Organizational Agility During the Pandemic: Buzz or Impactful?
The recognition of agility is growing in the last decade. The “agile concept” originated as a set of software development methodologies. Recently, agile practices have moved out of IT, leading to an organizational transformation methodology. And finally, agile organization and agile terms became the new popular corporate and organizational catchwords going around.
Enterprises, especially more established ones, feel the necessity to reshape their organizations to take rapid decisions, accelerate innovation and boost efficiency. Traditional organizations tend to have a static, siloed hierarchy that places a big barrier upfront data-driven and customer-centric decision-making process. Even before the COVID-19 crisis, constant change triggered by digital transformation, swelling customer expectations, and unengaged teams of siloed business functions put companies in challenging situations. Sustainable business growth, the need for operational speed, and profitability became the top three executive team challenges.
On the other hand, agile methodologies and bureaucracy are like oil and vinegar: They are good together, but they do not mix easily.
What is an agile organization?
An agile organization is a flexible and entrepreneurial organization that quickly responds to changes in the environment. Why do companies want to transform their organizations into agile enterprises? Technology boosts this emerging shift due to rapid advancements in technology and the digital transformation agenda. Hence, working culture issues like breaking out of silo-based bureaucracy remain and result in low employee engagement and slow response to the rapid changes in a competitive environment.
Enterprises also feel the urge to utilize collaboration and alignment more between departments and units. In agile culture, the quality of output is rewarded rather than titles and internal politics. The more established the company is, the more efficiency, coordination, and innovation muscle are needed.
Agile organizations empower teams with rapid learning and quick decisions skill set by a people-centred environment. The agile team focuses on utilizing technology to assist project management, according to McKinsey & Company.
What are the traits of an Agile Organization?
Let’s have a broader look at the characteristics of an agile organization.
1.Customer-centricity
Understanding customer’s needs and generating value for customers is much more important than operational process and profit.
2.Shared purpose
A people-centric culture that focuses on its people by investing in their development is the key. Aspirational leadership is required to connect employees to the company’s vision and purpose.
3.A network of teams instead of departments and units
A system of autonomous networked and connected teams replaces the process between departments and units.
4.Open communication
Adopting a transparent and open communication style makes the reach of information easier for teams and individuals. Right information improves the decision-making process. It also allows teams to decide and perform faster instead of an environment where teams are stuck in policies and bureaucracy.
5.Fast learning and decision-making flow
Agile organizations invest in the methodology, making them flexible in rapid response to an unpredictable and ever-changing environment. Agile organizations learn quickly, decide faster, and can develop the product on-the-go. The focus is on making sustainable but relatively small and focused changes that incrementally add value.
6.Seamless integration of technology
Rather than poorly digitalizing existing processes, agile organizations strive to integrate new technologies into their operational processes and practices.
Any takeouts we can get from agile organizations?
Working culture and leadership changes the score of the game. Let’s have a closer look at what agile organizations do differently.
- Agile organizations support flexible working hours and proficient in remote working.
- Provide high-end working technologies to their employees.
- Automize standard routine procedures that require employees’ working hours.
- Have backbones and suitable systems for compliance.
- Make shorter and to-the-point meetings.
- Encourage employees to be responsible and take the initiative.
- Vital leadership assets based on values, compelling storytellers with servant leadership styles, and open communication are highly appreciated.
- Monitor the results effectively.
Is Agility Buzz or Effective?
According to the McKinsey report “The five trademarks of agile organizations”, when pressure is applied, the agile organization reacts by being more than just robust; performance improves as more pressure is exerted.*
Research shows that agile organizations have a 70 % chance of being in the top quartile of organizational health, the best indicator of long-term performance. *
Moreover, such companies simultaneously achieve greater customer centricity, faster time to market, higher revenue growth, lower costs, and a more engaged workforce.
McKinsey’s research with 2,500 business leaders shows that three-quarters of respondents say organizational agility is a top or top-three priority, and nearly 40 % are currently conducting an organizational-agility transformation. High tech, telecom, financial services, and media and entertainment appear to be leading the pack with the most significant number of organizations undertaking agility transformations. More than half of the respondents who have not begun agile transformations say they have plans in the works to start one. Finally, respondents in all sectors believe that more of their employees should undertake agile ways of working (on average, respondents believe 68 % of their companies’ employees should be working in agile methods, compared with the 44 % of employees who currently do).
Not-born agile? Switch on the survival mode!
As Einstein labels it, organizations need to apply a new way of thinking to survive in the ever-changing world. Many organizations consider agility as the vaccine to COVID-19.
Some companies are born agile and agility is a part of their DNA. Uber, Airbnb, Upwork, Tesla and Spotify are a few examples of it. Some companies transform to agile organizations.
Here are some examples: DaimlerChrysler, ING, Amazon, Virgin, Google, Apple, Microsoft, P&G, Cisco, GE.
According to a new study by Organize Agile*, around half of all organisations has transformed to Agile organizations in the last three-four years with the need for change and transformation.
Interesting findings of the study:
Agile — a trend is here to stay
The popularity of agile seems to endure as the need of the current business world requires to be more flexible, efficient and results-driven under the pressure of technology and a new competitive environment. The expansion of the agile approach will rapidly cover all sectors and most functions within organizations in the upcoming decade.
About this article
This article has been written by a student on the Grenoble Ecole de Management’s Advanced Masters in Digital Strategy Management. As part of a content creation assignment, students are given the task of writing articles based on their digital interests and disseminate the articles online. Articles are marked but we make minimal changes to the content. Thanks for reading! James Barisic, Programme Director, MS DSM.
