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The Features of Agile Organizations

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The ability to innovate faster and in new ways will always be critical to achieving high performance. But given the new dynamics of a fast-changing and less predictable global economy, a number of competitive assumptions are changing.

One of the most important changes: The new business environment will favor those companies able to execute innovations faster, and to move their organizations forward more nimbly by cultivating organizational agility.

Farsighted business leaders preparing their organizations for the eventual upturn have already recognized this.

Agile organizations—of any size and across industries— that want to lead the business terrain exhibit five trademarks in common. These trademarks enable organizations to balance stability and dynamism and thrive in an era of unprecedented opportunity.

The trademarks include a network of teams within a people-centered culture that operates in rapid learning and fast decision cycles which are enabled by technology, and a common purpose that co-creates value for all stakeholders.

The old paradigm: Organizations as machines

A view of the world—a paradigm—will endure until it cannot explain new evidence. The paradigm must then shift to include that new information. There is now a paradigm shift in the ways that organizations balance stability and dynamism.

First, the old paradigm. In 1910, the Ford Motor Company was one of many small automobile manufacturers. A decade later, Ford had 60 percent market share of the new automobile market worldwide.

Ford reduced assembly time per vehicle from 12 hours to 90 minutes, and the price from $850 to $300, while also paying employees competitive rates.

Ford’s ideas, and those of his contemporary, Frederick Taylor, issued from scientific management, a breakthrough insight that optimized labor productivity using the scientific method; it opened an era of unprecedented effectiveness and efficiency.

Taylor’s ideas prefigured modern quality control, total-quality management, and—through Taylor’s student Henry Gantt—project management.

Gareth Morgan describes Taylorist organizations such as Ford as hierarchical and specialized—depicting them as machines. For decades, organizations that embraced this machine model and the principles of scientific management dominated their markets, outperformed other organizations, and drew the best talent. From Taylor on, 1911 to 2011 was “the management century.”

Disruptive trends challenging the old paradigm

Now, we find the machine paradigm shifting in the face of the organizational challenges brought by the “digital revolution” that is transforming industries, economies, and societies. This is expressed in four current trends:

  • Quickly evolving environment. All stakeholders’ demand patterns are evolving rapidly: customers, partners, and regulators have pressing needs; investors are demanding growth, which results in acquisitions and restructuring; and competitors and collaborators demand action to accommodate fast-changing priorities.
  • Constant introduction of disruptive technology. Established businesses and industries are being commoditized or replaced through digitization, bioscience advancements, the innovative use of new models, and automation. Examples include developments such as machine learning, the Internet of Things, and robotics.
  • Accelerating digitization and democratization of information. The increased volume, transparency, and distribution of information require organizations to rapidly engage in multidirectional communication and complex collaboration with customers, partners, and colleagues.
  • The new war for talent. As creative knowledge- and learning-based tasks become more important, organizations need a distinctive value proposition to acquire—and retain—the best talent, which is often more diverse. These “learning workers” often have more diverse origins, thoughts, composition, and experience and may have different desires (for example, millennials).

When machine organizations try to engage with the new environment, it does not work out well for many. A very small number of companies have thrived over time.

The new paradigm: Organizations as living organisms

The trends described above are dramatically changing how organizations and employees work. Agile organizations mobilize quickly, are nimble, empowered to act, and make it easy to act. In short, they respond like a living organism (Exhibit 1).

When pressure is applied, the agile organization reacts by being more than just robust; performance actually improves as more pressure is exerted. Research shows that agile organizations have a 70 percent 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.

As a result, agility, while still in its early days, is catching fire. Few companies have achieved organization-wide agility but many have already started pursuing it in performance units.

Companies that aspire to build an agile organization can set their sights on these trademarks as concrete markers of their progress. For each trademark, we have also identified an emerging set of “agility practices”—the practical actions we have observed organizations taking on their path to agility (Exhibit 2).

The five trademarks of agile organizations

While each trademark has intrinsic value, research shows that true agility comes only when all five are in place and working together. They describe the organic system that enables organizational agility.

