What the Beyond Meat IPO Can Teach Us About Organizational Agility
Article | Accountability Insights
The commercial success of Beyond Meat, whose initial public offering (IPO) has outperformed all others in 2019 thus far, is a testament to the need for organizational agility.
Demand for meatless products has skyrocketed in the last year, fostering the development of a burgeoning $35 billion alternative meat market. Over the course of the last decade, $16 billion has been invested into the plant-based meat, egg, and dairy industry, with $13 million of that investment taking place within 2017 and 2018 alone.
At the helm of this boom is plant-based substitute company Beyond Meat, a packaged food titan that gained national coverage in May as the most successful IPO of 2019 thus far. Initially priced at $25 per share, the company has surged 600% since its initial public offering and is now valued at approimately $9 billion.
Throughout the course of its relatively short history, Beyond Meat has gleaned glowing endorsements — and investments — from celebrities like Bill Gates, Leonardo DiCaprio, and Shaquille O’Neal. While many consumers love the product for its impressive ability to mimic the umami flavors and juicy textures of the real thing, what has made Beyond Meat stand out from the veggie burgers of yore is its huge environmental implications — one Beyond Meat patty uses 90% fewer greenhouse-gas emissions and utilizes 93% less land than a traditional beef patty.
All of this culminates to explain one very essential, key factor in Beyond Meat’s striking success: an ability to remain agile and keep pace with evolving consumer demands — leaving competitors in the dust.
Riding the Waves of Consumer Demand
Beyond Meat’s story begins before the burger — in fact, it was the chicken that came first. Beyond Chicken Strips launched in 2012, but, despite early investment from tech titans Bill Gates and Twitter co-founder Biz Stone, the product struggled to stay afloat. Reviews like that of New York Times food critic Mark Bittman, in which he describes the product as, “…bland, unexciting, and not very chicken-like,” surfaced and summarized a seemingly widely-held consumer belief — the “chicken” just wasn’t that good.
Rather than invest in research and development (R&D) or expanded marketing initiatives, Beyond Meat CEO Ethan Brown discontinued the company’s Beyond Chicken Strips and has instead funneled his focus on more profitable products. Introduced in 2016, the Beyond Burger has just undergone its latest makeover in an effort to woo more consumers. The new patty touts itself as a more complete source of protein, changes from red to brown when it cooks, and has extra fat “marbling” for flavor — all in an effort to keep pace with evolving consumer demands for healthier, more environmentally responsible foods that look — and taste — like meat.
Brown is making smart moves, and for good reason — analysts all seem to agree, the trend toward plant-based foods isn’t going anywhere any time soon.
“I think [big companies] have to reinvent themselves if consumers are going to continue to see them as relevant,” said Erel Margalit, founder and executive chairman of Jerusalem Venture Partners, who cited the food business as a great example of how generational change can disrupt the status quo. “[Millenials] want to know where their food comes from, how it’s packaged, where it’s raised ethically, and where it’s going….They love to eat, but they want to know that it’s environmentally kosher.”
The ability for Beyond Meat to not only adjust its business model quickly in accordance with poor product performance, but to anticipate consumer demands ahead of the curve — developing beef-inspired plant-based products in 2016 — attests to the company’s agility.
Why An Agile Organization is an Accountable One
An organization is only as agile as the culture on which it’s built. Any company looking to increase its speed-to-market and evolve in tandem with (or before) consumer demands must succeed in one critical task: creating a culture of accountability. With a culture of accountability, in which employees rise above hurdles and own the necessary steps for achieving results, leaders don’t have to worry about the pitfalls of disrupting the status quo. Instead, they trust that employees will remain proactive in driving performance by way of disrupting the status quo.
This is because accountable employees seek to identify critical performance gaps early, take it upon themselves to bridge those gaps, and practice collaborative, creative problem-solving to do what it takes to deliver on desired results at speed. This process may take the form of sales members flagging poor profit margins on a particular product, marketing employees identifying negative responses to a particular campaign (such as the Chicken Strips campaign), and members of the production line pinpointing an area in which they can minimize the plastic used in packaging, thereby boosting the bottom line while furthering the organization’s commitment to environmentally-conscious business.
Setting — and Achieving — Organizational Goals
To truly be held accountable, employees need to know what type of results they’re being held accountable for — are they safety-oriented? Profit-oriented? Both? It’s up to leaders to make these Key Results blindingly obvious through explicit communication and action.
Beyond Meat did this early on, making it their mission to push boundaries and disrupt. After several years spent relying on university research and whatever insights their team could gather in their small R&D facility, the company made the move to a 26,000-foot facility in the summer of 2018. Dubbed the “Manhattan Beach Project Innovation Center” after the famous WWII R&D undertaking, the name reminds employees daily of the spirit of innovation that drives Beyond Meat. So does the company’s “Rapid & Relentless Innovation Initiative,” the goal of which is to “continuously iterate the company’s products until they are indistinguishable from their animal protein equivalent.”
Employees at Beyond Meat take these organizational goals to heart, holding themselves accountable to deliver innovative results. “We are leaving no stone unturned in our efforts to perfectly build meat directly from plant materials using only natural ingredients and without genetic modification,” said Dr. Dariush Ajami, who leads R&D at Beyond Meat. “The breadth of processes and technologies we are bringing in house supports the company’s focus on rapid innovation, in some cases reducing timelines by half.”
Echoing this sentiment is Parker Lee, lead scientist of Beyond Meat’s analytics lab. “We’re always trying to improve our products,” says Lee.
It’s clear that the company’s organizational culture is centered on a shared sense of accountability for achieving the desired results of market disruption and products of unmatched quality.
Making the Case for a Culture of Accountability
Organizational agility is essential for any company looking to remain viable in today’s fast-paced, consumer-driven market. But before leaders are able to truly leverage organizational agility and match rising demand with innovative solutions, they must address something more elemental: the mindsets of their employees.
Without a psychologically-ingrained and collective sense of accountability, organizational goals fall by the wayside and quickly result in finger pointing and a mentality of, “It’s not my job.” On the other hand, when accountability runs through every level of an organization, all employees feel connected to Key Results and the purpose of their work — which in turn leads to greater satisfaction in the workplace.
According to the Partners In Leadership “Happiness at Work” survey, when employees are happier at work, 85% take more initiative and nearly 50% report caring more about their work. This is all to say that when leaders invest in the time and effort necessary to connect employees’ sense of purpose to the overarching goals of the organization, those employees feel happier and perform at higher levels, driving the company’s bottom line.
This excerpt from Propeller: The Power of Getting Accountability Right, further sums up the success of influential, accountability-driven leaders:
“The formula applied by these leaders for accelerating change is the same: with intentionality, resolve, and vision, they define the results they need to achieve and then inspire people to rise above their circumstances and demonstrate the ownership needed to perform at new heights. They get accountability right and use it to propel their people and teams forward.”
It should come as no surprise, then, that the secret to achieving corporate agility at Beyond Meat levels is developing and sustaining a culture of accountability.