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Agilizing established companies to win the battling assault of startups.

January 11, 2019

These days most companies operate in highly dynamic environments. They need not just new products and services but also innovation in functional processes, particularly given the rapid spread of new start-ups that challenge the dominance of established brands. According to Boston Consulting Group, $22bn in industry sales transferred from large to smaller companies between 2011 and 2016. This hit has been reflected in the sales results of big corporation such as Nestle, General Mills or Kellogg’s. 

 

 

As a result, we see activist investors such as Nelson Peltz of Trian Investment Group or Dan Loeb’s Third Point taking part in the board of FMCG biggest companies to agilize their go-to-market and accelerate their growth. Their strategy has been either buying small startups like Unilever with Dollar Shave Club or transforming into fast-moving and adaptive organizations.

 

Nevertheless, as exciting as the latter sounds, turning it into a reality can be challenging. Established organizations need to balance stability and dynamism and quoting Wouter Aghina: Agility rhymes with stability. To succeed, established organizations need to maintain both stable and routine operations while supporting dynamic teams that stay close to customers and can adapt quickly to changing market conditions.  Rather than top-down organizations that work as a machine, agile organization operate like living organism where changes are quick, and leadership provides strategic directions. 

 

In fact, creating only isolated innovation teams may be appealing but will not improve organization responsiveness, thereby ending up with the same slow bureaucratic processes once those teams grow beyond a certain point. In Agile at Scale, Darrel K. Rigby, Jeff Sutherland and Andy Noble state that putting teams into offsite incubators does increase the odds of a team’s success, but it doesn’t produce the learning environment or organizational changes necessary.

 

Elqano creates transversal connections in which the backbone of the organization and the innovation teams can learn from each other. Employees simply need to type a question when they need market insights (from the operations team) or established efficient processes (form the innovation team) and we automatically direct them to the right expertise in the organization, across departments, locations and brands.

 

The result: rapid iteration and effective learning environment. Employees collaborate faster thereby creating, sharing and acquiring knowledge directly from one another.

 

 

 

 

In “Why Agility Pays”, McKinsey’s Organizational Health Index showed that companies with both speed and stability have a 70 percent chance of being ranked in the top quartile by organizational health. According to their study, the top management practice that differentiated the most from the least agile companies was Role Clarity which shows “powerful evidence that part of what makes agile companies special is their ability to balance fast action and rapid change, on the one hand, with organizational clarity, stability, and structure, on the other”.

 

Elqano fosters extra dynamism by creating a public network of empowered experts with robust communities of practice and active partnerships. Employees have clear and accountable roles and contribute to the network by providing expertise solely directed to getting work done rather than losing time and energy due to missing information and duplicated roles. This democratization of data proactively and immediately tackles any error, lack of clarity on roles and tensions within the organization.

 

Let us know in the comments how agile you believe is your organization to changing market environments!

 

 

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Elqano SAS

Technopole Izarbel,

45 allée Théodore Monod

64210 Bidart

Tel: +33 770 27 41 52

contact@elqano.com