The word “agile” is much bandied around at the moment. It is a reference to the need for organisations to be more responsive and adaptive in the face of an accelerating pace of change. It is an exciting way to deliver products and services faster, whilst involving customer and staff in improvement cycles they genuinely enjoy. Yet in practice do we really know what an agile enterprise would look like? Furthermore, do we understand how to get there? This article will help fill in some of the gaps by describing the nature of organisational agility, and by sharing an approach to becoming a more adaptive enterprise.
To help explain what we mean by agile I would like you to imagine you have just joined Bank Soon as the CEO. Your customer satisfaction is somewhere in the middle of the pack (mildly negative in Nett Promoter Score terms), your revenue growth is pedestrian, your staff engagement scores are around about industry average, and there are 40 strategic projects in the pipeline, 50% of which are behind schedule. Not surprisingly market share is static, and there seems to be little you can do about it other than pull the price lever, because it takes you 120 days to release even simple product changes. Any material changes to product or service seem to have a 12 month plus timeline. Naturally, your technology infrastructure only makes this all harder for you.
To provide a point of contrast, you have just had lunch with an old colleague who has joined a middle sized specialist finance company focusing on the business market. She has astounded you by a serious of metrics which are almost jaw dropping. Her company can release a product change in 12 days (yes –days), the last major product release happened via something known as a Minimum Viable Product, which took 8 weeks to launch. That product needed later refinement but it captured market share before anyone could move, and cemented the company’s reputation as an exciting innovator. The staff just love to work there with engagement scores in the top 5% and the customer satisfaction ratings are comfortably top quartile. The cost-to-income ratio has been slowly dropping as innovation is applied to processes as well as products to keep costs flat whilst income grows. Internal process change is a given, and as the organisation has grown it has changed its structure twice in the last 3 years without missing a beat – effectively spinning off new divisions and they left the incubator of the mother ship.
Right now, it seems to you that you really need some of the attributes that your friend described about her more nimble organisation. You need a more agile enterprise meaning:
The daily practice of working cross-functionally, in a way that seems completely natural;
The ability to make product and process changes at a pace that gives a real advantage;
An effective set of policies to match authority to accountability, with few in any redundant signoffs;
Metrics that show what is really going on across a value stream, and which consciously encourage improvement;
Low levels of bureaucracy accompanied by a culture of accountability;
High levels of staff engagement accompanied by a feeling that they are making a real difference;
A willingness to use experiments to control risks, thereby giving change a go, whilst managing the risks;
Ultimately, the ability to respond quickly to a change in the environment, through product, service, process, system or structure.
So, where to start? Well the best approach seems to be working both bottom-up and top-down. This means understanding the organisational impediments to productivity by structured and sensible bottom-up analysis. This can be done in parallel with working on a set of Operating Model principles which the leadership can really buy into. What do I mean by Operating Model principles? Well a principle is a guide-rail to design and decision making.
For many in a moribund or bureaucratic enterprise this process of “agilification” can be one that is incredibly challenging. Some will embrace the change with enthusiasm, some will slog it out till they get there, and some will leave you in disgust that you would be so foolish to attempt such a journey. Yet, if you can deliver enhanced speed and flexibility then you will be so much better off in a world that only seems to get faster. The journey need not be revolutionary, but the aspirations must be bold if an organisation is to be as adaptive as modernity increasingly demands.