AT TM Forum Live! Asia, Bernie Trudel will give a presentation entitled Agility is a journey not a destination. This article is an introduction to the topic.
Agility(n): the ability to be quick and graceful, to act with speed and nimbleness.
Organizational agility is the ability to routinely adapt to market and environmental changes while maintaining the existing stability of the organization. It is often equated with a desired end-state which businesses are striving to reach.
Four phases of organizational agility
Today, we see successful businesses constantly adjusting goals, questioning assumptions and innovating processes in order to improve their productivity and competitiveness. Their organizational agility journey can be characterized by four cyclic phases:
- Evaluating their current culture to discover impediments to agility;
- Evolving the key organizational components that result in agility;
- Understanding the technology changes that can enable further agility;
- Driving incremental cultural changes that contributes to the agility journey.
Organizational culture is often the underlying driver for the automated behavior and decision-making of a business. For example, a process-oriented culture is guided by the policy that is codified within the major processes that keep the business running.
Similarly, a function-based culture is guided by the relationships formed between each functional group. While these two models may result in a smooth-running operation, they often lead to cultural rigidity in which there is a fear of failure and little appetite for risk and change.
In order to start on the agility journey and evolve processes and functions, these types of organizations must be willing to question their culture and allow for individuals to initiate change for their piece of the business. This often must start with a top-down leadership change in attitude to leveraging the complete organizational intelligence. So what are the crucial organizational characteristics that lead to agility?
- Management style
Management style is certainly one of the crucial organizational characteristics leading to agility. There are countless examples in the literature for which management modifies their command and control bias and empowers employees to recommend changes based on their knowledge and experience of their role within a process or function. This can often lead to a reduction in waste and improvement in productivity.
- Data-driven change
Furthermore, in a digitally-driven organization this type of positive change can be enhanced greatly by leveraging data analytics collected from sources in both the supply chain (raw materials to finished product) and distribution loop (warehouse inventory to consumer centricity).
- Spirit of innovation, culture of collaboration
If this approach is coupled with an innovative spirit, in which trial and failure cycles are categorized as learning opportunities that result in advancements, then a culture of collaboration is a natural outcome that leads to rapid adaptation with little disruption.
Is it worth the effort?
Cultural change is not easy, so one may ask – are the benefits of agility worth the effort?
Absolutely – especially if you are in a technology-based industry – in fact, I would argue that all industries are technology-based (or will be in the next five years.) The caveat is: as much as business leaders would like this cultural evolution to take place in an accelerated fashion, it has been repeatedly shown that change is a multi-year journey that is best undertaken in an iterative approach by cycling through the four phases described in this article.
But this is possible, thanks to technology in the 21st century being characterized by software-defined functionality based on increasingly commoditized hardware. We’ve seen this trend, combined with “born-in-the-cloud” companies some of which quickly reach “unicorn” status, it is not surprising that many board-level discussion, of incumbent businesses, center around how to take advantage of technology advances and participate in their industry’s digital transformation. An evolution towards a service-oriented culture, in which the productivity of the service offering and a customer centric attitude are both principal drivers of the key performance indicators, will result in forward movement along the agility journey.
Many IT organizations that have been on this journey have experienced significant benefits. DevOps is a recent IT evolution which illustrates how cultural change across the IT organization can lead to significant improvements in customer satisfaction. The collaboration between development and operations results in faster application development and significantly higher service ratings from business users.