Home Management Performance Management for Agile Organizations: Overthrowing The Eight Management Myths That Hold Businesses Back
The Characteristics of Agility
Customers want constant improvement in the products they purchase. Many retailers strive for outstanding service and attractive store designs, but few go to Apple’s lengths in incessantly improving every detail.
Take store design, for example. According to Brian Dyches, president of industry group, Retail Design Institute, “most retailers take a prototype and roll it out. ” Apple by contrast “constantly evolves its stores’ look and feel. ” Apple stores, for example, have removed that ubiquitous, but irritating feature of retail stores—the cash register. Sales people complete their transactions on mobile devices.
Instead of starting with what Apple has to sell, the sales staff start from where the customer is, and what the customer’s problem might be. Apple operationalizes its “steps of service” in the simple acronym APPLE:
Approach customers with a personalized warm welcome;
Probe politely to understand all the customer’s needs;
A successful business of the twentieth century was characterized as stable, predictable, and conforming. The polar opposite is true now. A high-performing business of the twenty-first century is constantly able to remain in a state of instability, changeability, and non-conformity.
© The Author(s) 2017 21
T. Baker, Performance Management for Agile Organizations,
Present a solution for the customer to take home today;
Listen for and resolve any issues or concerns; and
End with a fond farewell and an invitation to return}
Now that we’ve considered the evolving methods of evaluating organizational performance, in this chapter, I want to describe the standout characteristics of the agile enterprise. Agility is doubtlessly the current criteria for performance success. So it’s essential to understand the characteristics of an agile enterprise in action. We’ll then turn our attention to the seven dimensions of agility in Chap. 3. But without a clear definition of its conditions, the agile enterprise is a vague idea, open to all sorts of interpretations and misunderstandings.
Chapter 3—the final chapter in Part I—identifies the dimensions used to evaluate agile performance. While there are cross-overs between the characteristics of the agility and how it should be evaluated, there’s a fundamental difference between the two concepts. So in this chapter, I define the characteristics of agility before exploring the ways it can be evaluated, in the next chapter.
Being agile is no longer an option for a business, if it wants to remain successful. The relentless and rapidly transforming marketplace means a business must have the capability to be maneuverable and responsive to retain and grow their market share. Surviving in a tumultuous economy is one test, but staying one step ahead of the competition is another. But these two challenges have one common thread: the need for agile performance. To use a metaphor: Surfing the fast and unpredictable waves of a volatile ocean involves courage, resourcefulness, adaptability, responsiveness, and speed. Surviving and thriving—as I pointed out in Chap. 1—is about ambidexterity; that is, the business must value both consolidation and stability and apply them in the right places and at the right time.
Although seemingly strange bed fellows, both sets of values must coexist in a seamless and harmonious way under the same roof. While being skilled at using both hands adeptly, performance is more dependent than ever on agile thinking and behavior. What’s more, reaching and sustaining high performance is reliant on exercising several dimensions of agility. Agility isn’t a technique, a fad, or a process; it’s not so much what organizations do, it’s more how its members think about what they do.
Agility has to permeate the culture of a business, including its teams and individuals, and the way business gets done.
A successful business of the twentieth century was characterized as stable, predictable, and conforming. The polar opposite is true now. A high-performing business of the twenty-first century is constantly able to remain in a state of instability, changeability, and non-conformity. In the current marketplace, everything has to be accomplished faster, with greater flexibility, almost instantaneously. So it is unsurprising that there is a burgeoning interest in agile performance in business.
The globalization of the marketplace has lessened or removed boundaries between countries, markets, technology, stakeholders, and customers. The world is becoming more and more interconnected, smaller—yet more complex. Everything done in an enterprise can be outsourced. Partnerships and alliances in the business world are forming that were considered unthinkable a decade ago. Having a competitive edge is a temporary state. Global rivalry for market share is intensifying. Customers are more demanding; they’ve got more choices and a bewildering array of options at the click of a button. Above all, customers want low prices, high quality, and warp speed delivery. It’s a tough, uncompromising environment to do business in.
Beyond these competitive pressures, the speed of technological advancement and the uncertainty this raises, means managers need a crystal ball instead of a strategic plan. This explosion in technological innovation appears never ending. The knowledge explosions are getting louder, bigger, and more impactful. Everything is travelling at the speed of light. Ready and immediate access to an abundance of information is problematic, particularly when quick decisions have to be made. Business leaders have to make split-second decisions about what data is relevant—and what isn’t—while being bombarded with information and knowledge from left, right, and center. Turbulence is the norm and responsiveness the challenge.