Linking across them, it is evidence that a set of fundamental shifts in the mind-sets of the people in these organizations. Make these shifts and, we believe, any organization can implement these trademarks in all or part of its operations, as appropriate.

  1. North Star embodied across the organization

Agile organizations 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. Further, they are committed to creating value with and for a wide range of stakeholders.

To meet the continually evolving needs of all their stakeholders, agile organizations design distributed, flexible approaches to creating value, frequently integrating external partners directly into the value creation system.

To give coherence and focus to their distributed value creation models, agile organizations set a shared purpose and vision—the “North Star”—for the organization that helps people feel personally and emotionally invested. This North Star serves as a reference when customers choose where to buy, employees decide where to work, and partners decide where to engage.

Agile organizations that combine a deeply embedded North Star with a flexible, distributed approach to value creation can rapidly sense and seize opportunities. People across the organization individually and proactively watch for changes in customer preferences and the external environment and act upon them.

They seek stakeholder feedback and input in a range of ways (for example, product reviews, crowd sourcing, and hackathons). They use tools like customer journey maps to identify new opportunities to serve customers better, and gather customer insights through both formal and informal mechanisms (for example, online forums, in-person events, and start-up incubators) that help shape, pilot, launch, and iterate on new initiatives and business models.

These companies can also allocate resources flexibly and swiftly to where they are needed most. They regularly evaluate the progress of initiatives and decide whether to ramp them up or shut them down, using standardized, fast resource-allocation processes to shift people, technology, and capital rapidly between initiatives, out of slowing businesses, and into areas of growth.

These processes resemble venture capitalist models that use clear metrics to allocate resources to initiatives for specified periods and are subject to regular review.

Senior leaders of agile organizations play an integrating role across these distributed systems, bringing coherence and providing clear, actionable, strategic guidance around priorities and the outcomes expected at the system and team levels.

They also ensure everyone is focused on delivering tangible value to customers and all other stakeholders by providing frequent feedback and coaching that enables people to work autonomously toward team outcomes.

  1. Network of empowered teams

Agile organizations maintain a stable top-level structure, but replace much of the remaining traditional hierarchy with a flexible, scalable network of teams. Networks are a natural way to organize efforts because they balance individual freedom with collective coordination.

To build agile organizations, leaders need to understand human networks (business and social), how to design and build them, how to collaborate across them, and how to nurture and sustain them.

An agile organization comprises a dense network of empowered teams that operate with high standards of alignment, accountability, expertise, transparency, and collaboration. The company must also have a stable ecosystem in place to ensure that these teams are able to operate effectively.

Like the cells in an organism, the basic building blocks of agile organizations are small fit-for-purpose performance cells. Compared with machine models, these performance cells typically have greater autonomy and accountability, are more multidisciplinary, are more quickly assembled (and dissolved), and are more clearly focused on specific value-creating activities and performance outcomes.

They can be comprised of groups of individuals working on a shared task (i.e., teams) or networks of individuals working separately, but in a coordinated way. Identifying what type of performance cells to create is like building with Lego blocks. The various types (Exhibit 3) can be combined to create multiple tailored approaches.

The three most commonly observed agile types of performance cell today include:

  • Cross-functional teams deliver ‘products’ or projects, which ensure that the knowledge and skills to deliver desired outcomes reside within the team. These teams typically include a product or project owner to define the vision and prioritize work.
  • Self-managing teams deliver baseload activity and are relatively stable over time. The teams define the best way to reach goals, prioritize activities, and focus their effort. Different team members will lead the group based on their competence rather than on their position.
  • Flow-to-the-work pools of individuals are staffed to different tasks full-time based on the priority of the need. This work method can enhance efficiencies, enable people to build broader skillsets, and ensure that business priorities are adequately resourced.

However, other models are continuously emerging through experimentation and adaptation.

