What is Organizational Agility?
Running a business in today’s world is not as easy as one may think. Several changes may happen rapidly, challenging business operations. Without the right preparation and a clear guideline on how to respond and deal with these, one may have to wind up his/ her company. You do not have to go down this path; there is a solution.
This article looks at organizational agility, definition, competency, approaches, how one can measure it, and some classic examples. Let’s get started!
Organizational Agility Definition
Simply put, organizational agility is the ability of a business or organization to find its bearing, adapt, and change quickly in response to a turbulent or rapid change of environment. It is a crucial requirement in business operation regardless of the size or scope, especially in today’s digital environment.
Organizational agility is necessary for business development and sustainable revenue growth. It involves collaboration and executing different strategic goals and proper response to an ever-changing market riddled with absurd business demands.
Organizational Agility Competency
Organizational agility competency focuses on how lean-thinking people and agile teams can optimize the business processes, develop useful strategies, quickly turn around the organization, and adapt well to take advantage of new opportunities. There are seven lean enterprise competencies that must be adhered to if an organization seeks organizational competency.
Like the large ones, different businesses are still struggling to achieve organizational agility, despite being necessary for operation. Such companies have a legacy, and most of them have taken advantage of managerial hierarchy to grow and expand their operation.
This method involves managing operations from the top-down, with all management happening at the top. Therefore, achieving agility becomes an issue when such companies try to switch and put different experiments to become more flexible by offering more space to the junior managers or employees. Most of them end up sticking to their past legacies because it has always worked for them in the past. They continue ruling everything from the top down without care of the ever-changing business world.
Organizational agility requires more than rules and rigid structures. It requires dynamicity and stability. It needs real leadership, one that can blend in with today’s world. It involves a reduction of hierarchal systems and rigid processes, which most businesses find hard.
Organizational agility requires a level of organization in the business and leaders who can think outside the box and tackle things that do not show the potential of ever-changing in the industry and its operations. These hardly changing issues can be used as a stable foundation for the company.
How can companies or organizations achieve greater agility? Well, there does not exist a specific key to greater agility. Research shows that several companies have managed to be agile over the years, whether large or small.
Some essential tips that one can learn by having a closer look at these companies are how they are set up. The first way of achieving organizational agility is by setting up the organization to take care of both stability and dynamic capability.
This covers a range of things, including some the business may not know that it needs. This type of stability and dynamic practice involves the organization’s structure, the processes, and employees or stakeholders.
As we mentioned, several people build their businesses and believe that the work is complete. However, they soon find out that that organizational agility starts from the business structure.
One needs to look out for overall governance and committees empowered to approve different things and decide on the business operations. It is also essential to pay close attention to the delegated authorities, the constituents of a role, and decisions left to other members. The structure is, therefore, more than just managerial hierarchy.
A company also needs to take care of the processes to achieve organizational agility. Some of the essential questions that should be asked include how the methods work, activities that may add value when brought together. The decisions that may be made as different activities occur.
While on decisions, essential questions such as who makes them and how they get measured must be asked. Most organizations revert to management hierarchy once developing metrics and setting targets prove to be successful. However, this should be done with reinforcements on the set structures. If not done, the structural foundations in place may worsen since not everyone is working on the same objective at the lower level.
Therefore, if a company is set on managerial hierarchy, it needs to identify specific fundamental metrics in a given process and ensure that all the functions touching on the approach have the same metrics and targets. This is essential for collaboration, a necessary determinant of organizational agility.
Such organizations must spot the key value-adding activities and decisions \s touching on the entire business operations, from the management to the consumer. After that, the decision processes should be lined up separately from the management hierarchy for correct measurement. People taking up in these value-adding activities should also share in the objectives and metrics of the business.
The last part of achieving agility is based on people. An organization must always think about stability and dynamicity when it comes to people. The most dynamic aspect when it comes to people is resource allocation. This includes using flexible or temporary labor.
You can achieve several things faster when it comes to people, but at the same time, one needs to understand that there exist specific stable parameters on setting up its people, with one of them being culture.
Culture does not easily change, and it may take somebody several years to build one. Building a rich culture also requires a lot of thinking. Therefore, one of the stable elements while striving to achieve organizational agility is an organization’s culture.
Most agile companies are unique when it comes to the people and culture they have built over time. Therefore, from this discussion, the three main domains that determine agility are process, structure (which includes people0 and governance(leadership).
Organizational Agility Approaches
There are different ways of driving organizational agility in organizations and firms. For organizational agility to be successful, a firm must be forward-thinking. Such a firm should have developed several tools and ways of working to achieve organizational agility. It is also necessary to have the right mindset and not just the tools.
Employees must have the right mindset to adapt to several changes in the business world. It is proven that employees who strongly believe that their companies can meet the changing needs can advocate for their organizations.
There are three approaches to organizational agility, which is anticipation, adaptation, and acting.
A company needs to view an abrupt change in business as an opportunity to disrupt, be it within the organization or in the entire industry. This can be achieved by inducing change regularly, either by shifting different talents or making the organizational hierarchy friendlier and more approachable.
Like we mentioned previously, rigid silos and hierarchies can inhibit teamwork. These should, therefore, be broken down and replaced with a collaborative spirit. An organization needs the collective effort of all its workforce.
Therefore, to prepare employees for abrupt changes, an organization should create a learning culture to create and share their knowledge and even get rewarded as they do so.
This is usually the last step in any plan of action. After all the planning has been done, an organization needs to minimize the managerial hierarchy and bureaucracy and instead empower all individuals and different teams to make decisions.
The surest way of achieving stability is through smaller teams grouped based on the different members’ capabilities. The organization should also come up with a talent ecosystem that comprises gig workers. After extensive research, you will notice that it is the agile teams responsible for some of the most significant innovations in different companies today.
How To Measure Organizational Agility
There are five ways of measuring organizational agility. These are:
- Though Agile Fluency
One can measure agility by tracking the agile Fluency Progress of the business. Diana Larsen and James Shore developed this to help all teams work at the level of fluency needed for the business needs.
- Using available top metrics
You can use different metrics such as cycle time, failed deployment, and age velocity to measure your organizational agility. You can also look for different agile evaluation metrics.
- Reviewing scrum performance
You can create a scrum checklist that acts as a guide to agile teams in reviewing their process. Ensure that the given inventory works for your team.
- Come up with your measurement process.
You can also create your won measurement process instead of relying on pre-packaged evaluation processes and means. Just ensure that you are creative enough.
Organizational Agility Examples
A classic example of agility is how Netflix dealt with Blockbuster, one of its biggest competitors. It carefully listened to its customers and established what they wanted before sending them DVDs for a Blockbuster-like experience at the comfort of their home.
Organizational agility is essential for business success. This article should offer some insight into how businesses can respond to different abrupt changes in their environment.