How (and why) to be an agile organisation

As mentioned in last month’s article about Artificial Intelligence, the world of work is continuously evolving. This demands that we all operate in a more agile way.

Being an agile organisation is a competitive differentiator. Not many organisations have completely transformed, although some are moving towards it. For example one of my clients is introducing agility in a big way. They’re transforming the way they work and disrupting the traditional ways of operating. Some organisations haven’t started yet, particularly those who are strongly wedded to hierarchy. But, if they don’t keep up, their business will disappear like Kodak and other big names who are no longer trading.

This article looks at the key factors to become more agile at the organisational level, some of the things you’ll need to let go, and the mindset you’ll need to embrace (especially if you’ve been working in the traditional way for ten years or more).

Why is everyone talking about the need to be an agile organisation?

Traditional organisations are designed to be stable, working within a somewhat predictable environment. Controls are in place, and there’s a well-established hierarchy for decision-making and flow of information. However, we’ve been operating in an uncertain, fast-paced global environment for the last few years. Digitisation has changed pretty much everything, and will continue to drive how companies do business. Organisations continually have to adapt and respond. Being successful in this digital economy means being agile.

What does an agile organisation look like?

An agile organisation will continue to embody some of what made it successful in the past, such as a focus on people, maintaining a degree of stability, and holding accountability. But it can also move faster by adapting more quickly, embracing collaboration, enabling innovation, and with a constant cycle of iterative learning.

Criteria for success in an agile organisation

Here are some of the key things to think about:

Purpose and direction

Purpose has always been an important driver for an organisation, and continuing to have a clear North Star to follow is essential as it guides your decision-making criteria and practices in a culture that has freed people up to use their judgement and make more decisions independently. It’s become even more important to be customer-centric than it was in the past.

Structure

Organisations are typically built on a hierarchy with clear lines of authority spanning up and down. Now there is a new word that has entered the organisational dictionary: Holacracy.

This kind of structure breaks down the traditional pyramid structure. Instead of operating top-down, power is distributed throughout the organisation, and employees are empowered to act on any tensions and problems they see.

It also impacts the flow of information. In a traditional hierarchy, knowledge was held at more senior levels and cascaded down as deemed appropriate.

In today’s agile environment where the need for speed is fundamental, information needs to be transparent, readily updated and easily accessible, so employees can respond in an informed way.

The structure (and actually, most of the focus) should be purpose-driven rather than cost-driven. For more on this, please see my article: Start with why: How great leaders inspire everyone to take action.

As employees have more freedom to think and act, it’s important they understand, and feel passionate about, the purpose of the organisation and its strategy, so they can make informed decisions.

I’m seeing some of my clients move away from the traditional structure of five layers and a maximum of eight direct reports. They are still modelling a flat structure, but they are not so constrained by the number of direct reports because the leader spends a larger proportion of their time leading and guiding the team and the individuals within it.

Teams

Teams are a key component of an agile organisation but they quickly come together and disband just as quickly.

The agile organisation is no longer a place where there is frequent large-scale restructuring, but more a place where teams ebb and flow as required. Teams tend to comprise a smaller number of people working on bite-size projects, with the authority/independence to make decisions and execute without recourse to senior level approval. They learn by doing, adapting and iterating as they go. They collaborate with other teams, co-creating with other internal functions and external partners, including customers.

A small team might work direct with customers to get feedback about whether they should continue or stop each project. It’s a mindset of experimentation, where people have to let go of any need to protect their individual reputation for delivering performance and results.

It’s important to get a range of skills and personalities in each team, so you benefit from diversity of thought and ideas.

A McKinsey report stated that a key skill of leaders is the ability to establish teams – quickly. As you may know, that’s one of the areas I specialise in, so I can help you think this through if that would be useful to you.

More on agile teams next month…

Database

It’s really important to have a strong system for holding up-to-date information about employees, so the right people can be pulled together quickly to form a team. The bigger your organisation, the more critical it is to have a framework for systematically collecting and measuring that data. This data could include qualifications, skills, experience, strengths and career aspirations. Maybe it could also include testimonials from colleagues from recent teams?

In the spirit of employees being responsible for their own careers, they can contribute to keeping that database current.

Networks

Because the command-and-control management style is on the way out, you need to break down those traditional up/down silos and stop only inviting senior people to your big important meetings.

Collaboration and co-creation are now fundamental to success, so personal networks are key. You therefore need to think about investing in communication tools and software that enable belonging to a network and networks talking to each other.

People who need to be joined up should be able to talk and create together in a more informal, perhaps even a playful way. Having different types of workspace available for different types of interaction can facilitate this more relaxed way of working.

Homes

As companies become more agile and teams come together and disband, it is my personal view that employees want to have a ‘home’ somewhere in the organisation, where they can develop their technical knowledge and career with others from the same profession. To connect with others who are like them in some way.

This might be based around their background e.g. finance, legal, engineering or whatever. It’s like a ‘job family’ where they can go for support and challenge to maintain their professional expertise. There, they can learn from each other, get sponsorship and mentoring or career development, or develop specific skills and experience.

Culture

One of the things I believe makes the difference between success and failure, is the cultural mindset of the organisation, which feeds its leaders and employees.

It should be a culture:

Where employees are empowered
That trusts its employees to know what to do, and to do the right thing
That models psychological safety
That has a spirit of experimentation and openness
Which models a learning culture not a performance culture
That learns from problems and builds on successes, spreading what works well across the company (this is the model known as Appreciative Inquiry)
Which models the practice of feedback, because that can be powerful in building trust and relationships as well as your own skills

Culture will be the difference between success and failure of developing an agile organisation – remember the quote “Culture eats strategy for breakfast”? Focus on getting this right, and you significantly increase your chance of being one of the first organisations to successfully implement agility.

Practices

I once worked with a company that had a very entrepreneurial culture. At the time, it was transitioning between being a small business to a large one. What was good was that people were empowered. They had processes to follow but they were more like guiding principles or guard rails to comply with corporate governance and legislation. Within those, employees had freedom to apply their own judgement.

This contrasts with another company I knew where all process documents were at least three times longer. Everyone got bogged down in this unnecessary level of detail and complexity, and nothing changed very fast. They couldn’t use their judgement – that’s no good when we’re usually faced with a situation that has its own context and set of dynamics.

Top tip: Think about the absolute minimum organisational practices you need, and don’t do more than that.

Summary

It’s very easy to dismiss the past as old-fashioned, but agility is taking the best of before and evolving it.

You will always need some form of hierarchy, governance and stability or everything will feel out of control and employees will get stressed. You will always need to create an environment where people can feel comfortable and safe. A place where they can grow and develop.

MOVE…	From	To
Culture	Institution, efficient, stable	Purpose, adaptive, stability in the centre
Leadership	Command and control	Facilitator/Coach/Catalyst
Teams	Embedded, “permanent”	Informal, equality, fast results
Careers	1-2 across working life	Multiple
Processes	Directive, detailed	Principles, guidelines
Mindset	Tell or be told	Freedom to think and act

Next month

Have you started to think about yourself in this new, agile world? What skills and mindset do you already have that will enable you to thrive? What do you need to develop?

You’ll get more information in the next two articles.

In May, we will explore more about agile teams, and in June, we focus on the skills and mindset you need to be an agile leader.

The Padfield Partnership