Agile Organizations: Capabilities for Thriving in Turbulent Times

“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one most adaptable to change.” - Charles Darwin

Steve Crom
For 35 years, I have supported leaders and organizations in achieving sustainable breakthroughs in performance.
8 minutes
16 April, 2020
  • In an everchanging world, reading the environment and changing ways of working in adaptive ways is crucial. Change itself, being able to adjust quickly, has become a core competence.
  • Key features of agile organizations include a compelling unifying purpose, a flexible and team based structure with agile governance, lean signature processes and experimentation, empowered capable people, a culture of learning and collaboration, all fostered by agile leadership and supported by fit for purpose technology.
  • Strategizing, Perceiving, Testing and Implementing routines (capabilities) are core to agile organizations

Introduction

It is typical today for organizations to go through structural changes every 2 to 3 years. If it takes 1 to 2 years for people to settle in their new roles and ways of working; plus, deal with changes outside the organization over which we have no control, then change never really stops. Change has become constant; hence, the increasing attention on agility. It is like building earthquake resistant structures. You do not know when the next shock will come, so you better plan and be prepared for it. What are the design principles of adaptive organizations and the capabilities needed to thrive (not just survive) in a world of constant change? How can organizations set themselves up to turn turbulence into a competitive advantage?

Agile Organizations

Research and our experience show that there are 5 common elements in agile organizations:

  • Clarity of purpose gives people a sense of direction and meaning that is both motivating and empowering.
  • Stability through reliable processes and confidence that one has a place in the organization frees up people’s energy to be their most creative and productive.
  • There is sufficient capacity to work on the business, not just in it i.e., to improve and build new capabilities.
  • Experimenting to discover, design and test innovative ways of working, services and products is expected i.e., the norm.
  • There is an obsession about customers, anticipating, shaping and filling unmet needs.

How do these principles shape the operating model of agile companies?

The heart of an agile organization is a unifying, stable and shared purpose beyond profit and growth. SOBI, a pharmaceutical company that treats rare diseases, has as its purpose “Giving patients, their families and loved ones hope!” that they can live fulfilling lives. The purpose gives direction for strategic decisions and guides day-to-day decision making likewise. It is the emotional essence that provides a sense of belonging and motivation for the staff.

With purpose at the core, agile organizations are fully customer focused. They constantly scan the external environment to capture and leverage insights and opportunities. They look ahead, create the future, constantly experimenting, prototyping and testing ideas. Agile teams succeed or fail fast. New ideas can be funded quickly without waiting for the next annual budget cycle.

The culture in agile organizations encourages challenging the status quo, doing things differently having the courage to confront dogmas (sacred cows) and propose creative solutions. Anchored by clear strategies and a strong common purpose, there is a lot of autonomy to innovate. Mistakes are seen as opportunities to discover, learn and grow. The mastery of core technical skills and subjects is valued and integrated in diverse, high performing teams. Leaders inspire, engage, develop, coach and empower.

Organizational structures in agile organizations are fluid, flexible, team based. They are more like solar systems with teams (planets) revolving around the core (sun) that provides resources and coordination. Roles within networked organizations are rich (multifaceted) with clear accountabilities and authority. Inevitable conflicts can be openly discussed and resolved through light governance bodies.

People in agile organizations are disproportionately self-motivated. The most successful teams are attracted to complex, messy challenges. They love to make sense out of chaos. They are constantly challenging themselves, pushing their personal boundaries, learning new skills and are open to diverse perspectives. They are inspired and inspiring, superb at collaborating internally and externally. Their antenna for what’s going on in the outside world are always on, among the first to pick up emerging signs and signals. They are super quick at connecting the dots, seeing patterns and navigating trends.

In agile organizations, how performance is measured and managed is transparent, fostering nimble ways of working and collaboration. This nurtures meritocracy, regardless of age or status, those who contribute the greatest value to the enterprise are recognized and rewarded. Poor performance is quickly addressed to help teams and/or individuals correct course, change roles or organizations.

Processes in agile organizations are as simple, lean as possible, predictable yet flexible. Root causes of problems are rapidly identified, problems solved and decisions made quickly. The focus is not on perfection, rather on quickly getting better i.e., minimally viable solutions. Standard ways of working enable people to “plug and play”, especially important as individuals change roles and teams.

