What is an agile organisation?
An agile organisation is one that is quick at responding to changes in its environment. McKinsey describes an agile organisation as “a network of teams within a people-centred culture that operates in rapid learning and fast decision cycles which are enabled by technology, and that is guided by a powerful common purpose to co-create value for all stakeholders. An agile organisation can quickly and efficiency reconfigure strategy, structure, processes, people and technology toward value-creating and value-protecting opportunities.”
“Agile” is certainly a term that’s used regularly in many organisations today. Driven by an increasingly competitive and rapidly evolving operating environment, businesses are recognising that being able to respond and adapt to change with speed and flexibility is a critical organisational capability.
The case for agile is clear. However, without a clear strategy around transitioning to an agile organisation – one that consistently follows agile philosophies, practices and processes – companies run the risk of paying lip service to the approach but failing to realise its potential.
McKinsey has identified five trademarks consistently exhibited by businesses that have successfully become truly agile organisations:
Agile foundation 1: North Star embodied across the organisation
Agile organisations have a shared purpose and vision. Intensely customer-focused, they’re constantly scanning the environment for opportunities and challenging themselves to create more value for their stakeholders. Senior leaders are clear and consistent on priorities, expected outcomes and behaviours.
With everyone aligned to the same North Star, employees across agile businesses are empowered to recognise – and act on – opportunities created by new technologies, competitor approaches and customer expectations. Importantly, the organisation’s ways of working support fast and flexible resource allocation – whether people, technology or capital – to harness the potential of these opportunities. Similarly, they’re quick to act if an in-progress project is deemed not worth pursuing, efficiently allocating these resources to a more attractive initiative.
Agile foundation 2: A network of empowered teams
Agile organisations operate with a well-defined, flat structure. Flexible, scalable networks of teams work collaboratively across physical and virtual environments with absolute clarity on each team’s accountability.
For traditional organisations, moving to an operating model that assumes that given clear responsibility and authority, workers will be highly engaged, act appropriately and deliver exceptional results is undoubtedly a leap of faith. However, unless senior leaders genuinely believe that giving employees autonomy and accountability will lead to more efficient, effective and innovative ways of working – and ultimately better stakeholder outcomes – an organisation’s shift to agile is unlikely to be successful.
Agile foundation 3: Rapid decision and learning cycles
Agile organisations work in rapid cycles where the continual iteration of thinking, doing and learning is a hallmark of their operating model. Fast and efficient decision making is encouraged – supported by clarity on who should be involved in making different types of decisions.
Decisions are made before 100% of the information is available, and often without consensus. Teams are continuously learning and making small decisions quickly, then testing and tweaking for the next iteration. All team members must be prepared to disagree with decisions but commit to moving forward with the agreed-upon roadmap.
Agile foundation 4: A dynamic people model that ignites passion
People are at the heart of an agile organisational culture. Senior leaders empower employees to take ownership of their work efforts, confident that they will drive the business towards its North Star.
Successful agile leaders act as visionaries, architects and coaches rather than planners, directors and controllers. They foster a high-trust environment where workers are involved in making decisions that will affect them and encouraged to take ownership of team goals, decisions and performance.
Agile foundation 5: Next-generation enabling technology
Agile organisations recognise that technology is critical to unlocking value and enabling quick responses to changing needs. With the digital revolution transforming the way people live, work and consume services, organisations must examine the technologies supporting their businesses to ensure they can effectively support a digitally enabled operating model.
When it comes to next-generation tech, organisations must consider both customer-facing and internal systems, tools and processes in the context of how they can more effectively enable the corporate vision.
Becoming agile is not a small or straightforward journey. It requires a real commitment to rethinking your organisation’s existing ways of working, and genuine cross-business buy-in to the transformation.
Examining your business’s alignment to the approaches outlined in this article is a helpful start point for organisations embarking on a move to agile. By strategically reviewing these aspects to assess your company’s current approach, desired state and any gaps, you’ll be well-placed to begin your agile transformation.