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Why next-generation organizations need to be consistently agile

Yamini Maheshwari Sapra & Ashish Ambasta
12th Jul 2018
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In 1965, the average tenure of companies on the S&P 500 was 33 years. By 1990, it was 20 years. It’s forecast to shrink to 14 years by 2026.

Fortune 500 turnover is a proxy for agility at organizations. If you were to look closer at what is happening:

  1. The industry composition within the S&P index is varying dramatically, with new niche sectors coming in
  2. Geo-political forces are playing an important role in determining fortunes of sectors, and not just organizations
  3. Technology and digital changes are rapid
  4. Younger companies and startups have come into existence and they undergo IPOs relatively early in their years to raise money

The study by Aon India shows that CEOs at the Best Employers, and in the market at large also, are all narrowing down on similar outcomes to drive their business. Client/customer service and product/service innovation are the top two long-term priorities to drive sustainable business performance.

20182017
Best        ParticipantsBest                         Participants
Client/ Customer Service88%                 68%67%                        60%
Product/ Service Innovation69%                  74%61%                        48%
Product/ Service Quality38%                  48%33%                        40%
Operational Efficiency19%                   52%39%                        48%
Growth through acquisition6%                     25%0%                           8%

Given that there is synergy in what organizations are aiming for to ensure sustainable business, it becomes imperative to not just ensure speed and responsiveness in the organization, but also purpose and alignment across levels.

What does being agile mean?

It means the ability of the organization to respond quickly to change with both speed and ability to change directions. Organizations focused on being agile need to focus on being agile while being consistent, and not just being one of those outcomes at the cost of the other.

They need to be agile and still be consistent (in delivering value) at the same time to meet the short-term and long-term-needs of different stakeholders. Hence, agility in current constructs is about “setting direction and not chasing a destination”.

Why is agility required?

Organizations are faced with demanding customers seeking continuous value in products/services. This coupled with the new generation of employees coming into workplaces has made the situation even more complex. This has instilled the need for organizations to be nimble-footed and agile to proactively deal with the ongoing changes, and at the same time move towards the long-term mission and purpose for which the organization exists.

Making agility happen

For organizations to remain consistently agile, they need to remain agile not just in planning but also in execution, and therefore agility is an ‘always-on’ phenomenon. Most often organizations focus on creating the best possible outcomes without testing the market, and hence are not able to effectively execute. In today’s context, market doesn’t remain with a product/service even if it meets its demand because there is always a new/shinier/simpler offering which could do the work in an enhanced manner. Thus, in the current context, being agile will mean being perfect in delivering customer needs/wants in the present, and at the same time experimenting with what the changing and future needs could be.

It’s a mixture of what is now and here, and also what the future holds for the market in which the organization operates.

Hence, to drive agility, organizations need to balance strategy with purpose, while leaders balance agility with consistency.

Supplementing ‘consistency’ with ‘conformity’ can be a recipe for disaster, and organizations need to understand what is core to them and how to ensure they stay true to their users’ current and future needs while expanding to be everything to everyone.

The Aon India study reveals that the realization of the need for agility is universal. However, the thinking around agility seems to be scattered, tactical, and paradoxically, mostly unsustainable for long-term business success. The study findings bring together an understanding of what makes organizations effective and put forth a construct that will guide the pursuit of agility within organizations. It was discovered through empirical evidence and logic that this construct brings together everything that organizations are designing, executing, and communicating today under the broad banner of agile. It builds thereon to describe what it takes to be consistently agile.

Being agile: Organizations need to be driven by a fundamental sense of purpose, clarity in vision, and a culture that helps actualize this.

The starting point for agility in the organization context is aligning on the purpose and vision of the organization. Senior leadership plays an important role in creating and communicating this with the internal and external stakeholders of the organization.

Thinking agile: Organizations need to shape mindsets that will lend it to being challenged, curious, collaborative, and consistent.

Building for an agile organization requires the complete organization – the structure and mindset – to work in a way that lends the organization to being fast and decisive in the real world. To be successful in creating a consistently agile organization, it is imperative for organizations to spend disproportionate time in ‘thinking’ agile. Given agility is an ‘always-on’ phenomenon, organizations need to continuously build and foster an environment in which employees can be agile. This, therefore, requires enabling the right mindset through the right structure (team and organization) and enabling infrastructure.

Doing agile: Organizations need to have the right ‘enablers’ (technology, resources, and processes) to create quick learning loops, fungible skill pools, and a doing culture

While ‘being agile’ and ‘thinking agile’ address the ‘how and where to start’ for consistent agility, ‘doing’ decodes ‘what needs to be done’. The answer for ‘what’ lies in the vision which will provide direction into the implementation plan. Some organizations start small by prototyping changes in smaller parts before scaling them up; others make more foundational changes which impact the whole organization. There is no right or wrong to a particular approach – the focus is on creating an ecosystem where agility thrives.

So, to drive agility, organizations need to balance strategy with purpose, while leaders balance agility with consistency. That said, organizations are in the nascent stage in figuring out the ‘doing’ part of the journey where alignment is more important than the practices.

In an ideal world, all three – being-thinking-doing – would be concentric circles on top of each other, but in the current context, organizations seek maximum overlap among the three to drive agility. While Best Employers have begun their journey to be agile in the right way to institutionalize the agile mindset, there is still time before they can call themselves ‘consistently agile’. The study clearly indicates that the biggest mistake that organizations make in the quest to be agile is to jump to ‘doing’ before ‘thinking’.

There are plenty of examples within the Best Employers to reinstate the importance of going from being to thinking to doing, step-by-step.

Yamini Maheshwari Sapra is Consulting Director, Aon India, and the Lead for the Best Employer India Study. Ashish Ambasta is responsible for leading the overall Engagement business and team at Aon India.

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)

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