7 Core Tenets of Organizational Agility
Equipping organizations to respond to change
Business agility. Organizational agility. Lean enterprise. Whatever you call it, many organizations are currently undergoing transformations to change their ways of working so they can thrive in disruption, be responsive to change, and deliver value to customers at the speed they demand. The need for this has been made abundantly clear by the disruption and subsequent pivots of the pandemic. While COVID-19 accentuated the need, almost all corporations have been facing mounting pressure to evolve and speed up to compete in the 21st century.
Given this mounting pressure, what does organizational agility look like and how does an organization evolve? Depending on if you are an executive, a team in IT, a marketing manager, or an HR Business Partner, it may look different for you. It will also look different depending upon the size of your organization and the industry you are in.
Let’s level-set on what is universal by sharing the seven core tenets embodied by a modern, agile organization.
1. Outcome over Output
Outcomes are what you want to achieve. Outputs are the actions and items that could potentially contribute to achieving an outcome. The goal of a team or organization is not to focus on discrete outputs; it is to drive toward a defined outcome. All too often organizations align targets and measures against outputs and lose sight of whether they’re actually achieving the intended result.
What does this mean for a team? Well, instead of focusing on whether a project is on track, focus on whether what you are producing is wanted and needed by the customer. For instance, instead of measuring success based on whether a project was delivered on time, measure success based on adoption, customer net promoter score (NPS), or feedback from focus groups. This may require the team and organizational structures such as project governance to let go of an old way of doing things in order to adopt something new to achieve the better outcome.
2. Growth Mindset
A growth mindset is the belief that a person, team, and/or organization can improve over time. Characteristics of a growth mindset include a belief that failure offers an opportunity for growth, an openness to feedback, an eagerness to take on new challenges, and a desire to continually learn.
For an individual, this means having a passion for learning rather than a hunger for approval. For a team, it means seeking feedback from each other and stakeholders to continually learn and improve. As a leader, it means demonstrating to your team where you have tried and learned and celebrating the learning.
It’s important to note that humans are endowed with a blend of growth and fixed mindsets. When we feel challenged, it’s natural to have an initial defensive reaction. As an individual, understand what triggers you and inhibits your growth. In an organization, strive to build a culture that encourages collaboration and information sharing and while making it safe to take accountability and seek feedback.
To understand if your organization is building the right culture, a great first step is to evaluate organizational processes, such as performance management processes, talent development, and rewards mechanisms. Is performance management used as a development tool? Is your talent development program looking at ways for people to grow and stretch while also encouraging lateral movement? Do your recognition and rewards programs incorporate cultural behaviors such as teamwork, living your values, and continuous learning?
3. Systems Thinking
Systems thinking requires understanding that a complex ecosystem like an organization has many parts that interact and interrelate. This expands the choices available for solving a problem by broadening our thinking and helping us articulate problems in new and different ways. At the same time, the principles of systems thinking make us aware that there are no perfect solutions; the choices we make will have an impact on other parts of the system. This means as we make adjustments and changes, given that we are in a complex system with interconnected issues, we must continually monitor and probe for the impact of our actions.
One way to incorporate systems thinking is to gain a better understanding of all the interconnections and players within a value stream by mapping handoffs and touchpoints between everyone involved. In addition, to understand the impacts and results of choices, it is important to have feedback loops. For a team this means getting feedback from other team members through retrospectives, and from stakeholders and customers through metrics, surveys and focus groups. Another way to incorporate systems thinking is by considering the causality of events. This can be done by using root cause analysis tools such as fishbone diagrams and the five whys.
4. Customer Obsessed
By putting your customers at the heart of everything your business does, you not only deliver better outcomes but also build long-term relationships. Doing this as a team means using a human-centered or design thinking approach to innovation. This is anchored in understanding customers’ needs through persona identification and journey mapping, and then generating creative ideas to address their pain points to create better value.
Maintaining a focus on the customer throughout the lifecycle of your service or product means continually collecting, monitoring, and understanding the voice of the customer. It also requires a change in how and where organizations make decisions. By recognizing that the people who have direct contact with your customers on a daily basis are closest to their successes and their failures, you acknowledge those closest to the customer should be empowered to make decisions about what is right for the customer.
5. Respect for Others
Lack of mutual respect leads to lack of psychological safety at work. This has major repercussions. If individuals do not feel comfortable speaking up about what is not working, you will never be able to identify mistakes, learn from them, and improve as an organization. To create a psychologically safe environment and demonstrate mutual respect, leaders and team members must start from a place of positive intent and assume others are as well. You must recognize your own cognitive biases, since subtle biases can creep in and influence the way we see and think about the world. Biases can cause us to ignore others’ opinions or jump to conclusions about intent.
Everyone on a team must actively work to create an inclusive environment. To build an inclusive environment on your team, promote discussion and debate. As an individual, ask open-ended questions and listen to understand others. As a leader, model the behavior you want to see in your team by being vulnerable — share your failures and your own opportunities to learn and grow.
6. Relentless Improvement
A focus on reducing waste and continually improving your product and processes produces an overall better experience for your customer as well as reducing effort and overhead in your operations. Organizations can do this by looking at the total cycle time of delivery through all teams involved in the entire customer value stream. Everything that hinders the flow of value should be critically examined. Making sure you continually monitor and strive to improve key areas (such as batch size, lead time, cycle time) will ensure you are delivering value to the customer more frequently. In addition to improving throughout, organizations should also strive to adapt quickly to changes in customer demands and market conditions. That means you may need to evaluate some of your business processes to be more adaptive—such as planning, budget, and forecasting processes, as well as talent management capabilities.
7. Power of Focus
The benefit of focusing on just a few things at a time can be seen at the individual, team, and enterprise levels. As an individual, multitasking and task switching can have detrimental effects on productivity. When we jump from task to task, we are forcing our brains to constantly switch gears, working harder to do things at a lower level of quality and exhausting our mental reserves. Therefore, limit the number of items or projects you are working on. In other words, stop starting and start finishing.
When it comes to teams, we find that teams where individuals are dedicated to a single project or product are the most effective. If more than half the people on the project are spending more than half of their time on other projects, the results will come much slower and with lower quality. Dedicated teams have increased immersion into the project, giving additional focus, which in turn generates much more diverse and inventive insights into the possible solutions. They are also able to work together on a small set of tasks as a unit and increase the amount of work they are able to accomplish.
For an enterprise, there is a cost of trying too much and not focusing on a few key areas. If your leadership team is looking at hundreds of metrics and KPIs, how do they know if they are doing well and how do they know what decisions to make? There are trade-offs to every action and having a clear vision and objectives gives leaders a sense of direction for making decisions. It also allows the organization to focus on measuring what truly matters and adjust tactics when needed.
Implementing Organizational Agility
The tenets of agility play out across the organization — at the leadership, team level, and individual levels. Organizational agility has implications for your enterprise’s operating model, whether it be the culture, strategy, ways of working, governance, or organizational structure. Successful implementation in your organization starts with first embracing these key tenets at all levels of the organization. Identifying how they differ for each level is a critical success factor. To further roll out concepts and ways of working, you will need to assess where you are now and develop a transformation plan to move you in a concerted, focused way.
Want to learn more?
To understand how you might incorporate organization agility concepts and practices into your organization, reach out to Slalom Orange County Business Advisory Services at slalomocbas@slalom.com — or visit slalom.com.
Slalom is a modern consulting firm focused on strategy, technology and business transformation. Learn more and reach out today.
