The retail industry has been squeezed on many fronts over the past decade, from Internet giants flexing their technology muscle (and willingness to not always turn a profit) to disrupt markets to fast-moving start-ups who are unencumbered by big company process, and who are able to attract strong technology talent.
As companies grow, it is an almost inevitable rite of passage that stricter processes are implemented, decision making becomes more centralised, and increasing layers added to the hierarchy. While in some measure these things can help an organisation to scale, they can significantly reduce an organisation's agility when it comes to embracing changing commercial landscapes.
Established retailers can take conscious steps toward adopting and embracing startup levels of agility, ideally without the relentless late nights.
We've observed 6 ways retailers can embrace start-up agility:
Particularly in large organisations, individuals and teams may not be fully empowered to deliver their program of work. Teams that are reliant on outside stakeholders for decisions or for additional support typically show a much lower level of performance than a team that is empowered and incentivised for end-to-end delivery.
Often this way of working involves pulling together cross functional teams - people from different areas of the business who are committed to delivering the same common goal.
The team as a unit should be incentivised for successful delivery of the goal. Aligning individuals personal development goals to the overall success of the delivery, and keeping the team small can ensure accountability levels are high. We'd suggest a maximum of 5 or 6 to a team.
When hiring, targeting people who have an entrepreneurial streak can be a real benefit. People who are not afraid to challenge the ideas of their seniors, and who are proactively looking to improve themselves can inject some additional energy into a team.
Examining the profile of a typical early-stage startup hire, you'd likely be looking at someone who wears many hats - a bit of marketing, a bit of operations, and hopefully a whole load of hustle. Even if they've never done it before, someone who's going to figure out what needs to be done to make important things happen.
Many established businesses are focused heavily on risk mitigation, with individuals rewarded for following safe strategies rather than challenging and innovating.
Where desirable, we see benefit in incentivising individuals and teams to take risks, to test new markets, and to help the organisation learn from this risk taking.
An organisation that primarily rewards people based on taking the safe, tried and tested path needs to be confident that they're not at risk from outside disruption.
Most retailers have long since built out a data capability. Extending this a step further, startups often approach their entire business model with a test-and-learn strategy:
- Come up with a hypothesis
- Figure out the smallest experiment that will prove this
- Run the experiment
This can be as micro as comparing the effectiveness of two POS promotions, the ordering of products on an e-commerce listing page, to testing an entirely new channel.
Too often, large organisations default to long purchasing cycles of "enterprise" software solutions. On top of the long purchase process, these solutions can also have long implementation cycles, leading to slow adoption of new technology.
In the startup world, new technology can often just be a credit card purchase away, and at the most extreme, involving just a small copy-and-paste to integrate with existing systems.
As a starting point, when looking to explore and prove new technology platforms, organisations could be encouraged to trial leaner Software as a Service packages in the first instance. Being able to launch a new platform in minutes or hours can offer an obvious advantage over waiting months or years for a global rollout.
If all else fails, retailers can resort to letting rogue teams loose in the organisation. Usually backed by a senior executive, the rogue team can be given a specific remit, often in exploring new markets and opportunities, and empowered to bypass usual corporate policies and processes.
While rogue teams can be a great way to deliver results in the short term, it could be argued that they're not a long term fix for more deep rooted organisation red tape and inefficiencies that exist for the wider company.
While these techniques are unlikely to turn an established organisations into a venture that can "turn on a dime", they can be steps towards adapting to change in a fast-changing landscape.