Building Agile Organizations

You have to be very nimble and very open-minded. Your success is going to be very dependent on how you adapt. -Jeremy Stoppelman

Sam sat facing his laptop with an email from a client who needed quick action. The client’s request was simple and could be completed within no time, but Sam’s hands were tied, knowing the solution, he could not take any action because he had to wait for approval from his manager and the manager from the vice president, and the vice president from the chief executive office.

The product launch date was quickly arriving and the team was still struggling with beta testing. The beta testing revealed that the product's main interface was very confusing and unintuitive. The development team faced a humongous task before them and the hierarchical structure of the organization slowed down the decision-making process. Ultimately, the CEO had to step in and give freedom to the development team to make decisions and launch the product.

What you read above are stories that exist in most organizations. These stories are not about large organizations, they exist in organizations of every size. If only Sam could make a decision, the resolutions would have been faster and customer satisfaction higher. If only the development team could make independent decisions, the product launch could have been faster.

Organizations come into existence primarily to serve customers' unfulfilled needs. However, the purpose gets defeated by the systems, structures, and culture of the organization. The dynamic nature of the business environment adds fuel to further decelerate the organization's growth.

An important question every organization needs to ask in the BANI (brittle, anxious, non-linear, and incomprehensible) world is, “How can we build systems, structures, and culture to accelerate organizational growth”?

Thriving in the BANI world requires organizations to become “AGILE” in their approach to conducting business. Agility is an integral part of organizational culture, and it needs to be visible in every possible system and structure. Going back to our story above, if only the organization structure was fluid enough for all frontline employees to make a decision, the amount of accountability they would demonstrate would be far higher than receiving instructions from someone above in the hierarchy. A pertinent question is, “Which hierarchy is better top-down or bottom-up”? the answer is neither, a flat hierarchy that is driven by accountability delivers better results. The first step in becoming agile is to demolish a hierarchical structure and develop a truly flat structure.

The second step is creating systems and culture that support building an agile organization.

1. Customer centricity – As discussed earlier, every business exists to fulfill customers' needs. An agile organization builds policies that empower its employees to make quick decisions by removing the fear of failure. As Amy C Edmondson quotes in her book “The Fearless Organization” – “Our distorted, unrealistic expectations for avoiding all failures are indeed the culprit. But for jobs where learning or collaboration is required for success, fear is not an effective motivator”. By removing fear as a component of punishment or motivation, organizations can build agile and customer-focused teams.
2. Collaboration – The book “Principles of Scientific Management” by Fredrick W Taylor emphasizes the importance of individual contribution in the workplace and treats humans as just interchangeable parts of a machine, which surprisingly many organizations with traditional ways of doing business still consider as a method to achieve efficiency. However, humans unlike machines need human-to-human interaction. Another important factor in bringing agility is to creation of a collaborative work environment. As Amy C Edmondson quotes in her book “Teaming” – Collaboration: Teaming requires a collaborative mindset and behaviors—both within and outside a given unit of teaming—to drive the process. Organizations can become agile by creating tasks that promote collaborative efforts.
3. Stretch Learning – The words “Continuous Learning” are ubiquitous during conversations about organizational growth, however, it does not guarantee that the learning will yield any substantial growth since the pace of learning may or may not be in sync with the speed at which the industry is growing. What is needed is “Stretch Learning”: Learning at a pace that is faster than the direction in which the industry is growing is the only way to be a the top of the learning curve. As Scott H Young quotes in his book Ulralearning – (Paraphrased) “Ultralearning is a self-directed, intensive approach to acquiring complex skills and knowledge in a shorter timeframe. It's about strategically planning your learning journey and using effective techniques to maximize your progress.
4. Transparency – Have you ever felt shocked by the information that is being disseminated from the corner office? The current generation of workers feel more connected to organizations that practice open communication, where leaders share new information openly and regularly, and are accessible to answer questions. Organizations that are transparent in their communication are likely to have employees who are aligned with the organization's vision.
5. Adaptability – Lou Gerstner's book "Who Says Elephants Can't Dance?" quotes – “The last thing IBM needs right now is a vision. What IBM needs is leadership, a new direction, and a new way of working”. The vision is a moving target, no organization can thrive with a fixed vision. There are umpteen examples of how industry giants fell because of their lack of vision and arrogance. Agility and Adaptability go hand in hand, an organizations that don’t act on the changing business environment will perish.

We are living in a knowledge economy, by the time you read this article, it is likely that the available knowledge will have doubled. The factors that impact the agility of an organization may differ based on the industry it operates. As quoted by the 500 BC philosopher Heraclitus “Change is the only constant”. Rephrasing the quote “Agile change is the only constant”. Irrespective of the industry you operate, change is important, however, the speed of change in the right direction is more important.