Agile organizations manage projects well. A portfolio of projects is rigorously aligned to strategy, resourced and led by dedicated, trained project leaders and teams. There is flexibility in resource re-allocation as projects develop are closed or discontinued.

Information and technology are designed to enable lean, flexible ways of working. There is easy access to knowledge to encourage rapid application and close-looped learning. Information is available on an “as needed basis.” New technologies and systems are adapted quickly. Investments are made in operating platforms that are scalable, able to easily accommodate growth.

Agile Capabilities

According to Worley, Williams and Lawler , the capabilities of agile organizations can be summarized as:

Strategizing      How senior leadership teams establish an aspirational purpose, develop a widely shared strategy, and manage the climate and commitment to execution.

Perceiving        The process of broadly, deeply and continuously monitoring the environment to sense changes and rapidly communicate these to decision makers who interpret and formulate appropriate responses.

Testing             How the organization sets up, runs, and learns from experiments.

Implementing   How the organization maintains its ability and capacity to implement changes, both incremental and discontinuous, as well as verify the contribution of execution to performance.

Leaders themselves have to embody and be role models for these capabilities for organizations to be agile. The most important attributes of agile leaders are these:

Develop vision & purpose

  • Co-develop vision, values and purpose with stakeholders to ensure alignment
  • Constantly communicate big picture & ambition
  • Provide strategic framework, direction, clear goals and ownership of initiatives
  • Allow for flexible adaptation of goals based on evolving business needs

Be entrepreneurial

  • Anticipate trends & define strategic priorities in light of uncertainty
  • See opportunities beyond scope of own role and influence others to adopt agile, lean start-up, ways of working
  • Partner with stakeholders to get the resources needed to develop, test new ideas
  • Build a coalition to lead necessary changes

Role Model Expected Behaviors

  • Co-define the behaviors expected to realize the company’s vision, values, purpose and ambition
  • Hold yourself and others accountable for both outcomes and behaviors
  • Invite and appreciate diverse contributions
  • Respect and integrate the opinions of others
  • Be self-aware, humble & willing to sacrifice
  • Challenge yourself to stretch, learn and grow

Foster experimentation

  • Encourage challenges to status quo
  • Encourage innovative thinking and diverse points of view
  • Reinforce & reward experimentation & change
  • Define norms of risk taking
  • Re-frame failure as source of learning, while still holding people accountable
  • Satisfy the need for security and belonging

Empower & delegate

  • Encourage and enable others to take on more responsibility for initiatives and their outcomes
  • Delegate decision making to the lowest organization level feasible
  • Foster collaboration via self-organized cross functional teams

Foster development

  • Identify organizational capabilities needed to fulfill vision, purpose and implement strategies
  • Define critical positions & necessary competencies
  • Sponsor learning & development initiatives for personal growth
  • Coach for decision making, enable to take decisions rather than deciding on own
  • Recruit, develop and retain diverse talent

They are far from the profile of a traditional leader who sees his/her job as to command, control and critique.

Conclusion

Every company, organization in all sectors of the world economy are confronted with social, political, technological and environmental changes which simultaneously carry huge risks and unforeseen opportunities. Those that create adaptive, agile operating models and acquire the capability to strategize, perceive, test and implement quickly will not only survive, but will thrive!

 

 

Includes Worley/Lawler “Agility and Organization Design – A Diagnostic Framework”; Economist Intelligence Unit – Organisational Agility: How business scan survive and thrive in turbulent times; McKinsey – “The keys to organizational agility” and “agility it rhymes with stability”; HBR – “How to thrive in turbulent markets”

“Assessing Organisational Agility” by Christopher Worley, Thomas Williams, Edward Lawler III (ISBN 978-1-118-84711-4)

 

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Comments

Venky Gopalaswamy
12:50 PM, 21 April, 20

Overall it is a very good article. The Elements, operating model etc are spot on.
I would offer the following:
(1) leaders (especially top leaders) Must constantly and visibly demonstrate agile behavior.
(2) agile behavior and results must be celebrated
(3) the org purpose must be clear and compelling (not just high level language!) and must be promoted actively. Eg JNJ credo

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