Agility is an enigma to some organisations, often seen as speedy reaction, not a strategic discipline or a distinctive predictive capability – looks like it’s time to change that?
We live in a world of unprecedented change, disruption where the linear, predictable economic, political and social systems we’ve become used to no longer exist. Against this backdrop many organisations struggle to adapt, to be more dynamic and responsive – but it doesn’t have to be like this. There are ways for all organisations to adopt more agile, flexible ways of working. Ways of working that can help organisations to grow, to successfully overcome new challenges of continuous, disruptive change.
Recently McKinsey wrote an excellent article on ‘Why Agility Pays‘ they identified a simplified matrix with a speed axis and a stability axis as the foundations of agility. McKinsey rightly point out the conflict in many executives minds between speed and stability, they emphasise underlying dependencies between speed and stability, in driving key management practices. Of 161 organisations studied in their Organisational Health Index (OHI), 12% scored highly on the speed axis and the stability axis, agile organisations, 88% didn’t. In fact the study showed 8% were biased toward speed, 8% toward bureaucratically strong, and 14% trapped (neither stable or fast), that leaves 58% in no-mans-land. Clearly no executive wants to consider their organisation trapped, but what if your organization is one of the others – too fast, over-bureaucratic, or simply in limbo, average or not ready, just can’t see change coming?
As part of the McKinsey OHI study, McKinsey set an ‘agility objective’, “..to discover how often leaders and managers moved quickly when challenged and how rapidly organizations adjusted to changes and to new ways of doing things.”
McKinsey concluded that what makes agile organisations special is:
- Their “ability to balance fast action and rapid change, on the one hand, with organisational clarity, stability and structure on the other”
- They are “powerful machines for innovation and learning”
- They are “strong at motivation…meaningful value and inspirational leadership”
We agree with all of these ‘top line’ conclusions, they’re consistent with our thinking in many ways, but not all. A simple matrix of speed and stability is useful, but it’s not a plan or a system to deliver agile capability, that requires a bit more work. While a simplified perspective helps, and new insight into dependencies between speed and stability is undoubtedly useful, we think the detail matters.
For us and our custmers, it’s about finding smart ways to be agile, ways that accelerate unique ‘agile constitution’, concentration on specific competencies and strategic disciplines that drive agility and develop distinctive capability. It’s about engineering organisations, more importantly re-thinking leadership, management and operating principles to enable creativity, innovation and of course agility.
We see our role as helping organisations achieve an ‘agile state’, to operationalise agility, build agile capability and ‘edge’. To do so we go deeper into the mechanics and culture of change to develop practical solutions an build agile capability. We think about how agility can be ‘hard-wired’ into the organisation, how it becomes part of organisational DNA, specific leadership, cultures, networks, organisations, processes and technologies required to make it work for particular organisations.
We think agility boils down to seven interconnected competencies, strategic disciplines that agile organisations share that give them ‘predictive’, not just reactive capability:
- Insight, ‘unique smarts’ about what’s actually going on, informed by a broad coalition of those inside and outside the organisation. We believe that agility is meaningless without effective insight. Agility without insight is at best a late reaction, perhaps often too late, ‘we didn’t see it coming’ isn’t a competitive position. Insight, an ‘active intelligence’ that helps organizations prepare for change is one of the cornerstones of agility.
- Ingenuity, how to do things better than anyone else, see, develop and implement new ideas anywhere in the organisation at a speed and scale that is difficult for competitors to replicate. Another cornerstone of agility, simply put it’s the application of smart ideas that collectively re-invent the organisation, its management systems and operating models, ways to add value
- Progressive leadership, creative leadership capability to motivate and collaborate at scale, using collective intellectual capital to solve complex problems. This is a particular focus of brand intellect. We have been working to create new ways of developing more creative, progressive leadership for many years. We see a new form of leadership, specialists in managing complexity, distributed organisation and disruption, people that can lead organisations through unpredictability, fast changing circumstance and radical shifts in economic, social and commercial infrastructure.
- Focus, clarity about shared values, shared purpose, what really matters, development of distinctive capability in key strategic processes, what’s important commercially and to customers. Focus has long been known as a success factor for great organisations, but in difficult circumstances maintaining focus on core principles becomes even more challenging. This is why focus is so important to agile organisations, it reflects their resilience, their ‘reason for being’ and drive to deliver longer term value. Obviously this can change over time, but being clearly consciousness of what matters at any time means that essential systems will likely be more aligned to delivering value, than not.
- Speed, rapid reaction, ability to change quickly, but in context, critically, ability to change quickly without destroying value. There is a balance to be struck between speed and stability. Organisations have a cadence, a optimal rate of change. The challenge is to accelerate this, to introduce operating principles that ensure the pace of change increases over time, at a rate the organisation can absorb. If this challenge is met organisations can match, even outpace the rate of change in the markets and economies they serve. If it’s not, organisations can destroy value and severely limit growth opportunities through inappropriate tactical action.
- Stability, clarity about roles, responsibilities, adoption of flexible collaborative ways of working, removal of orthodox, wasteful structures that limit creativity, resourcefulness and responsiveness. We think this requires new clearer thinking on what people can do and want to do, the ways they want to work, how they are motivated. Rather than traditional, orthodox structures based on reporting hierarchy we know that new collaborative systems based on workstyles and contribution can make a difference here, in fact they are one of the critical enablers of agility. The structures of the past cannot offer organisations the agile ways of working needed to respond to challenges of change today.
- Collaboration, not normally drawn out as an enabler of agility, effective collaboration is critical to any organisation becoming agile. This means open collaboration, based on shared experience, shared knowledge and learning. The challenge here is that it’s easy to accept collaboration in principle, in fact many organisation think they already collaborate effectively. The truth is often quite different. Effective collaboration requires different leadership, culture, management and operating systems than many organisations are used to.
The bottom line for us is that agility must be developed as a predictive, not reactive capability, something that has strategic not just tactical value. Those that focus only on rapid response to near term challenges are already disadvantaged. The trick is to create externalised intelligence, ‘smarts’ and progressive leadership that can predict and set the pace of change. To align the organisation around collaborative ways of working maintain focus on what matters. The result is predominantly ‘staying power’, resilience and of course increased long-term shareholder returns. It is also a step on the way to increased brand equity, superior customer value and dominance in challenging market conditions. Think of it like this:
- Speed and stability without focus – like driving a car with your eyes shut
- Focus without leadership – working hard on the wrong stuff
- Leadership without insight and ingenuity – boring, doing the same old stuff
- Lack of real collaboration – wasting precious intellectual assets, a scandal
Time to make agility a strategic discipline, not just a tactical action plan?
Thanks for reading, good luck.