Disruption is everywhere, every day. Without accurate assessment of trends, business leaders can go from penthouse to the s**thouse in a matter of months. Consider Borders, the once profitable book-selling chain. By the mid-1990s, Amazon launched as an online book retailer and Borders made a serious strategic blunder. Instead of following Barnes &
Noble in moving online, Borders went international, building a substantial chain in the United Kingdom and opening stores as far away from the United States as Singapore. This global expansion seems to have blurred the focus of Borders’ business in the USA. Ultimately, the international strategy failed. Borders also was slower than it should have been in adopting new techniques for marketing. Big mistake in hindsight; and costly too!2 Being responsive and quick to change direction could’ve meant a dramatically different outcome for Borders.
Amanda Setili, author of The Agility Advantage, puts a convincing case that companies have no option: they must learn to be more nimble and agile. In her book, she cites the cautionary tale of Microsoft.
While the company had enviable profit performance under former CEO Steve Ballmer, it focused too much on protecting their historically strong products, Windows and Office. They failed to make the changes necessary to succeed in the smartphone and tablet markets, and as a result, their share of internet-connected devices declined from 90 percent in 2009 to only about 20 percent today.3
The two cases of Borders and Microsoft illustrate the problems that can occur with well-established firms suffering from a lack of agility thinking.
The landscape I’ve painted seems bleak. It’s only bleak if we think about resolving the challenges I just described with the same thought and tools. But it’s a new landscape; a canvas with exciting prospects that requires an artist with fresh ideas and a new set of paint brushes.
Where the rubber meets the road ...
Capability without interoperability
As Commanding General of the Joint Special Operations Command, General Stanley McChrystal faced this problem I'm about to describe in real time. Although he commanded the most effective military machine ever designed, and could win any battle, he couldn't predict where those battles would be. In his new book, Team of Teams,4 he describes how he reengineered his organization to not merely execute, but to continuously adapt. In Iraq in 2004, General McChrystal was facing his own disruptive threat. His forces completely outclassed the enemy. Yet no matter how many they killed or how many battles they won, new terrorists kept popping up elsewhere.
McChrystal didn't think the problem was one of capability, but "interoperability." His forces would kill or capture Al Qaeda operatives and collect valuable intelligence, such as documents and hard drives. Yet it often took weeks for the prisoners to be questioned and the data to be analyzed. By that time, the information was often no longer relevant or actionable.
Another challenge was with how information flowed. Intelligence analysts were adept at turning raw data into actionable insights, but following protocol, they passed that information up the chain-of-command, where it was passed on to military planners, who would then develop strategies for the troops on the ground. This created further lags.
All in all, McChrystal's military machine was working as it was designed— each subunit was performing to the highest standards—but the design itself was not suited to the task. As McChrystal has said, "it takes a network to defeat a network."
What the General saw was that the problem wasn't how his forces did their jobs, but how they saw their jobs. Commandos strived to conduct raids with deadly precision, reconnaissance teams were focused on keeping an eye on the enemy, intelligence analysts wanted to develop insights about the enemy. Yet the shared mission—defeating Al Qaeda—was being lost.
So McCrystal set out to create a "shared consciousness," by creating connections between teams. He redesigned the command post to encourage interaction, embedded intelligence analysts with commandos and vice versa, and held daily status calls that included all of the diverse stakeholders. That allowed people to look beyond their own jobs and "see the system."
It was that shared sense of purpose that enabled him to empower his forces on the ground. But as the General stresses, the sequence is important. As he writes, "an organization should empower its people, but only after it has done the heavy lifting of creating shared consciousness." That's how he transformed his command into a "team of teams" and prevailed.
While all of this stress on interoperability reduced the efficiency of his teams somewhat, the overall productivity of the organization improved by a factor of 19. In an age of disruption, the only viable strategy is to adapt. Leaders today can no longer afford to think in conventional terms of efficiency, but must shape networks in the context of a shared mission.
Agility enables nimble adaption and quick responses in the landscape I’ve just described; the one you and I are part of. So agility is tied to organizational success, particularly commercial success. Speed and responsiveness, the two constant components of agility, are drivers of performance. Coping with the environment I’ve just described—and competing successfully with other companies—is predominantly about speed and responsiveness. Like lots of things in life, knowing this is the easy part; executing it is the tough part.
So what are the characteristics of the agile enterprise?
Professor Abe Harraf and his colleagues recently identified a set of characteristics of an agile organization. In their article, Organizational Agility, the authors identify 15 features that describe the agile enterprise.5 Harraf et al.’s framework was developed after a comprehensive analysis of the research on agility. I’ll briefly cover these characteristics here.
Just to be clear: The following 15 characteristics are key ingredients for promoting agile behavior in an organizational context. My model, instead, identifies how an organization should evaluate their performance at being agile.
I should also make the point that there is a considerable difference in ideas of the determinants of agility in the burgeoning books on the subject. Nevertheless, there is general agreement on the organizational characteristics of agility.
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