subjects: LCSH: International business enterprisesTechnological innovations. | Regionalism. | Globalization.

Classification: LCC HD2755.5 .N38 2022 | DDC 658/.054678dc23

LC record available at https://lccn.loc.gov/2021000760

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To Ashok, Bharat and PriyaSatish Nambisan

To Rosalie, Edward and JadyYadong Luo

The world does not lack for management ideas. Thousands of researchers, practitioners, and other experts produce tens of thousands of articles, books, papers, posts, and podcasts each year. But only a scant few promise to truly move the needle on practice, and fewer still dare to reach into the future of what management will become. It is this rare breed of ideameaningful to practice, grounded in evidence, and built for the futurethat we seek to present in this series.

Robert W. Holland Jr.

Managing Director

MIT Sloan Management Review

When Satish and Yadong invited me to write a foreword for this insightful book, my team and I had just presented Unilevers accelerated digital transformation strategy to the board. Timing is everything, or toeval bestaat niet, as we say in Dutch (there is no such thing as a coincidence)! A year had passed since I had been appointed to the role of chief digital and marketing officer (CDMO), a position newly created to transform Unilever into a future-fit, purpose-led digital organization at the leading edge of marketing, serving our multistakeholder model while keeping consumers front and center.

Many have asked me whether I think it is good or bad timing that I started my role just weeks before the onset of the COVID-19 pandemic, which suddenly made everything more volatile, uncertain, ambiguous, and complex. There is a strange dichotomy in the fact that though 2020 was filled with many growing and continued hardships, which had a personalized impact on everyone, at the same time, from a professional perspective, the pace of change, the acceleration of existing trends, and the creation of new ones filled me with energy, focus, and a clear sense of direction.

After instinctively putting the safety of our people first, we then carefully considered the key trends that are likely to shape consumer priorities and behaviors in the future normal and, in turn, our strategies and practices to add value in the market. Two such trends are worth pointing out: the e-commerce boom and the rise of the cautious and conscious consumer. These trends did not originate due to the pandemic; rather, the pandemic accelerated what has already been happening for some time now.

With greater numbers of consumers preferring to shop online globally, e-commerce rapidly accelerated by over 60 percent year on year for Unilever. I fully expect this consumer behavior to keep growing in trend, giving rise to new market opportunitiesfrom pure digital plays to omnichannel strategies, both requiring greater levels of innovation in product and brand offerings, not to mention higher consumer expectations for brand experiences online. We are already witnessing a surge in data-driven marketing to meet new and more personalized demands. It is also clear that the rise of e-commerce demands more operational flexibility at all levels of an organizationfor example, supply chains that can accommodate smaller minimum order quantities, more frequent runs, and more bundling, or innovations needing higher value density, leading to further concentration in, say, home care products. Thus, e-commerce calls for end-to-end digital strategies that incorporate not just marketing and sales but also R&D, supply chain, analytics, and factory operations. This only strengthens the imperative to build a truly digital organization.

The second trend of a more conscious and considerate consumer increases the emphasis on the dual nature of value. In times of uncertainty, people often choose brands they trust, for both their value and their values. Value in terms of offering the right value equation and remaining affordable, and values in the sense of having a point of view that drives action on matters people truly care about. Brands are now expected to be active partners in serving both consumer and societal needs, and businesses are trusted to do so. The 2021 Edelman Trust Barometer revealed that business is the only institution deemed competent and ethical, while trust in other institutions, like governments and media, is down. It is therefore the responsibility of business to rise to the occasion and live up to the trust instilled in us by the people who buy our products.