It is our experience that companies, like people, have personalities: some are extraverts and others are introverts. However, while people tend to be one or the other, companies can be both – acting like an introvert in regard to one aspect of business while behaving as an extravert in another.
There are advantages to both approaches. To maximize opportunities and avoid pitfalls, companies need to understand their cultural tendencies and understand how this shapes their approach to business.
Building extravert corporate traits, however, is more difficult than building introversion.
The benefits to an extraverted approach are considerable. These companies have a clearer understanding of what is truly going on in the market and can catch opportunities quickly. Their focus on cultivating diverse perspectives and openness to exploration also provides a strong base for capitalizing on those opportunities.
As an example, while introverted companies rely on consumer surveys or focus groups to understand the market, extraverted companies have senior and junior executives engage in market visits and on-the-ground research. This applies not only to marketing and other commercial executives.
For one of our clients, this practice extends all the way to the top. Take the example of the Latin American CFO who joined us on a market visit in the Dominican Republic to better understand what was happening on the ground. He was out chatting with consumers at midnight in San Pedro de Macoris as they were partying along the malecon–why were they changing their repertoire?
Meanwhile, the supply chain VP was interviewing truck drivers who were doing late night store drops–why did they have such high service level? Being out and about is a way of life for this hugely profitable company.
Introverted companies, on the other hand, have a strong handle on internal processes and focus on development from within. This results in sophisticated organizational capabilities and a coherent plan forward. However, companies that are too introverted risk missing changes in the industry and are slower to adapt their approach.
For example, introverted companies tend toward home-grown executives with long careers in the company itself. This results in a deep-seated understanding of the company’s capabilities, but also can lead to complacency and biased thinking.
At one U.S. client, the executive responsible for the African business lamented that she had never been able to bring headquarters’ executives to the continent. There was always something internal and local that was more important. Yet the African middle class is about the same size as the U.S. middle class—the consumers the company caters to.
What we have observed over the years is that although most FMCG companies claim to be consumer-facing, in practice most are inward looking. Based on our experience, we estimate that only 10% of FMCG companies strike a balance between strong internal and external perspectives.
Corporate culture has enormous power to shape company development in everything from recruiting preferences to strategic focus. Different styles present unique challenges and opportunities, and understanding what this means for one’s own company can have a far-reaching impact on improving growth strategy.
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The correct spelling is extravert, not extrovert. Carl Jung, who invented the term, noted that “it is extravert, because extrovert is just bad latin.”