All organizations aim to get a competitive advantage to grow in their own space. Three things can help you achieve this including recognizing the unexpected by continually scanning the environment for potential threats, responding swiftly and efficiently which also means faster than the competition and as an organization goes through transformations it has to reconfigure internal resources to fit these transformations. All this can be brought about by organizational agility.
A living example of failed organizational agility is Kodak in comparison to Fuji Films that made the right transformations. To understand where you are currently and what kind of transformations you need to bring about, you have to scan the environment continuously. Ram Charan in his book The Attackers Advantage calls this Perceptual Acuity, the ability to look around corners to identify inconsistencies and respond accordingly.
Agility is high around capability built around good management and differentiation. As per The Agility Pyramid:
Good Management: Strategy, budget, resource allocation, etc. Well managed companies follow good practices and try and compete with the best. But the challenge they face is they end up being marginal performers because they don’t have competitive differentiation. So good management ensures company survival but does not guarantee a competitive advantage.
Differentiated: Companies with different capabilities like to be different from their competition in terms of lower cost, high-quality or even something like customer experience. These companies have high profitability, and they aim to be faster, better or cheaper than the competition to sustain the advantage.
Agile: At the top of the pyramid are Agile companies that know, competitive advantage is only temporary, so they try and ensure agility. An organization can do things differently which ensures that whenever required can set them apart from the competition. This also includes the ability to make quick, effective and sustain changes, so this is not a static process.
Agility is not something to be looked at once a year but should be an ongoing process. All these three can help an organization sustain performance and competitive advantage over time. This can be put into action by building a learning organization. Chris Argyris speaks about the double loop learning; once you learn something, you have to feed it back in the organization. Unfortunately, this isn’t possible in organizations. When the agile way of working was introduced compared to the waterfall model, it’s more suited, and the core challenge of double loop learning can be broken if an agile model is created.
To put this in place, we use the framework offered by the book Agility Factor. Here are the four stages:
Strategizing: There are two aspects to this, an identity of the organization and intent. When we talk about learning and strategizing intent it is essential to give employees a completely clear picture of the organizational identity. The intent needs to be aligned with the identity of the organization.
Perceiving: While the strategy stage is inward focused, perceiving is all about understanding environmental signals around you. Agile companies do this by having groups across organizations to keep a tab on the competition, market, etc. So a check is kept not just on the product but external factors as well.
Testing: The emphasis here is on having slack resources in the company. Everyone is focussed on making plans lean, budgets, etc but it’s essential to have additional resources that allow people to go out test projects and learn from the failures.
Implementing: Once you have prototypes and samples, you decide how to translate all that to action and how do you put it on people’s goals. Evaluation, encouragement and building change capability are all part of this stage.
These are the most significant aspects which are the day to day processes and actionables that make your organization agile. Out of these four, implementing is the single most direct indicator of agility and the toughest stage. Based on the following stages, you can pick where is your organization currently and fuel organizational agility accordingly.
(The article is based on a masterclass by Maria Christine, Director-Talent development, Fidelity Investments and Vivek Subramanian, Director, Leadership Development, Fidelity on Fueling organizational agility- the role of learning from People Matters L&D Conference 2018)