It has been said that change is the only constant, and these days companies have to be more agile than ever to keep up with changes in the marketplace, changes in technology and changes in stakeholder needs.
With up to 70% of all organisational change efforts failing, it is the ability to navigate the increasing pace of change that ultimately separates successful companies from unsuccessful companies.
Organisations in the previous century tended to be hierarchical and specialised, what Gareth Morgan described as “machine” organisations. Optimised through labour productivity and scientific management practises, these organisations embraced a top-down management approach.
As the pace of change has increased, this type of organisation has often proven to be rigid, and resistant to change. This is reflected in the fact that only 10% of the non-financial S&P 500 companies in 1983 remained in the S&P 500 in 2013.
Clearly, in the twenty-first century, a new type of organisation is required, one that is more agile, more flexible and more able to change itself in response to a rapidly changing environment. This organisation tends to have the characteristics of an organism.
As can be seen, in the organisation as organism, each component of the organisation is empowered to make decisions, and accountable to the other components for its decisions. This is true whether considering at a departmental level, team level or between colleagues.
So, what are the characteristics of an agile organisation? According to McKinsey, there are five trademarks of agile organisations across five different layers of the organisation.
At the Strategic layer, there is a “North Star” strategy – a shared vision and purpose across the entire organisation. It is characterised by flexible resource allocation and actionable strategic guidance.
The Structure of the agile organisation consists of a network of empowered teams. The typical hierarchy here is a clear, flat structure with clear, accountable roles within active partnerships and ecosystem. These teams have to be supported by an open physical (or virtual) environment.
The next trademark occurs within the Process layer – Rapid decision and learning cycles. These processes are rapid, experimentative and iterative. Matched with an attitude of continuous learning, the organisation is able to quickly trial new methods, building on those that show promising returns and adjusting course when necessary.
Of course, that is not possible without a People layer consisting of a dynamic people model that ignites passion. This requires a cohesive community with shared and servant leadership, individuals with entrepreneurial drive, and able to adapt to changing roles.
The fifth and final layer is the Technological layer. Agile organisations require next generation, enabling technology with an evolving architecture, able not just to support but to provide the agility that all the other layers depend on.
At Factor10 we are obsessed with managing change and creating more agile companies. We have a panel of experienced and internationally accredited psychologists, leadership experts and coaches who deliver bespoke, experiential leadership immersions and deep coaching dialogues that will assist in making your organisation better able to respond to a changing environment.
