Why should business agility matter to your organisation?
Most businesses have a strategy, a plan, a P&L and governance processes in place. All good? Well maybe. The way corporates have worked for the past century has been largely one of inside out thinking, of set plans and budgets, of a top down hierarchy and annual development plans. Increasingly business agility is seen as a desirable response when faced with continuous and significant changes in customer behaviour and expectations as well as the need to flex and change direction in response to a Volatile, Uncertain, Complex and Ambiguous (VUCA) environment.
We must stress here that we are not talking about software development or tech teams using Scrum or Kanban. We’re talking about business agility and joining the dots across the organisation from process and behaviours, to structure, relationships and leadership. It has much broader cultural implications for leading and operating a business. This type of agility comes from being good at change and the process of change throughout the organisation.
Even before the current pandemic, organisations were increasingly exploring agility in both operational and strategic contexts, to improve performance and to generate new products and services. Tech teams already demonstrate the flexibility of working in this way and the value of delivering in shorter development cycles. Rolling out the principles beyond tech has advantages in customer centricity, productivity and employee engagement. Organisations are applying agile ways of working in relation to operations, strategy, and technology, as well as functions such as supply-chain, marketing and HR.
In the last 6 months, some companies have seen significant benefits from being forced to put their annual development plans aside and respond very quickly to social, economic and political change. They have demonstrated significant business agility.
So let’s stop a minute and look at the world around us. Let’s pose some fundamental questions to explore why business agility matters.
1. Is your business truly oriented around the customer?
“There is only one valid purpose of a corporation: to create a customer.”
Peter Drucker, 1954
The internet has truly put the customer at the centre of the commercial world. Customers now have more choice than ever before, access to more information and far greater interaction with peers.
The customer focus of organisations like Amazon, Google, Zappos, Airbnb, Netflix and Spotify has led to them being some of the fastest growing, most successful businesses in the world. They drive customer expectations around greater choice of products and delivery options, faster and faster access, curated information, better customer service and more relevant messaging than ever before. Their customers are likely your customers and they expect more from you too – whether you’re in banking, insurance, legal, travel, retail or frankly any sector.
Amazon’s decisions consider things from the customer perspective. They developed an approach to ‘work backwards’ – the PR FAQ process. The future press release and supporting FAQs are written as part of the internal approval process for a new initiative and a reminder to consider the voice of the customer is famously represented in meetings by the presence of an empty chair.
It might be worth considering if your organisation could make customer feedback available to everyone. Reviewing these insights together builds a shared understanding of what matters. How a product or service will solve a customer problem can be demonstrated up front with “mock ups” to encourage new perspectives. Finding these sorts of ways to focus on outcomes rather than task and on the customer problem rather than what suits the business can bring a step change, with minimal investment.
A recent survey on ‘The Future of Retail’ conducted by Braze, with 8,000 respondents, indicates that consumers are purchasing products from brands that best align with their values. For example they need options that empathise with their current mindset:
· 78% UK shoppers are still not comfortable with shopping in bricks and mortar locations
· 29% say they will shop online more than before the lockdown, accelerating the switch to online purchasing
“With brands and retailers continuing to navigate uncharted waters, it’s essential they prioritise customer engagement. Those that listen to their customers and put personalisation, empathy and convenience at the heart of their customer engagement strategy will emerge as winners.”
James Manderson, GM & VP Success EMEA Braze.
Customer behaviour, needs and wants have changed more in the last 6 months than perhaps the last 6 years. Where organisations are customer centric and great at delivering change, this has brought opportunity, for those with constant barriers and resistance to change, the desire to keep up is exhausting and not sustainable. There is a real bottom line benefit to the whole organisation being connected to the customer.
2. Is your business prepared to manage the current uncertainty as well as the next curve ball?
We need to consider setting ourselves up differently to be confident we’re focusing on the right things as we navigate an era of rapid changes in competition, customer behaviour, technology, and regulation. It’s difficult to see the merit of multi-year transformation plans (and all their governance), with delivery milestones stretching ahead to measure progress against solutions that are right for now, but may be irrelevant in the months ahead.
Organisations need to build capability and capacity to respond and adapt quickly, to place smaller bets on smaller pieces of work, search out good feedback and move on when changes don’t hit the mark. Better to find out sooner rather than later if there’s an issue, appreciate the learnings and inform the next choice.
