Organizational (fr)agility – 3 aspects to bear in mind
Organizational (or enterprise) agility has become a popular topic recently. Oddly enough, it seems that the main channel to communicate about the ambitious targets of becoming more agile, are the press releases about layoffs and major organizational restructurings. Also, organizations seem to rationalize almost any strategic target one could possibly imagine with agile. As a result, agility is linked with targets that have nothing to do with it.
There’s nothing wrong or bad in aiming for agile organization – quite the opposite. If an organization succeeds in scaling the agile philosophy across the whole organization, it’s very likely to be able to change direction and develop new products or services very smoothly.
Still, the way organizations communicate about the quest for agility makes you wonder, have they really understood organizational agility correctly?
- Company X begins new co-operation negotiations. X aims to renew its organization into more customer oriented, change its way of working into more agile, lower its organization hierarchy and improve efficiency.
- Company Y’s finance struggles – begins wide co-operation negotiations. “Our aim is to clarify decision-making, lower organizational hierarchy, add P/L responsibility and increase agility in the organization”, Y comments in their press release.
- Company Z aims to reduce 700 jobs and renew its strategy – “especially governance and internal coordination will be reduced. By simplifying our way of working, we’re aiming to increase our capabilities to respond more rapidly and in more agile way to customer needs”, says the CEO.
In addition to the press releases, corporate annual reports are common channel to highlight targets related to agility – often without any concrete achievements or actions.
- More agile and more international organization A — “In 2019, A will be more agile and international than ever. We are working with our customers to increase their assets with tailored solutions and digital services.”
- 2017 – the year of organic growth, M&A’s and regulation for organization B. — “We’re aiming to build organization B into truly Nordic, even more scalable and even more profitable company in which customer oriented approach, agility and team spirit are present in everything we do.”
Have they really understood organizational agility correctly?
All of the quotes above have been taken from real press releases and annual reports of listed companies at NASDAQ Helsinki.
The risk with unrealistic and irrelevant goals related to agility, is that the benefits are not reached and the ways of working become a mess; agile organization actually becomes fragile. To prevent agility to become a common joke or a buzzword that would solve everything, the following 3 aspects should be kept in mind.
1. Small is not automatically agile and big is not automatically stiff
Agility is very often linked with small organizations. Perhaps at least partly because companies mention agility so often in the same sentence with organizational changes – and therefore layoff’s. Still, being small does not equal being agile. Even small companies can be slow and hierarchical while big organizations can be agile.
Take the Scaled Agile Framework (SAFe) for example. It has been develop for the large organizations in the first place. One guiding principle in SAFe is that development organizations less than 50 people shouldn’t even bother using SAFe.
2. Agility does not guarantee customer oriented approach
In addition to agility, the customer oriented approach is veeeery often mentioned as target – especially when talking about organizational restructuring. But do you really have to be agile for being able to be customer oriented? Does agility turn your company into customer oriented? I doubt that.
For sure, the organization can improve its capabilities to build new products and services in an iterative way, and therefore demonstrate them for customers more rapidly. But being customer oriented takes a lot more – for example identifying weak signals, trends and market changes. And agility itself is not a solution for that. You still need to listen to your customer carefully.
3. Agile does not equal speed
The primary aim for agile development methods is neither to be able to deliver as fast nor as efficiently as possible. The primary target is to deliver maximal value to the customer. Obviously agile development has often increased organizational efficiency but that’s still not a good reason to go agile.
Agile organization actually becomes fragile
In a nutshell, the success of organizational agility depends on how well the development work (using agile methods) is linked to corporate strategic planning. The strategic targets give guidance for development while the deliverables and customer feedback give guidance for strategic planning. In addition, the development team independence is crucial for success to keep decision-making – and especially waiting time related to it – as short as possible.
From communications perspective it’s clear that there’s a lot of room for concrete success stories, learnings and experiences related to organizational agility. Technology is becoming THE business in growing amount of industries and therefore success stories – even small ones – without difficult jargon, would help companies differentiate from competitors – also in the eyes of the rare talents.
About the author
Juho Nevalainen is an expert in developing digital capabilities through strategies, operating models, digital concept design and digital transformation.
Juho works as a Senior Advisor at Sofigate.