As organisations embrace the idea of being agile, why do so many struggle with the realities of implementation and the impact on project success?
In a world where responsiveness and quick reactions to a constantly changing landscape define competitive advantage, why do so many organisations struggle with agility? We see a recurrent theme in most cases: the lack of consistent frameworks and structures that enable alignment across individuals, teams, business units and regions.
Business agility has become an essential ingredient for high-performance organisations, yet we see them being challenged on how to achieve sustained agility, especially when they are transforming their core ways of working via large programs.
So what can be learned from high-performing organisations that have embraced agility and how does this translate for organisations that want to become a more agile, adaptive business?
Striking the Balance
McKinsey’s recent report, Agility: It rhymes with stability, states that high performing agile organisations have managed to be both stable and dynamic. They identified the criticality of establishing a core set of fixed business elements that, at first glance, appear to be counter-intuitive: Change, structure, governance and process.
Despite appearing counterintuitive to working in an agile way, the backbone is worth striving for. Recent research suggest that companies that demonstrate both speed and stability have a 70% chance of ranking in the top quartile for organisational health, which is a key predicator of strong financial performance.
Developing this core framework provides the stability to develop products in a dynamic and rapid way. This differs from a typical ‘skunk works’ type structure of small teams innovating outside of the mothership, because it provides a solid framework where innovation, nimbleness, speed and adaptiveness can occur within the mothership.
The Opposing Forces of Speed and Stability
In a business context, speed and stability do not appear to be natural partners. Start-ups are nimble but typically not stable. Large multinationals are stable, but not traditionally known for being nimble and dynamic.
For organisations to have both the stability of a multinational, yet develop the agility of a start-up, four core organisational components need to be in place:
- Change, defines the way people will need to work together and appropriate behaviour and actions;
- Governance, which decrees how decisions are made;
- Organisational Structure, which explains how the individuals in a team are allocated; and
- Processes that outline how it will get done.
High performing companies that continually redesign how they are organised to respond to a dynamic market need to strike the balance between speed and stability. At first, it’s a daunting prospect. Starting the journey means it’s critical to have change management established as an early discipline and in particular, solid change leadership.
Sustaining real change (transformative change) means establishing the behaviours required for success from the outset. Ill-defined statements about vision and culture are not what’s required; however, outlining the behaviour for the new way of doing things will drive success.
Negotiating these considerations upfront with the leadership, gaining alignment and ensuring that actions are consistent throughout the organisation is vital. Achieving buy-in and adoption within the organisation will make the journey smoother. How people behave will illustrate if sufficient trust and collaboration is in place to help – not hinder – the agility journey.
Many organisations run complex programs concurrently and with significant cross-over between multiple parties, which can cause a significant slowdown in both decision making and progress.
Achieving the right level of governance is instrumental in becoming an organisation that is both stable and dynamic. Positioning the decision-making power at the right level with the right team (or individual) can ensure that decisions are made at the appropriate speed and the right amount of consideration.
Successful organisations typically have charters that clearly outline what can be decided by individuals versus what requires a committee decision. Committees will also have clearly defined charters for each participant, which clarifies each person’s responsibilities and avoids the overlap or confusion about what they are responsible for.
It’s this focus on fit-for-purpose governance across the organisation that is a critical ingredient to develop a collaborative and trusted environment which enables robust discussion, focused on good decision making.
In the article mentioned above, McKinsey recommends a structure that splits out the individual’s primary role within the core of the organisation, with a secondary role that is then fluid to align with the delivery of the initiatives that require greater agility.
Each person provides their domain knowledge and skills, but remains secure in the core of the business and not subject to the success or failure of business initiatives. The cross-pollination in agile teams is critical: cross-functional teams built with trust and collaboration align quicker and typically achieve greater levels of success.
Organisations that design their primary structure to only match dynamic needs (instead of the primary and secondary structure) risk being out of date and unable to support future demands. This can be an expensive, painful exercise and in some cases, severely damaging to the business.
Core corporate processes should be well-defined and made stable. Standardisation of language and ways of working are key, as are establishing fundamentals that ensure that everyone knows how critical tasks are performed, who does what, when, and how process stage gates drive the timetable.
Once this is in place, teams can move quickly and individuals redeployed efficiently to new areas where everyone speaks the same language.
The combination of the four pillars enable organisations to raise their level of business agility to become more competitive. The right behaviour (change), efficient and nimble decision-making (governance), primary and secondary roles (structure) and a unified language and processes (process) enable business to drive trust and collaboration between cross-functional teams, making for a powerful force to create a business that is both agile and dynamic.
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