Welcome to 2026 and Happy Business Acumen!
In my opinion, there are a few recent corporate stories that offer as many business acumen lessons
as what has happened to Kraft Heinz, which I think you will find fascinating and will get your brain back on the business acumen track.
In our business acumen workshops, we teach participants to understand three foundational elements of any business:
- Strategy – How the company chooses to compete and win
- The value proposition – Why customers choose one product or brand over another
- Financial management – The scoreboard that ultimately measures revenue growth, profitability, free cash flow, and shareholder value
Many of our award-winning business simulations are intentionally grounded in reality. They are not abstract exercises; they are built from real companies, real industries, and real leadership dilemmas.
One of the most classic and challenging scenarios embedded in many of our simulations cuts across industries:
How do leaders manage a large, legacy business when competitors are nipping at their heels?
When you are the incumbent, the choices are rarely simple. Do you defend margins or invest for growth? Cut costs or reinvest in innovation? Protect scale advantages or disrupt yourself before someone else does? Every option carries risk, and none come with guaranteed outcomes.
The Kraft Heinz story is not about a single bad decision. It is about years of small, defensible decisions that compounded into strategic drift. That is exactly why it is such a powerful business acumen case.
From this story, I see five critical lessons that apply far beyond packaged products and should resonate with leaders in almost any industry:
Lesson 1: Cost Discipline Is Not a Strategy
Few companies executed cost control as aggressively as Kraft Heinz following its 2015 merger. Zero-based budgeting, plant closures, headcount reductions, and margin expansion were treated as proof of operational excellence.
And for a while, the financial scoreboard rewarded it.
But here’s the core lesson: cost discipline only creates value if it funds a competitive advantage, such as becoming the low-price player (which Kraft Heinz would never do). When cost-cutting becomes the strategy rather than an enabler, organizations hollow out the very capabilities required to grow brand building, consumer insight, innovation, and sales execution.
In our simulations, this is the moment when participants proudly show improved margins, only to realize two rounds later that demand has quietly eroded!
Lesson 2: Legacy Brands Are Assets—But Only If You Reinvest in Them
Kraft Mac & Cheese wasn’t broken. It was iconic, beloved, and massively profitable. That made it easy to defer hard decisions.
But consumer expectations do not stand still just because a brand is iconic. Health perceptions, ingredient transparency, flavor innovation, and emotional relevance all evolve, especially among younger buyers.
The business acumen trap is assuming scale equals safety. It does not!
In simulations, legacy products often generate reliable cash flow early. Teams that treat that cash as something to extract rather than reinvest inevitably lose relevance. Kraft Heinz learned this lesson as smaller, more agile competitors redefined what “better” looked like, without needing to win the entire category.
Lesson 3: Financial Metrics Can Mask Strategic Erosion
For years, Kraft Heinz could point to strong operating margins and shareholder payouts. The numbers looked good. Until they didn’t.
This is a classic example of why financials are lagging indicators.
Market share loss, retailer frustration, brand fatigue, and capability erosion show up long before revenue collapses. But if leaders are only watching income statements and margin percentages, those signals are easy to miss—or rationalize away.
In business simulations, we teach participants to monitor early-warning indicators as closely as quarterly results. Kraft Heinz illustrates what happens when leaders wait for the P&L to force action.
Lesson 4: Organizational Chaos Is a Strategic Liability
One of the most underappreciated elements of the Kraft Heinz story is internal instability. Frequent restructurings, leadership turnover, unclear decision rights, and shifting priorities created an environment where good ideas struggled to survive long enough to matter.
Execution excellence depends on clarity, continuity, and ownership.
Even when teams identified opportunities—new formulations, premium extensions, healthier variants—the organization often couldn’t move fast or decisively enough. Meanwhile, smaller competitors with far fewer resources were able to act, learn, and adjust in real time.
In simulations, this shows up when teams keep changing direction mid-round. The data doesn’t lie, organizational volatility produces volatile outcomes.
Lesson 5: Recovery Is Always More Expensive Than Prevention
Today, Kraft Heinz is investing heavily to rebuild product relevance, innovation credibility, retailer trust, and consumer confidence.
That investment is necessary, but it is also far more expensive and risky than steady reinvestment would have been.
This is one of the most important business acumen lessons we teach: turnarounds consume more capital, leadership attention, and organizational energy than disciplined evolution ever does.
In simulation terms, Kraft Heinz waited until the system was flashing red before pulling growth levers. By then, the range of outcomes had narrowed.
The Bigger Learning
The Kraft Heinz case is not a warning against efficiency, scale, or financial rigor. It is a warning against confusing financial optimization with value creation.
Strong businesses balance:
- Cost discipline and growth investment
- Brand heritage and reinvention
- Short-term performance and long-term relevance
That balance is tricky. That tension is real. And that is exactly why we build it into our business simulations. Because in the real world, as Kraft Heinz demonstrates so clearly, there are no easy answers. Only trade-offs.
