Building Agile Organizations: Adapting Faster

Speed and efficiency don’t happen by accident

Published: Monday, November 29, 2021 - 12:02

Many organizations feel the need to be leaner, faster, stronger, more adaptable, and more profitable. The right tool set to get them to that outcome may not be intuitive or singular. Building organizational agility is a solid approach to help organizations develop the capacity to perpetually evolve.

Organizational agility enables companies to accelerate their ability to sense and adapt to the volume, complexity, and rate of change organizations face in the current environment. We believe business agility is comprised of four main elements: strategist leadership, nimble culture, lean principles, and agile methods.

The challenge

Change is accelerating across all sectors of organizational life, largely driven by technology, geopolitical changes, and strong academic research. This accelerating change in disparate sectors comes together to drive organizations to develop the capacity to perpetually evolve, often quickly, to set trends, or to respond to forces that are changing the market. Although this volume and pace of change seem daunting, the most successful organizations address them by developing organizational agility.

According to a January 2018 article in McKinsey Quarterly:

“The urgency imperative places a premium on agility: It enables the shift to emergent strategy, while unleashing your people so they can reshape your business in real time. It’s also a powerful means of minimizing confusion and complexity in our world of rapid-fire digital communications, where everyone can—and will—talk with everyone else, gumming up the works if you don’t have a sensible set of operating norms in place. Agility is also the ideal way to integrate the power of machine-made decisions, which are going to become increasingly important to your fundamental decision system.”

The approach

Four key elements must be implemented to build a truly agile organization, and they all must be addressed to create the optimal solutions. It’s insufficient to have an agile organization and leaders who aren’t agile, thereby impeding the process. Correspondingly, any of the four elements can impede the progress of the whole system. That said, some progress may be better than none, and different elements may be implemented using a time-phased approach leveraging the agile concepts.

Agile organizations can be found in most segments of society. Businesses, nonprofits, associations, nongovernmental organizations, and even some segments of government can leverage the four elements to become more agile. Each will have its constraints and look different, but the principles hold true across a wide range of organizations.

Companies in dynamic markets, and those applying innovation in particular, must run agile organizations, but we believe that all organizations should demonstrate organizational agility now or soon, given the accelerating rate of change.

To create organizations that are perpetually evolving, companies need to understand each of these four elements and master when and how to use them.

Strategist leadership mindset

Leaders of agile organizations need to think about their organizations differently, and update their leadership thinking and behavior, not just their processes. If you approach implementing organizational agility like you approach a system change, you’re likely to suboptimize the impact or completely fail—possibly leaving your organization in worse shape than when you started.

The key takeaway is that leaders not only need the technical skills to transform an organization, they also need a different mindset: They need to value flexibility. They need to be willing and able to change what they do and how they do it, and they need to be intellectually versatile and reflective. Leaders who demonstrate these traits can inspire others to follow them in times of uncertainty because they embody nimbleness.

Nimble culture

When creating agile organizations, it’s imperative that the culture and underlying agreements about how you think and what you value align with the organization you’re trying to create. These agreements either will support or undermine the overall transformation. Agreements could include topics such as “We put customers first,” “We’re transparent in our communications with one another and with our customers,” “We conduct rigorous experiments in appropriate areas of our organization,” and “We learn from everything we do.”

Lean principles

Being lean is a systematic approach to making an organization more effective and efficient. Lean thinking involves increasing efficiency, reducing waste, and improving the value delivered to both internal and external customers. This requires continual assessment of practices and processes to ensure that “just enough” is done and that processes serve the agreed-upon objectives and goals while delivering as much value as possible to internal or external customers. If the customer isn’t requesting or paying for it, you should challenge why you do it. In my conversations with leaders in this space, I’ve learned that being lean is included as a building block in agile development methodology, but not all lean processes are agile. Lean thinking can be used in all parts of the organization. Many organizations don’t realize it applies equally to delivering a service or improving physical production.

Agile methods

The fourth element of an agile company is the actual agile-development methodology based on the Agile Manifesto. Agile software development, for example, is a process or methodology that focuses on customer value as much as possible. It requires cross-functional teams to come together and work in a committed way to develop features in fast iterations called sprints. A focus on customer feedback and time to value realization are key.

Agile organizations focus on driving strong partnerships with their customers and quickly adapting solutions to meet their changing needs. They identify minimal feature sets, prototype aggressively, test new features, and use incremental go-to-market strategies. New products and services are encouraged to fail fast rather than wait for perfection, which is elusive.

During this era of accelerated change, increasing complexity, and increased interconnections across sectors, organizations must build the capacity to proactively navigate the changes affecting them.

First published Nov. 8, 2021, on the thoughtLEADERS blog.

About The Author

Maureen Metcalf

Maureen Metcalf, founder, CEO, and board chair of the Innovative Leadership Institute is an expert in anticipating and leveraging future business trends to transform organizations. Her award-winning series of books are used by public, private, and academic organizations to align companywide strategy, systems, and culture with innovative leadership techniques. As a preeminent change agent, Metcalf has set strategic direction and then transformed her client organizations to deliver significant business results such as increased profitability, cycle-time reduction, improved quality, and increased employee effectiveness. Metcalf is the host of “Innovating Leadership Cocreating Our Future.”