PREDICTION IS HARD. THE LONGER the time range — six months, three years, a decade — the less reliable any forecasting becomes. And yet, some companies prosper through extreme uncertainties.
Consider cosmetics giant L’Oréal. When COVID-19 unexpectedly struck the world, consumers rapidly shifted to online platforms. Many companies were unprepared, but L’Oréal quickly adjusted, ramping up digital efforts to offer beauty products and services online. Use of its virtual try-on technology increased by a factor of five, and conversion rates from virtual try-ons tripled. This pivot not only supported consumers but also aided retailers such as Amazon and Sephora, which adopted the technology for their sales of L’Oreal products. In addition, the digital team added functionality that allowed beauty influencers to host livestreaming events on L’Oreal’s own website.
L’Oréal’s swift response can be traced back to its 2018 purchase of ModiFace, which develops advanced augmented reality and virtual reality technology for the beauty sector. During the pandemic, it worked with 27 key strategic partners representing 30 countries to make ModiFace available on their websites for applicable L’Oréal brands, facilitating integration via a software development kit. Thanks to its modularized capabilities, the company was able to move quickly to capitalize on unexpected trends in the midst of a highly uncertain environment.
Our ongoing research shows that increased unpredictability and rapidly changing conditions demand that executives strategize at a higher level. Rather than focus solely on products and markets, leaders must develop the ability to discover and act on a company’s options — what is known as optionality — and to scale new initiatives quickly. That will position them to rapidly adjust to unforeseen market shifts, as L’Oreal did.
Bu hikaye MIT Sloan Management Review dergisinin Summer 2024 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Giriş Yap
Bu hikaye MIT Sloan Management Review dergisinin Summer 2024 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Giriş Yap
Ask Sanyin: How Do You Build for an Unpredictable Future?
While the pandemic was a wild ride of uncertainty for me and many of my peers in leadership, it feels like we never regained our footing.
What You Still Can't Say at Work
Most people know what can’t be said in their organization. But leaders can apply these techniques to break through the unwritten rules that make people self-censor.
Make Character Count in Hiring and Promoting
Most managers focus on competencies when evaluating candidates but it’s character that will transform the DNA of the organization. Here’s how to assess it.
Why Influence Is a Two-Way Street
Managers achieve better outcomes when they prioritize collaborative decision-making over powers of persuasion.
Know Your Data to Harness Federated Machine Learning
A collaborative approach to training AI models can yield better results, but it requires finding partners with data that complements your own.
How Integrating DEI Into Strategy Lifts Performance
Incorporating diversity, equity, and inclusion practices into core business planning can provide a competitive edge.
The Myth of the Sustainable Consumer
Companies that understand the different kinds of consumers for sustainable products can market to them more effectively.
A Practical Guide to Gaining Value From LLMs
Getting a return from generative AI investments requires a systematic approach to analyzing appropriate use cases.
Improve Workflows by Managing Bottlenecks
Understand whether process or resource constraints are stalling work.
Craft Schedules That Work for Everyone
Business leaders can improve retention and business performance with schedules that make sense for workers’ lives.
