Five Steps to Business Agility
Eric Jansen, NextParadigm
“Things just take forever around here” said Christine Fuller, CEO of Global Financial Services. “The competition is bringing out new products every month, but it takes us six months just to get a prototype developed. What’s going on? How come it takes us six times as long, sometimes even more, just to catch up?”
Does this scenario sound familiar to you? Do you hear similar narratives in the organization you work for?
The Holy Grail that people are searching for is often described as Business Agility, the “agile business”.
Business Agility is one of those management approaches that is conceptually easy to understand, but also one that most organisations find difficult to embrace and implement.
In my experience consulting to companies that are struggling with the Business Agility challenge, the common problem has not been a willingness to embrace agility, but rather how to actually achieve it.
Organisational inertia is powerful (and the larger the organization, the more difficult the change journey can be). But leadership resolve and a willingness to embrace profound change can bring immediate benefits to both customer/employee engagement AND the bottom line.
At NextParadigm, we have identified five steps that, when implemented together, can help organisations achieve true Business Agility in a relatively short space of time.
1. ONE-PAGE BUSINESS CASE — MAX!
One of the biggest impediments to agility these days is the long, laborious business case process that many organisations impose upon their managers.
It may seem bizarre, but I have worked with several organisations where the cost of preparing, submitting and seeking approval for a business case EXCEEDED the capital amount requested!
Today’s dynamic marketplace requires quick decision-making and fast implementation of new ideas. The one-page business case ensures the requestor keeps the submission succinct and to the point, making it much easier for the investment committee to make a quick decision.
Usually, when I suggest this approach, I’m told one of two things:
“This is a big thing we’re doing here — I can’t just summarise it all on one page.”
“I can’t just ask for an $x million investment with a one-pager.”
Which brings me to the second step…
2. CHUNK IT DOWN
You are probably familiar with the expression “Let’s not try to boil the ocean here”, implying that we are trying to do too much all at once. And yet this is often what organisations attempt to do, in the false belief that doing it all in one “big bang” is better, cheaper and more likely to succeed.
Experience shows that the exact opposite is the case.
By breaking large initiatives into smaller, more manageable pieces, we get numerous benefits:
We only commit (risk) a small amount of capital at a time We make it easier for people to make investment decisions (see (1) above) Each piece that is ‘finished’ provides us with valuable feedback that we can use to create a better overall solution with the funds remaining We give ourselves the opportunity to go in a different direction (pivot), as the market or opportunity landscape changes.
3. BRING THE TEAM TOGETHER
So once you’ve got manageable scope and funding, what else can you do to promote agility?
Bring the team together!
Once the project is underway, the two biggest impediments to agility are hand-offs and rework.
Handoffs occur when the people doing the work are not in the same team (either organisationally and/or physically). Either way, this separation results in a phenomenon known as ‘hand-offs’.
Hand-offs lead to people optimising their own parts of the puzzle, rather than the whole, and increases the potential for misunderstandings and errors (as in the game of Chinese Whispers).
Rework happens when we make mistakes. We recognise that no-one is perfect and we all make mistakes, but there are things we can do to minimise rework, including reducing hand-offs, improving communication and collaboration, and reducing batch sizes (so we can pick up errors and correct them as early as possible).
Teams that are co-located and collaborative effectively remove all hand-offs in the process. Miscommunication is dramatically reduced, through direct, timely conversations, shared purpose and mutual understanding. These teams also minimise the need for rework, as the mistake is quickly spotted and corrected in real time, and repetition of the mistake is avoided.
4. ASK WHAT’S NEEDED (AND WHAT’S NOT!). REPEAT.
The fourth step towards Business Agility is to continually question the value in the work we are doing. Not in a cynical way, but rather to ask ourselves:
What value does this work create? Is there a better way we could do this that would save time or money, or avoid costly rework? Are there any steps in the process that have no value (or worse, create waste)?
By focusing on the value, we allow ourselves to identify and remove unnecessary process steps (waste), minimise the potential for mistakes (and hence rework) and improve the satisfaction we obtain from our work.
Most importantly, we create a mindset of creative innovation that is a necessary foundation for the agile organisation.
5. PUT THE CUSTOMER AT THE CENTRE OF YOUR THINKING
The final step is actually the most important, but I have purposefully placed this last, as it can be the hardest step to truly embrace.
Many organisations blithely state that “the customer is the centre of everything we do” — but are they really?
Placing the customer at the centre of our thinking requires a culture that is strongly aligned to the voice of the customer. This includes:
- giving employees more freedom to “do the right thing” for the customer
- using customer feedback to continuously improve products and services
- placing customer satisfaction above such metrics as shareholder value (in the knowledge that happy customers are the key driver of financial success)
Companies at the vanguard in this area even bring customers into their planning and development process, replacing assumptions about customer preferences and behaviour with “the real thing”.
It is true that the five steps described above can be difficult to introduce in any organisation of size. Those that do embark upon the journey, however, usually reap substantial rewards, including better competitive capability, shorter lead times for new products and services, and significantly improved customer and employee engagement.
Are you ready to take the plunge?