  1. Rapid decision and learning cycles

Agile organizations work in rapid cycles of thinking and doing that are closely aligned to their process of creativity and accomplishment. Whether it deploys these as design thinking, lean operations, agile development, or other forms, this integration and continual rapid iteration of thinking, doing, and learning forms the organization’s ability to innovate and operate in an agile way.

This rapid-cycle way of working can affect every level. At the team level, agile organizations radically rethink the working model, moving away from “waterfall” and “stage gate” project-management approaches. At the enterprise level, they use the rapid-cycle model to accelerate strategic thinking and execution.

The impact of this operational model can be significant. There are several characteristics of the rapid cycle model:

  • Agile organizations focus on rapid iteration and experimentation.
  • Agile organizations leverage standardized ways of working to facilitate interaction and communication between teams, including the use of common language, processes, meeting formats, social-networking or digital technologies, and dedicated, in-person time, where teams work together for all or part of each week in the sprint.
  • Agile organizations are performance-oriented by nature.
  • Working in rapid cycles requires that agile organizations insist on full transparency of information, so that every team can quickly and easily access the information they need and share information with others.
  • Agile organizations seek to make continuous learning an ongoing, constant part of their DNA.
  • Agile organizations emphasize quick, efficient, and continuous decision making, preferring 70 percent probability now versus 100 percent certainty later. They have insight into the types of decisions they are making and who should be involved in those decisions.
  1. Dynamic people model that ignites passion

An agile organizational culture puts people at the center, which engages and empowers everyone in the organization. They can then create value quickly, collaboratively, and effectively.

Organizations that have done this well have invested in leadership which empowers and develops its people, a strong community which supports and grows the culture, and the underlying people processes which foster the entrepreneurship and skill building needed for agility to occur.

Leadership in agile organizations serves the people in the organization, empowering and developing them. Rather than planners, directors, and controllers, they become visionaries, architects, and coaches that empower the people with the most relevant competencies so these can lead, collaborate, and deliver exceptional results.

Such leaders are catalysts that motivate people to act in team-oriented ways, and to become involved in making the strategic and organizational decisions that will affect them and their work. We call this shared and servant leadership.

Agile organizations create a cohesive community with a common culture. Cultural norms are reinforced through positive peer behavior and influence in a high-trust environment, rather than through rules, processes, or hierarchy. This extends to recruitment.

People processes help sustain the culture, including clear accountability paired with the autonomy and freedom to pursue opportunities, and the ongoing chance to have new experiences. Employees in agile organizations exhibit entrepreneurial drive, taking ownership of team goals, decisions, and performance.

For example, people proactively identify and pursue opportunities to develop new initiatives, knowledge, and skills in their daily work. Agile organizations attract people who are motivated by intrinsic passion for their work and who aim for excellence.

In addition, talent development in an agile model is about building new capabilities through varied experiences. Agile organizations allow and expect role mobility, where employees move regularly (both horizontally and vertically) between roles and teams, based on their personal-development goals.

An open talent marketplace supports this by providing information on available roles, tasks, and/or projects as well as people’s interests, capabilities, and development goals.

  1. Next-generation enabling technology

For many organizations, such a radical rethinking of the organizational model requires a rethinking of the technologies underlying and enabling their products and processes, as well as the technology practices needed to support speed and flexibility.

Agile organizations will need to provide products and services that can meet changing customer and competitive conditions. Traditional products and services will likely need to be digitized or digitally-enabled. Operating processes will also have to continually and rapidly evolve, which will require evolving technology architecture, systems, and tools.

Organizations will need to begin by leveraging new, real-time communication and work-management tools. Implementing modular-based software architecture enables teams to effectively use technologies that other units have developed.

This minimizes handovers and interdependencies that can slow down production cycles. Technology should progressively incorporate new technical innovations like containers, micro-service architectures, and cloud-based storage and services.

In order to design, build, implement, and support these new technologies, agile organizations integrate a range of next-generation technology development and delivery practices into the business. Business and technology employees form cross-functional teams, accountable for developing, testing, deploying, and maintaining new products and processes.

