Why Your Organization Must Be Agile to Succeed
27th June 2018 | Linda Holbeche
If there is any certainty, it is this: no organization can survive - let alone thrive - if it is unable to adapt to the changing circumstances it operates in. Successful organizations are agile; able to anticipate and respond to trends, change quickly while innovating, and continuing to delight their customers.
Can anyone doubt that we are living through turbulent times? Across the world, there are shifting tectonic plates of political opinion, including polarisation and growing feelings of anti-globalization. Brexit is but one illustration of the tendency of those who feel they have not reaped the full benefits of globalization to resort to bunker mentality and say 'no' to participating in deepening European integration. As a result, marketplaces and sources of profitability are being transformed with consequences which are hard to predict.
Companies are not immune to environmental pressures for change either. Public awareness of the damage caused to the environment by mass industrialization, such as the polluting effects of plastics, is growing. On a global stage, the concerted political effort to address this problem is potentially undermined by powerful vested interests, which encourage governments to pull out of common accords. Brands do not have the luxury of prevaricating on their corporate responsibilities towards the communities they serve. Company reputations can be destroyed swiftly if they become associated with exploitation of the weak, or with the deliberate neglect of ethics and the environment.
The fourth technical revolution is transforming the business landscape, shrinking the planning horizon, increasing the range and nature of products and competition, as well as increasing the expectations of customers for personalised products and services at low prices. This means that business models are having to be continuously reinvented and yesterday's models of success are unlikely to help organizations thrive in the future. In the current landscape, rather than seeking sustainable competitive advantage, organizations need the capability of generating multiple transient advantages, and this comes with speed and innovation.
Technology is also transforming work at an exponential rate. Automation, big data and artificial intelligence (AI) all offer the means to replace and/or continuously monitor human activity, giving employers unparalleled power over their workforces. Many employers are already taking up the ‘efficiency’ opportunity to downsize their workforces and utilise approaches to flexibility that benefit only the employer. Particularly in public service environments which are typically under-financed, many employers are prizing efficiency and cost-saving over commitment to upskilling and deploying staff in more value-enhancing ways. And when employees lack any form of job security and have no means of developing further, they tend to hang on to what they know and keep their best ideas to themselves in case they need to jump ship.
Conversely, since the digital revolution has effectively empowered customers, firms that wish to succeed must be highly customer-centric – able to anticipate and co-create with customers the products and services they demand. The days when brands could dominate a marketplace and offer the customer little choice are long gone. Particularly in sectors where innovation and customer service are valued, it is increasingly recognised that sustainable value-add comes from human beings working alongside machines. In such contexts, employers place human beings more firmly at the centre of their strategies for competitive breakthroughs and growth. After all, it is the people in the front-line of serving customers that are most likely to have their fingers on the pulse of the next trend.
Therein lies the rub: in many sectors there are shortages of the kinds of talent that employers are seeking to recruit. Today’s multi-generational workforces may have different needs one from another, yet thanks to social media, increasingly, many employees share some common expectations; for increased and meaningful communication, involvement in decision-making, self-management of data, fair pay and opportunities for development, more accessible styles of management and leadership. These are ill-suited to traditional long-term employee value propositions and command and control styles of leadership. And when talent is key, organizations can no longer dictate to valued employees the terms of engagement: they have to be customer-centric towards staff too.
This is why organizational agility is so critical, regardless of sector. For many, agility is synonymous with structure and lean methodologies. While these are undoubted features, agility involves much more than that. It involves working more iteratively even within long-term ‘fixed’ project timeframes in order to course modify en route, rather than at the end. It typically involves teams working across internal and external boundaries, including with customers and partners, and a focus on speedy innovation. In some companies, this means releasing products before they are perfected so that feedback can result in a better product sooner. Above all, it requires a learning mindset in the mainstream business - to embrace ambiguity, experiment and to deeply focus on customers.
And while start-ups and firms working in software development typically adopt agile working practices from the outset, the challenge for many long-established organizations is to scale up agile practice in one part of the business – such as the IT function – to become the ‘way we operate around here’. This may require challenging some of the more rigid or unhelpful routines, practices and vested interests that have accumulated like barnacles around the organization over time. It means opening the organization up to new ways of thinking and being, in which change is no longer the scary exception but rather the dynamic norm which produces benefits for all.
To scale up agility requires strong leadership from the top and a determination to encourage shared leadership at all levels. And empowerment has to be genuine if it is to work. There is no point encouraging people to experiment, be accountable and to take judicious risks if they get severely punished the first time something goes wrong. So, training, performance management, reward and recognition systems have to reinforce the message about what is really required. And it is entirely possible that offering employees meaningful career opportunities will enable employers to retain the best talent even in today’s mobile times. Managers too need to make the transition to become coaches to their teams, focused on developing capability within and beyond the team. Some may need help in doing this or may be better placed to become an individual contributor.
To sum up, agility is non-optional for organizations that intend to thrive in an ever-changing and fast-paced competitive landscape. It’s a way of thinking and being, not just doing. Only agile organizations can turn turbulence into a dynamic land of new opportunities.