What to do when smaller brands are beating us to market at four times the rate of our own innovation cycle? That was the question that the frustrated CEO of a consumer goods company posed to us recently as she revealed her organization’s painfully slow reaction to the new direct-to-consumer, e-commerce-driven market dynamics.
Organizing for speed has become a critical component in today’s consumer market as new technologies, trends and ways of shopping transform the landscape. This is especially true for large consumer goods organizations, which for decades created a successful model of brand building, mass marketing, and long-term product development.
But many of these companies, which are so good at global scale and synergy, are having a hard time refocusing on what’s needed today: reducing the time needed from product development to shelf, shortening payback periods on R&D investments, and capturing market trends and sales opportunities before competitors do. They also find it difficult to devolve responsibilities to local entrepreneurs, who have their finger on the pulse of local tastes more than headquarters ever can.
What is the best foundation for an agile operating model to innovate quickly and cheaply, test products and services in the market, refine them, and release them to consumers faster? We believe the answer is to focus on employees—the most important asset of any consumer goods company, even before the brands. An agile workforce should be central to any CEO agenda.
To apply faster ways of working, here are six things consumer companies must get right:
- Give power to your people: Successful companies increasingly ask employees to apply their own judgment and actively drive their organization’s success. To do this without fragmenting decision-making and slowing things down, allow agile teams the necessary authority to get things done.
- Foster an entrepreneurial mindset: Form smaller, cross-functional teams that pursue their own ideas (and get a budget for it). With more liberty comes more responsibility: Failing is encouraged, but if it happens too often, consequences follow. Fast companies ask their employees: If you were the owner, what would you do?
- Make change personal: Inspiring role models embody specific ideas in a meaningful and visible way. What might initially be perceived as a marketing slogan (e.g., a customer-focused entrepreneurial way of working) easily comes to life when demonstrated in person.
- Offer a change narrative: A well-tailored narrative of how the company plans to shift its model helps employees grasp what must be changed and supports the transformation process.
- De-stack and de-clutter: Eliminate unnecessary meetings, events and travel, allowing people to focus on what really matters. Daylong meetings with 20 people—15 of whom should not be attending—do not occur and employees travel only when a video conference or telephone call is not an option.
- “Let go” in a healthy way: Where necessary, maintain control over brands, marketing budgets and decision rights from a global perspective; where possible, allow your countries to seize granular growth opportunities through local, entrepreneurial activities.
Converting to a fast and agile company is tough. It requires drastic changes to the operating model and a cultural break. Changing employees’ mindsets, behaviors and ways of working is the harder of the two.
Employees possess a remarkable appetite for change when they see a better, more empowered version of themselves emerging from the process. This unleashes an incredible amount of new energy that can be harnessed to drive the organization toward success.