We live in a world that is more interconnected, more volatile, and more unpredictable than at any point in our history. Where once it was enough to administer existing products and services efficiently , today, with ever-decreasing product and company lifecycles, that is no longer sufficient. Equally important to many organizations is the creation of valuable new products and services, together with the ability to reinvent themselves continually in the face of constant change and disruption. This is the crux of business agility.
Despite this challenging new business climate, it seems that many organizations remain perfectly evolved for a context that no longer exists. Contrary to popular belief, merely adopting a few trendy new processes, tools, or technologies will not lead organizations to become more adaptive, more responsive, and more innovative. Those taking this approach almost invariably face frustration and disappointment. Just as seeking to install an Android app on an iPhone powered by iOS will inevitably lead to failure, seeking to install modern business practices in an organization with traditional cultures, structures, policies, and leadership styles will yield the same disappointing results. The inconvenient truth that many continue to overlook is that to get meaningful results, the underlying organizational operating system must be updated to one that supports these new ways of working. This involves changes across the entire organization. There are, in fact, six key areas of focus that contribute to the creation of an organizational operating system primed for business agility. I will briefly outline each area and the vital role each plays.
The first area is leadership and management. I start here because without a shift in the mindset and behavior of leaders, nothing will else matters. Where once focusing on micro-management, positional authority, and work tasks was the norm, agile leadership involves investing in the growth of others, decentralizing decision-making, and articulating an inspiring vision, then empowering others to make it a reality. By changing how they show up each day, and leading by example, agile leaders can create an environment in which highly aligned, high-performing, self-managing teams can respond swiftly to whatever strategic challenges emerge.
The next area is organizational culture. which is the result of a company’s collective behaviours, values, and beliefs. In many traditional organizations, culture can be characterized by words such as control, conformity, fear, secrecy, and blame. These cultures stifle creativity, innovation, and the ability to evolve. More modern, creative cultures evoke words such as openness, trust, transparency, collaboration, experimentation, and psychological safety. These are all underpinned by a shared vision and values. It is difficult to overestimate the impact of culture and, as such, leaders must focus every day on the conscious cultivation of a culture that enables agility.
Next comes organizational structure—that is, how people come together to get work done. There are few things under the direct control of leadership that have as big an impact on agility as team structure. Top-down hierarchies, functional silos, and a focus on individual productivity can certainly make for efficient administration of existing products and services; this model falters, however, when it comes to creating new ones. Hierarchies are just not responsive enough to change in arenas of high uncertainty. What works better are networks of interconnected, cross-functional, autonomous, customer-focused teams working together toward a common goal. This flatter structure requires high levels of trust and collaboration both within and across teams. These take both time and conscious effort to build up.
Given that the most important part of any organization is its people, the next area focuses on just that—people and engagement. Despite being a key leading indicator of business success, worryingly few people are passionate about their work and/or organization. This has led to incredibly low levels of employee engagement. People are not excited about the prospect of going to work each day to follow strict processes and rigid rules and drown in a sea of bureaucracy. Yet for far too many, that is a daily reality. To thrive in the creative knowledge economy, leaders must cultivate people-centric workplaces with high levels of employee engagement. They must dial back the focus on conformity, rules, and processes, while dialing up the focus on trust, freedom, growth, and a shared purpose. This will allow people to bring their full range of capabilities to work every day, creating truly inspiring workplaces where ordinary people do extraordinary things.
Next up is governance and funding. This is where innovation meets finance. It involves reinventing policies and controls around how money is assigned to the work making the greatest impact. When risk and uncertainty are high, up-front business cases, rigid plans, and a focus on pre-defined outputs can become self-defeating. This is because it is impossible to know the best solutions without testing the waters. Details will only emerge over time, and change is inevitable. Modern governance practices enable small, safe-to-fail experiments, adaptive plans that respond to feedback and learning, and a focus on business outcomes. This provides maximum flexibility in an unpredictable world.
And, finally, we have ways of working. These are the processes, practices, and frameworks used by teams to get work is done. This is frequently where organizations start their journey, often failing to realize that changing these alone will have little impact. Once a compatible organizational operating system has been created, techniques like Scrum and traditional agile practices can begin to stand a chance of being effective. These approaches will be marked by collaboration, fastfeedback, and relentless continuous improvement by the teams doing the work.
It is important to stress the interconnectedness of these six domains. Sidestepping one or more will likely lead to failure to achieve meaningful change. Changes must be consciously designed, coherent and coordinated. Tools such as the Business Agility Canvas can help to visualize such changes and create alignment among change leaders. Like an athlete pulling together a strict program of the right diet, physical training, and tactics, all elements must work together to achieve the goal. Redesigning for true business agility will allow organizations to survive and thrive in an increasingly interconnected, fast-paced, and uncertain world, and to compete through a combination of operational excellence and innovation.
To find out more about the importance of organisational culture, check out Karim’s new book The 6 Enablers of Business Agility: How to Thrive in an Uncertain World. This topic is also covered in detail in his Certified Agile Leadership(CAL) course.
This article originally appeared on projectmanagement.com.