How flatter organizations and data-driven decision-making empower cultures of agility

This article is part of a broader series, detailing why “intelligent enterprises” are the future of the retail and consumer products industries. Our previous article in the series discussed how companies can use AI to improve their workforces. 

 
Economic headwinds, shifting customer preferences, and major technological disruptions (currently led by AI) are hallmarks of today’s business environment. As a result, companies struggle to keep up with the pace of change. This is especially true of the retail and consumer products (CP) industries, where many struggle mightily with agility. 

Organizations with agility issues tend to fall into one of two categories: 

• Businesses that are resistant to or take too long to change.
• Companies that run on feel or instinct and change directions too frequently to make meaningful progress. 

Yet, agile cultures are critical to navigating these turbulent times. And while the retail and CP industries often talk about the benefits of “agile,” there isn’t enough discussion about how and when to leverage that capability.  

Three internal steps to building agile cultures 

Agility is all about incremental progress—before investing heavily in new operational efforts, companies need to break plans down into smaller steps. A hallmark of an agile culture is the ability to fail fast—or as we like to term it, learn fast. Diving into a new initiative for six months to eventually realize you’re heading the wrong direction is wasted time and effort. Companies must iterate in smaller pieces—across two-week speed bursts—to learn quickly if they are on the right track and addressing the right problems. If not, they can quickly correct course. 

Company culture is also crucial. It’s important that leaders can admit they don’t have all the answers from day one, and that’s ok. Businesses need to focus on making the best decisions they can based on the information they have in the present, and continue learning and reacting as they go. Once companies nail down a process, they can then automate it to boost time-to-value.  

These three steps are strong starting points to ensure your organization grows its agility muscle:
 

1. Align leadership and organizational structures 

Leaders need to clearly communicate the importance of agility and its role in achieving an organization’s goals. They should exemplify agile behavior by making quick decisions and embracing change and continuous improvement. The best leaders empower employees to make decisions, encouraging a sense of ownership and accountability. 

From an organizational perspective, flatter structures reduce decision-making bottlenecks and enable faster communication. Companies should ensure employees can see the bigger picture and flex as needed, offering their unique perspectives to solving challenges. Flexibility is especially important for groups working on innovation, where speed-to-market is critical. Separating these teams from the rest of the business allows them the bandwidth and creativity to dream up new solutions without getting caught up in bureaucratic drag.  

2. Promote a growth mindset 

Foster a growth (rather than fixed) mindset where challenges are viewed as opportunities for development rather than obstacles. This helps in building resilience and adaptability. Leaders should model a growth mindset by being open to new ideas, showing curiosity, and encouraging experimentation. 

Simplify workflows by identifying and eliminating unnecessary steps to streamline processes and approvals. This ultimately speeds up decision-making and empowers employees to solve problems on their own. 

3. Celebrate agility to sustain a new culture 

Shift performance metrics to emphasize outcomes, collaboration, and adaptability rather than simply output or adherence to existing processes. This way, companies can align employee rewards and incentives with agile behaviors, recognizing teams and individuals who adapt quickly, collaborate effectively, and contribute to continuous improvement. Celebrating calculated risks that go wrong can incentivize employees to think outside of the box and not be afraid of failure. Intuit, for example, gives out an award for “Best Failure” and even holds failure parties. “We celebrate failure,” said co-founder Scott Cook, “because every failure teaches something important that can be the seed for the next great idea.” 

To sustain an agile culture, frequently reinforce the importance of agility through company communications, trainings, and leadership actions. Regularly seek employee feedback at all levels, adapting strategies and practices while charting successes and incorporating lessons learned. This ensures that agility remains a living, evolving part of organizational culture. 
 

Leveraging technology and data to drive decision-making is crucial to agility 

Technology increases the speed at which strategies can pivot, but many companies aren’t taking full advantage of their data to drive decision-making. Utilizing this data goldmine—from customer insights to market data and internal systems—is critical to augment an agile culture. Retail and CP companies can use data to inform decisions at both the executional and strategic levels, gleaning an objective view of the present state of their business and validating the impact of changes, tests, and outcomes. 

Companies struggling to make the most of their data often have two problems: 

• They don’t know if the data they have is reliable. With bad data, nothing else matters—it’s a table stakes requirement to work with clean, accurate datasets.   
• They lack effective, repeatable methods to turn data into insights. Companies build massive machines and structures to ask questions of, learn from, and interpret data without first thinking through what they want to learn or which types of data will be most helpful. Data only moves the needle when you apply the proper context. 

To unlock the vast potential that data-driven decision-making provides, leadership needs to avoid the pitfall of going all-in on strategic investments that make it difficult to shift as needed. This stands counter to agile cultures, which serve as safe spaces to course-correct when new information becomes available. Such companies promote decision-making and accountability down and across the organization, ensuring all employees feel empowered to use data analytics, project management tools, and communication platforms to make informed, timely decisions that enhance agility. Only certain insights need to be elevated to the executive level—technology enables agile cultures by allowing for real-time communication, collaboration, and decision-making at all levels. 

Navigating a path towards agility 

By fostering a culture of agility, retail and CP companies create an environment where adaptability, speed, and continuous improvement are embedded in an organization’s DNA. And by better utilizing data to drive decision-making, agile cultures are able to make more accurate decisions even quicker, furthering the impact of a test-and-learn philosophy built to shift with changing conditions and customer needs. 

The benefits go far beyond speed-to-value and company culture—they make a tangible impact to bottom lines. Strengthening agility must be a line item in every leader’s plans. It’s time to learn fast.  
 

Stay tuned for future editions of our “intelligent enterprises” series focusing on the retail and consumer products industries.