Is your organization 21st century ready?
With the market constantly changing, organizations are being forced to practice agile methodologies to sustain itself. In the 21st Century, the dynamism of the industry is such that you either make it or break it. But what are the challenges organizations face in being Agile? What are the factors which directly affect the agility of an organization? The biggest question one must ask themselves is what really makes an organization agile and how does my company fare in comparison to other organizations?
What really is an Agile Organization? Why does an organization have to be agile?
An Agile Organization is one that quickly changes in response to changes in the marketplace or environment. The ‘agile organization’ is also known as ‘the entrepreneurial organization as this kind of organization places a lot of emphasis on customer-centricism. This means that rather than routine standardized offerings, they focus on customizing products and services to the customer’s needs.
But why does an organization need to be agile? Organizations are generally unprepared to the emergence of new competitors, rapid advancements in technology and sudden shifts in overall market conditions. For instance, the Indian IT industry was booming in the first decade of the 21st century but due to the immense competition since 2010 most small businesses in the IT sector went out of business as they could not keep up with the market’s demands. The rapid emergence of new market sectors also created disruption in the industry with domains such as Artificial Intelligence, Machine Learning, Data analytics, Internet of Things (IoT) and Blockchain among others. The rapid growth of these markets made some enterprises who were not reactive to the dynamism of the market had no choice but shutting down the shop for good or being acquired. But Agile enterprises on the other hand, were adaptive to change as they are used to the sudden changes in the market with respect to demand and supply and emerging trends. Agile organizations thrive in non-hierarchical organizations without a single point of control or a ‘holocracy’.
What makes an organization Agile?
In my experience, successful agile organizations consistently exhibit four key features. These trademark features include a network of cross-functional teams within a people-centered organizational culture that operates in a self-managed, rapidly learning and highly fast decision cycles which are enabled by technology, and is connected with a common purpose that co-creates value for all their stakeholders.
These are the 4 key features of an Agile organization:
Fig 1: Four key features of Agile organizations
Agile organizations consist of self-aware individuals whose actions affect their organization as a whole. Hence it is extremely important for talent acquisition teams to focus on hiring quality talent. Agile organizations generally pride themselves for having a cohesive community that focuses on diversity and inclusion. They believe the more perspectives and viewpoints they have in the organization, the better. More importantly, there is an entrepreneurial drive among each individual and there is also role mobility. For example, organizations such as General Electric had a huge performance overhaul in 2015 paving the way for other companies to do the same. Their new system relies on managers guiding and coaching employees to achieve their goals, and they work under a much less rigid framework so that versatility and adaptability is built in each employee. The employees also had the freedom to pursue initiatives of their own interest, for instance, how most McKinsey consultants say “Create a McKinsey within McKinsey”. Also, the role of leaders are also extremely important in practicing Agile. In other words, Micromanagement is a strict no-no. They emphasize on ownership and accountability in every employee and give liberty to each employee to perform tasks using their own innovative and unique methodologies.
Structure & Process
According to a survey by McKinsey & Co, the biggest challenge to agility in an organization, is Culture. Surprised? Me, not that much. You want to know why? Because the culture of an organization is its very essence, its identity within the company and the market. Their culture determines their day to day functioning and their systems and processes. Culture and being Agile is like flipping a coin, heads you win, tails you lose. However, if your culture and your processes are aligned to agility. The odds of getting heads are in your favor. An Agile organization’s processes are so well defined that it’s reiterated and experimented upon infinite times such that it is institutionalized in their organizational structure. They create an environment where informational transparency, continuous learning and quick and purpose driven decision making are common best practices in their organization.
Agile organizations need to continuously adapt to the advancements in technology and move towards digital solutions such as process automation, enterprise mobility to tackle market challenges. In fact, in 2015, General Electric’s trademark transformation was the integration of an app into their feedback system to facilitate the delivery of regular employee feedback and productive performance conversations. This not only increased productivity but also generated more revenue as tedious tasks of reporting took much less time and hence client satisfaction grew exponentially.
In Agile Organizations, the organization culture is so well defined and customer centric that their culture itself becomes their strategy. The whole organization have a shared sense of vision and purpose and are aligned to organizational goals. There is also extraordinary resource allocation and actionable strategic implementation. Hence, agile organizations can reimagine both whom they create value for, and how they do so. They are intensely customer-focused, and seek to meet diverse needs across the entire customer life cycle. Moreover, they are determined to create value for a large range of stakeholders.
Successfully implementing Agile practices in an organization is not an overnight task. It requires a huge amount of investment of time and money. It requires huge commitment not just from the leaders, but also their employees, customers and other stakeholders. Sonia Boyle, GE Canada’s Vice-President of Human Resources, says
“It requires a measure of trust and vulnerability. These characteristics won’t appear overnight and will require a commitment to change and personal development.”
However, if organizations truly commit to the above tenets and align their vision, processes, culture and their employees, agility is within their grasp.