Ericsson, (a 140-year old Swedish firm with around 100,000 employees), manages networks covering 40% of the world’s mobile phone traffic. Their journey to agility started in 2011 and moved them from 5 year to three-week cycles, with 100+ small teams working on customers’ needs. Most importantly, faster development means time is focused on specific, relevant and up to date customer needs and customers get value sooner. Overall there is less noise around the development agenda and delivery (and revenue) is an amazing one to two years earlier than before.
Hendrik Esser, from Ericsson’s transformation programme says,
“Previous attempts were driven by sub-organisations working on their part of the process, resulting in a lot of activity but little outcome. We understood that real improvement can only be achieved by working across the entire organisation.”
Ericsson implemented cross-functional teams, aligned to group and organisational goals. They moved away from traditional steering meetings to high-frequency cross-functional team meetings, resolving issues more dynamically.
Esser says that a crucial shift in implementing agility was a new attitude to change.
“Previously, we had heavy and slow change management procedures, handling hundreds of change requests as each project launched. Now we handle changes ad hoc by collaborating and sorting them out. Change has moved from being fought to becoming everyday business.”
Doing change well increases the productivity of your organisation and clears the way for continuous delivery and innovation. Being aware of what lets you down now is a good start. Beyond traditional process improvement, you can take an honest, un-biased look at organisational barriers; there are likely to be challenges with structure, culture and even leadership alignment. We’ve all heard of and been involved in reducing technical debt for years, but we face a mountain of organisational debt if we are really seeking an efficient organisation that can cope and even thrive off increased levels of change.
3. Is your business an engaging place to work?
Employees who enjoy the work they do, and feel aligned to the purpose of their organisation, leaders and peers, will be more loyal, productive, innovative and positive. However, those who are disengaged, are often rigid in their ways of working and thinking and crucially they resist change. Change can be exhausting and the continuous change required for organisations to stay relevant and competitive puts even more pressure on individuals who struggle with ambiguity and threats to their steady environment. Giving individuals clarity on business vision and purpose, with support to work flexibly and take decisions autonomously encourages creativity and builds engagement.
Gallup research reports that organisations with engaged staff compare favourably with others on metrics that heavily impact the P&L.
· 17% higher productivity
· 21% higher profitability
· 41% lower absenteeism
· 40% fewer quality incidents (defects)
Prioritising engagement is as important as investment, product and market strategies and forging ahead with a business agility agenda brings multiple opportunities for engaging people. They can be involved in the creation of your particular “flavour” of agility, with a focus on what matters in the context of your organisation. Giving people a voice, seeking frequent feedback and prioritising their involvement in continuous improvement are all options that drive engagement with an agile approach. Even moving away from the annual development plan to one focused on smaller chunks of work can bring people closer to the purpose of the organisation and the customer. Surely these are win-win?
Perhaps some insight could be gleaned from to where your organisation is now through three useful statements (thanks to Sicora Consulting) to determine if individuals are feeling personally engaged by the principles of agility:
· I feel encouraged to find new and better ways of doing things
· My team adapts quickly to change
· My organisation creates new and challenging work assignments
Conclusions so far…
Business agility is about being able to quickly adapt to the world. It minimises bureaucracy and speeds up decision making and delivery. People are empowered to drive the business forward in cross-functional teams with shared focus on solving customer problems. Agility and its benefits don’t come from reinventing the wheel, initially you just need to look at the organisation through a different lens. There is a choice to make and it might be as simple as
get better at sensing and responding to change or fall behind the competition who’ve made continual change integral to their business as usual
An agile approach is not right for every situation, nor does it offer a perfectly formed solution. However, it is increasingly recognised that agility is a better fit with on-going social, political and economic changes, the pace of which is only likely to increase through 2020 and beyond.
About the Authors
This article was written in a collaboration between two people with a shared passion for business agility to drive innovation and positive continuous change.
Linzi Parry is passionate about creating an environment and culture where change can succeed. Building change capability and belief in an organisation are often key measures of her success. She’s passionate about keeping up with the latest findings around change, transformation and organisational agility then applying her straight-forward approach to delivery in any industry sector. linkedin.com/in/linziparry
Jacqui Rigby (PhD) brings together teams across businesses to drive strategic change, establish agile teams and develop innovative digital products driven by solving customer problems. She has worked in sectors as broad as legal, retail, financial services, travel, pharmaceuticals and funeral planning. She can be found at linkedin.com/in/jacquirigby