Agile CPG Companies
Two large CPG companies that successfully implemented "agile" are Coca-Cola and Unilever.
Overview of what Coca-Cola Did
- To become more agile, Coca-Cola underwent various changes that included how the company worked internally.
- James Quincey CEO of the company said that “We must be much more agile, get things to market quicker, test and learn; if they don’t work, move on. If they do, take them to the next stage.”
- To achieve the vision of the CEO, the company had to adopt the mode of operation of tech companies. This involved changing the long time the company took to invent new products in order to achieve perfection. The company, therefore, decided to adopt the test and learn method.
- Additionally, the company is adopting a new “make it happen” motto. The motto empowers employees to take smart risks and accept the outcome of the risk even if it was not successful. The company has gone a step further by awarding innovative failures through Coca-Cola’s Global Innovation Awards.
- Another thing that Coca-Cola changed in order to be more agile was its organizational structure. The company flattened its organization. It did this to enhance faster and more effective decision-making.
- Coco-Cola is also training its associates in agile practices and forming agile teams that can handle strategic priorities. Leaders in various positions in the organization are implementing agile principles.
Why Coca-Cola Adopted Agile
- Coca-Cola opted to adopt "agile" because it needed to match the speed by which consumers taste change. It also did this to keep up with new buying habits that are evolving at a fast rate.
- The company also adopted "agile" to remain relevant to a diverse and rapidly moving marketplace. Adopting Agile was a step in ensuring that the internal organization becomes more curious, empowered, and innovative.
- One area that "agile" affected the company was the product launch. The company was able to launch new beverages to the market at a more rapid pace.
- Initially, Coca-Cola could take up to 52 weeks to launch a product. The launch also had very high stakes dependent on its success.
- However, adopting "agile" has reduced the product launch period by half. The company can now launch a product in just 22 weeks. An example was the launch of Coca-Coal Zero that was launched in 22 weeks.
- The change in structure also promoted creativity and innovation. It fostered an entrepreneurial culture in a company that allowed employees to learn and adjust quickly.
Overview of what Unilever Did
- Unilever, in order to become agile, started by collapsing its organization matrix. The goal was to move decision-making down the chain of command, thus creating a less-cluttered organization environment.
- Unilever, therefore, decided to decentralize its operations. It did this by creating three global divisions, which are beauty and personal care, home, and food and refreshments.
- It empowered each division with the power to make decisions without needing approval from other executives.
- The divisions were also tasked with developing innovation, which includes strategy, research, product development and advertising.
- The company also created cross-functional teams dubbed “country category business teams” (CCBTs).
- CCBTs need only to report directly to one of the company’s global divisions. The teams were also given the freedom to spend a percentage of the company’s innovative budget on local initiatives without having to ask for approval from executive officers.
Why Unilever Adopted Agile
- Unilever created the three divisions in order to be more agile and increase competitiveness in their markets.
- The reason was to make the Unilever a more consumer-facing company that had the ability to roll out global innovations faster. Additionally, it wanted to become more agile in responding to local trends.
- According to Unilever CIO Jane Moran, the company used "agile" to balance growth, innovation, disruption, and legacy in the company.
- The CIO also acknowledges that the consumer packaged goods industry is ever-changing and has a lot of disruptions.
- Through the creation of CCBTs, Unilever was able to eliminate the duplication of roles between global division and regional divisions. It was, therefore, able to save money by creating an agile process through CCBTs.
- The company was also able to successfully devolve power and reduce regional clusters that were increasing its operational costs.