Business Agility can be defined as the capability of an organization to compete and be successful in the digital age by rapid response to changes and new opportunities with creative business solutions.
Some major industry trends that have become eye-openers to the business world on the need to have business agility to survive are
- Netflix taking over the market of streaming making Blockbuster go out of business
- Uber taking over the whole ride share industry from conventional taxi service
- Apple watches capturing market share from Swiss watches
- Tesla having a market capitalization that was more than all the Detroit motor companies
Transformation to truly agile businesses represents a real challenge to executives and their teams but also to the advisors that usually have a solution to offer in difficult times. Context is the source of that challenge
There are many ways to handle the business agility goals and there are many sources of knowledge like the SAFe framework and Business agility Institute etc.
Based on my experience with business agility efforts across multiple sectors like baking, insurance and telecom , sharing some fundamental aspects that needs to be considered for the success of any business agility initiatives as follows using the HOPE approach explained below that is applicable for any context and any organization. The approach is pretty much domain agnostic and process agnostic and focus more on the values of collaboration and self-awareness of enterprises.approach explained below that is applicable for any context and any organization. The approach is pretty much domain agnostic and process agnostic and focus more on the values of collaboration and self-awareness of enterprises.
HOPE => H- Holistic, O- Optimal, P- Purposeful, E- End-in-Mind Engagement
Let’s examine these in detail
The goal of business agility needs to be shared and understood holistically by all parts of the organization such as business, technology, compliance, legal, HR, finance etc. and this cannot be considered as technology activity as is the common thinking.
John Kotter, in his popular book “XLR8” calls out the primary challenges to Business agility and suggests solutions as follows.
Most organizations start small, and have a very holistic approach to everything they do as from CEO to team member all huddling daily to work on their product and when the organization grows in size over time, they become large corporations with hierarchical models that have lot more work to manage and end up with siloed functions like marketing, HR, legal, business, technology etc. that operate in a bureaucratic fashion. At this phase of the organization, along comes a nimble competitor with a disrupting business model and as the organization has lost the ability to be nimble anymore, they lose out market share and at times perish.
The solution suggested by Kotter is to consider a “dual operating system “and this means while you keep the hierarchical model, also develop a nimbler version that spans horizontally across these vertical structures like marketing, finance, technology etc. and has the skill set and vision to come up with innovative products quickly to the customer and sustain the business agility.
What is expected during this holistic involvement from all layers is a collaborative assessment of the organizational context on the following points
- The existing operating model (the CURRENT STATE) is understood and agreed by all
- The goal is to discover and design an appropriate future operating model (the FUTURE state).
- The organizational layers commit to address dysfunctions and its root causes.
- Recognize the need to upskill of current teams for discovery and design of an operating model.
- Goal of business agility is to deliver value early.
Once the organization is ready with answers to above points, we are ready for next step of going Optimal.
Optimize as much as possible to gain business agility as the lesser steps we take faster we reach our destination
- As the devil is in the details conduct Value Stream analysis on each product you want to launch and include not just the conventional product development cycle time that cover the idea to implementation and revenue but also the supporting activities like marketing campaigns, HR hiring timelines, Compliance process, Contract and Procurement timelines, so that you see the complete picture and see the delays in overall lead time to get your product in the hands of the customer. (This is one major mistake most organizations make in their value stream analysis when they focus only on the ideation and implementation steps as the overall Value Stream)
Example – consider latest iPhone that has mind-blowing features but the marketing campaigns were not aligned to the product development and beta /alpha launch! Or having the launch date announced and marketing in place but running into staffing challenges due to contracting and procurement not aligned to the overall product launch needs!
- Remember Conway’s Law
“Any organization that designs a system (defined broadly) will produce a design whose structure is a copy of the organization’s communication structure”.Make sure your organization avoid this trap and acts holistic and Standardize the processes across the verticals and optimize process efficiency, eliminating redundancy so that overall efforts are optimized across various divisions
- Leverage single source of truth concept to keep all artifacts and documentation visible and accessible organization wide. Most ALM tools like Jira, Confluence etc. support this with centralized dashboards and other BVIRs (big visual information radiators)
- Key is to think horizontally to advance flow of value across these vertical structures in the shortest time.
- Stay very focused on flow of value
- Recognize the organizational obesity and measure your BMI (Bureaucracy Mass Index) and to do so consider the following
- Bloat: too many managers, administrators, and management layers
- Friction: too much busywork that slows down decision making
- Insularity: too much time spent on internal issues
- Disempowerment:too many constraints on autonomy
- Risk Aversion: too many barriers to risk taking
- Inertia: too many impediments to proactive change
- Politics: too much energy devoted to gaining power and influence.
Take the following assessment to check your own organization’s BMI
Based on the above make changes to evolve into something leaner and more purposeful by re-skilling and re-purposing as needed along with decentralized decision making and championing the need for business agility
E- End-in-Mind Engagement
- Once you have the prior 3 steps of HOPE in place the last one is about engaging in an organization wide momentum to achieve the business agility goals.
- Lead the teams with authentic leadership that walk the talk.
- Establish a guiding coalition of leadership as a BACE (Business Agility Center of Excellence) to drive the business agility across the organization and this group need to have leaders from all vertical silos to ensure there is a horizontal flow of value (like Biz, Tech, HR, legal, Finance)
- Define the business agility vision and make it visible to all levels at the organization.
- Establish OKRs (Objectives and Key Results) for measuring the progress of Business Agility as these help in staying aligned holistically from top to bottom and also across all verticals.OKRs are great to connect leadership goals to granular executable work outcomes.
- Celebrate short term wins to keep the teams motivated
- Encourage a continuous learning culture that empowers the staff to be innovative and productive.
If you like this article and want to discuss more on this topic reach out to us and we are glad to help you out with implementing business agility in your organization.
About the Author: Ram Kollengode is an agile coach and transformational consultant with more than 30 years of experience across a variety of sectors like Banking, Insurance, Telcom etc. Ram is passionate about agile mindset and enjoys time mentoring and training leaders on embracing agility
References – https://hbr.org/2017/05/assessment-do-you-know-how-bureaucratic-your-organization-is