They use hackathons, crowd sourcing, and virtual collaboration spaces to understand customer needs and develop possible solutions quickly. Extensive use of automated testing and deployment enables lean, seamless, and continuous software releases to the market (for example, every two weeks vs. every six months).

Within IT, different disciplines work closely together (for example, IT development and operations teams collaborate on streamlined, handover-free DevOps practices).

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Growth-leadership mind-set needed to capture growth

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Everyone may be born a winner, but only few (if not none) are born leaders. Hence Leadership, like cooking, painting or any other skill must be developed and enhanced to the fullest potential. While growth is needed, the will to grow which first develops in the mind, takes precedence. Mind-set, curiosity, and a willingness to adapt to client needs and industry trends form the three core capabilities needed to succeed in any given business environment. A good business leader then, is mandated to harness these core capabilities to transform the business to higher heights; leadership delivered with a growth mind-set will absolutely birth the full potential of the business.

Growth-leadership mind-set offers a vast room for a leader to try so many strategies aimed at growing the business. There is room to try, fail, learn from it and do a better job and this, by extension gives the leader the ability to move at a steady pace yielding faster and better results on projects.

Having the growth-leadership mind-set is really critical. The end product presented to a client or customer reflects the kind of work flow and leadership present in the business, how teams/employees behave, how they act, collaborate, what they take to clients and even how they deal with failure shows in the final product that goes in front of the client. This is a feat consistent with leadership that is growth oriented. A leader whose sole focus is growth; A lack of these elements, a loss of clients/customers.

With a growth-leadership mindset, a business lead is driven Everyone may be born a winner, but only few (if not none) are born leaders. Hence Leadership, like cooking, painting or any other skill must be developed and enhanced to the fullest potential. While growth is needed, the will to grow which first develops in the mind, takes precedence.

Mind-set, curiosity, and a willingness to adapt to client needs and industry trends form the three core capabilities needed to succeed in any given business environment. A good business leader then, is mandated to harness these core capabilities to transform the business to higher heights; leadership delivered with a growth mind-set will absolutely birth the full potential of the business. Insights Insights to focus solely on making sure the business grows; trying new strategies that can move the business and not just limiting one to accepting what works and sticking to it.

Here growth is the focus and things must move forward in that direction, there is no room for stagnation. Thinking about how things can happen rather than thinking about how things cannot be changed. In other words; this mind-set allows a leader to step out of the business’s comfort zone and make impact while overcoming obstacles. That is the kind of leadership mind-set people in top positions must adopt in the various business settings.

It begins in the mind

Capita Chief Growth Officer, Ismail Amla, in an interview with McKinsey’s Biljana Cvetanovsk mentioned that when he was growing up, his dad used to tell him, “If you think you’re going to do it, you’re going to be right. If you think you’re not going to do it, you’re going to be right.” A growth-leadership mindset, for him, therefore, is the neuroscience confirming the hypothesis that how one thinks determines how they feel and how they behave, and how one behaves determines the outcome.

If the mind’s eye does not see growth and the prospects thereof, it will not happen. The team lead’s responsibility then becomes to see the growth ahead, map out a strategy to achieve that goal and drive the team to collectively hit the mark and scale higher. Else, the business may do well with what it knows to do and remain stagnant like it knows to be, but never higher than it could be.

Curiosity

A team lead needs to really understand what clients/ customers want. This has been termed in the market as “consultative selling” where the focus is on value and trust and exploring the client’s needs before offering a solution. This definitely gets one to understand the better what really people want or need.

Learning agility

It is not enough just knowing about something; a team lead has to go the extra mile to learn everything. It is important to learn what the problems are and how to solve them. Limiting oneself to just working by what you already know can only lead to failure. In addition to being curious and having a ready to learn attitude, a team lead should ultimately have a growth mind-set.

These are three core capabilities required to drive growth. People may sometimes attribute doing what they want to do at any time as a leader as growthleadership, but that is not the case; to get up, doing what needs to be done and adding the importance of time to task is what growth-leadership is. This leads to the next point, Take Action!

