Agility For Ambiguity – The Role of Empowerment and Democratisation
In this recent MIT article, Nick van der Meulen poses the following compelling question: What does it take for a large, established business to be as responsive to changing market conditions as the startups in its industry are??
The criticality (and ROI) of agility is increasingly evident when we consider how organisations must contend with and respond to the ambiguous nature of our VUCA-world. Agility at the individual, team and organisational level continues to come to the fore when we consider the critical competencies and skills for future-proofing.?
In Thrive Advisory’s Leadership Insights Research, we collected and analysed over 13,000 comments from 715 global leaders on key leadership topics. Agility, versatility and flexibility ranked as the 5th most important competency highlighted to respond to the key changes and challenges our clients were facing.?
In Thrive Advisory’s Covid-19 Leadership Research, we asked 505 global leaders to highlight the most important competencies, skills and capabilities they viewed as critical leadership requirements for the future. 48% of our clients and participants highlighted the same capability set as critical for leaders to embody.??
Thrive Advisory’s ongoing Future of Leadership research, incorporating more than 2 million diverse data points on leadership competencies and traits required for the future, also buttresses his assertions. Agility, versatility and flexibility emerged as one of the 12th most critical leadership competencies for the future. This featured in 26% of the sources we have gathered and analysed from a host of sources, including peer-reviewed journals, organisational leadership frameworks and the research and predictions of world-renowned academics, authors and futurists.??
When it comes to the ability to nimbly respond to new customer demands and competitive shifts, van der Meulen asserts that the answer often lies in a single word related to leadership: empowerment.??
Citing his research from a 2022 survey by the MIT Center for Information Systems Research (CISR) and organisational anecdotes, he proposes that large organisations can move as fast as startups if leaders empower their employees to act autonomously within well-defined constraints.? When employees and teams are empowered to make quick decisions, take risks, experiment, iterate and explore novel ideas, their autonomy allows them to seize opportunities and leverage shifts in technologies, competition, and customer requirements.??
He found that organisations that had cultivated an environment of team empowerment (with co-existing robust guardrails) outperformed their less-agile counterparts, enjoyed revenue growth that was 16.2 percentage points higher and net profit margins that were 9 percentage points higher. Looking to indicators of innovation, he found revenues from products and services introduced in the past three years were also 15.8 percentage points higher.??
Van der Meulen acknowledges that for large organisations, adopting these practices inherently becomes more challenging given the layers of decision-making, risk aversion, and the need for operational efficiency and strategic alignment across diverse divisions that co-exist with the scale and complexity of larger entities. With this, he recognises that while greater empowerment is core to driving organisational agility, it must co-exist with a level of coordination.?
In his article, he outlines an overview of each decision rights guardrail, citing clear examples from case studies at Mars, Allstate and Toyota.? He suggests that despite diverse industries and unique contexts and challenges, each has navigated the balancing act of empowerment and alignment, realising the key benefits of innovation and performance.??
1. Put purpose into action?
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Van der Meulen asserts that empowerment starts with clarity of purpose. Leaders must embed the organisation’s aspirations and values into every decision-making process. Allstate drives this by focusing its strategic planning around a well-defined purpose, ensuring that teams are motivated and guided by shared goals. Their Claims division shifted from rigid, project-based planning to a dynamic approach, enabling teams to be more responsive. Each year, they align their strategic objectives with their purpose and use customer personas to ground planning in real-world contexts. Teams are then empowered to create solutions in ways that best align with the company's vision, using open collaboration channels like standups and demos to maintain accountability and momentum. This approach ensures that everyone remains focused on the bigger picture while being adaptable.?
2. Democratise data?
Van der Meulen highlights how data, often siloed in large organisations, needs to be accessible across teams to encourage agile decision-making. Mars exemplifies this by empowering teams with structured data access, paired with extensive internal data science training. Mars's digital platforms allow employees to transform data into actionable insights through advanced tools, fostering a collaborative environment where data-driven decisions can happen in real-time. This democratisation ensures teams can act swiftly, while still adhering to data integrity, security, and compliance protocols. The result? Greater innovation, more informed decisions, and a streamlined path toward achieving business goals.?
3. Establish minimum viable policies?
Van der Meulen posits that overly rigid policies often stifle agility. Toyota Motor North America promotes agility by implementing "minimum viable policies," which serve as flexible, guiding principles rather than rigid rules. Teams are encouraged to comply or explain their deviations, fostering both autonomy and accountability. Further, Toyota Connected's UX design group streamlined their product development by creating modular design elements, which allowed teams to move faster while still maintaining a coherent user experience across platforms. This approach has been demonstrated to bolster alignment without constraining team creativity or speed.?
4. Provide the required resource?
Agile teams require timely access to resources—whether financial, talent, or technological. Van der Meulen outlines how traditional resource allocation, often slow and project-based, can impede innovation. Toyota Connected overcame this by using a venture capital-like approach to funding, allowing teams to unlock resources based on the maturity of their initiatives. Whether in the proof of concept, development, or operational stage, teams receive incremental funding as long as they demonstrate progress toward strategic goals. Allstate’s Claims division also illustrates this by dynamically prioritising resources weekly, to ensure teams have the capacity to deliver on critical outcomes.?
If you are convinced that empowerment, with the right constraints, enables faster decision-making, drives innovation, and leads to greater resilience in the face of market shifts, how might you consider adopting these four guardrails—aligning purpose, democratising data, simplifying policies, and adapting resources—within your organisation to achieve the agility needed to stay competitive???