Take Action; do!

Further from the mind, the leader must then, walk the talk. Like the age old adage goes, talk is cheap. The strategies put on paper or mentioned orally must be fully executed to bring to full fruition what has been in mind. This is what will actually make the business growth happen.

Steps like delivering the best, meeting customer/client demands on time, maintaining consistency in delivery, making upward adjustments in the quality of work based on market demands and keeping a great client-agency relationship charts the business on the growth path. Taking all these steps, moving high mountains and deeper valleys to realize all the goals in the growth plan leads to the ultimate realisation of an elevation in the business structure, process and yield. A dive in the doing waters takes one beyond the mind to the actions of primarily the head.

The team lead with the growthleadership mind-set must first begin with improving on himself or herself and his/ her innate leadership qualities. Managers who show great leadership qualities can inspire their teams to accomplish amazing things. The other arm of the branch is the team. Accomplishing pragmatic coups also relies heavily on the efforts of a team; a team sharing the leader’s vision and possibly having the growth of the business at heart.

Against this backdrop, there must be a conscious effort to build a solid team. It is said that one is as good as his/her team. Therefore, a growth-leader must bear in mind to grow his team. The collective powers of the team under the effective supervision of the leader results in high performance which steers the growth wheel, thus, it is paramount to invest largely in developing the team.

This ranges from helping them develop their skill set, expanding their knowledge scope in their respective fields to providing little things like increasing their vocabulary. How? Small or big steps like enrolling the team is training programs, pay for them to attend seminars, buy books and share weekly reads with them. One cannot give what one doesn’t have.

The team can only reproduce what they know, make sure their pool of knowledge is so large and deep and they would draw when needed to always over-deliver set targets – pleasing the clients and accruing more business as a result; more deals, more profit. Again, the leader who grows his team also breeds a sense of trust and loyalty from his or her team. On average, after graduating from college, a millennial will change jobs four times before they are 32.

Most of them also don’t feel empowered on their current jobs. There is therefore the need for the team lead to consciously spend time and energy in developing the capacity and general ability of his team mates. For instance, a team’s social media manager in a team whose leader sets him or her up to be a Google certified digital marketer not only now has the capacity to take on more responsibilities for the team and add value to the team, but also appreciates his/her leader by remaining loyal to both the business and the leader; more value for less.

A great leader and a great team need a great structure to realize the business’ full potential. A business structure that works; one that eliminates time wasters like micromanaging, red taping and unnecessary bureaucracy. A system that is designed to work its best with little or no supervision. For instance, in a business operating system where productivity depends on 50% of the man power or human resources, outputs are likely to be higher than one relying on 80% of man power.

Automating systems eliminate chances of human errors and ensure that the best work is delivered to a client each time. Adopt modern technology to set targets, reminders, achievement scale, simplify the system, have a tracking and reporting framework that shows what is happening when it’s happening and who is responsible for what. This gives the opportunity to weed out non performing team members, reward performing once and modify strategies in order to meet set goals.

The time a leader spends in micromanaging his team could be used more productively in ventures like research into trends and better ways of exceeding client expectations. While it is true that people do the things you inspect and not those you expect, it is also imperative that one creates a system that does the monitoring on behalf of the leader to churn out great results and total progress on the growth ladder.

Achieve Set Goals and targets

The growth mind-set is backed strongly by the will to achieve and over achieve. This phenomenon also rests in the mind; that every challenge has a solution and that no mountain is too tall to climb, forms the mind-set an achiever. With an excellence-driven team under a growth mind-set leadership utilizing an efficient business model or procedure, consistently achieving is inevitable and more importantly business growth is not far from reach.

Growth-leadership mind-set incorporates the use of one’s mind-set to grow, taking productive action that is result oriented and finally achieving set goals and targets. In these disruptive times where new technology and innovations are springing up, one needs to be abreast with everything.

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