The way organisations are structured is becoming a source of significant competitive advantage.
In this era of a continuous flux, businesses are striving to find new ways to unlock their true potential to remain competitive. As they look to achieve higher quality, increase innovation and speed, while also driving a reduction in their costs, firms do not perhaps look as closely at their organisational structure to unlock benefits as much as they could. Leading companies understand that embracing organisational agility is extremely powerful, allowing them to adapt to shifting priorities quickly without disrupting the operating rhythm of the wider enterprise.
Businesses can struggle to prepare adequately for the future and often revert to mass organisational restructuring, which increases the risk of negative effects on their wider transformation commitments and puts employees through an uncomfortable experience. Employees subsequently express lower engagement levels, including trust towards their organisation, which negatively affects motivation, effectiveness, and retention.
Conversely, high-performing businesses are breaking down traditional silos and embracing adaptive delivery methods that enable them to respond more effectively to changing customer needs and constantly evolving market dynamics. If there is no ‘one size fits all’ approach – each organisation’s journey to discover, design, and build a resilient and adaptive environment will be unique – through our research and experience in helping companies worldwide to unlock their potential we have identified five key lessons for firms looking to embrace organisational agility:
1. Leadership and culture is key
Lack of change in leadership behaviours and thinking can significantly hinder the ability of organisations to transform their culture. Leaders need to lead by example when changing their business for better future outcomes. They must authentically model the behaviours and mindsets required to develop business agility. To foster an environment where innovation and collaboration drive adaptive delivery, leaders also need to shift their thinking from certainty to discovery, and from authority to effective partnering.
2. Fund and measure what matters
By funding and effectively measuring business outcomes rather than specific work outputs, such as cadence and velocity, businesses can more quickly and easily invest in new products or services as soon as market opportunities arise. Metrics drive behaviours. So, if you overlay effective governance on this process, the business can rapidly pivot away from work that is not delivering the expected and measured business value. Investing time upfront to agree on how to limit the risk of over- or under-funding wanted outcomes with a clear set of measures is critical for teams to align at all levels of an organisation.
3. Map out the colleague journey
This is a people-led transformation, so it is paramount that colleagues are taken on the journey right from the start. Setting a clear vision, or North Star, and laying out the roadmap to achieving this journey is key. Leaders need to communicate frequently and with clarity. They need to share what’s working and transparently address where they find challenges in the system. They should recognise and celebrate colleagues who embrace and are leading the change. A wide range of learning and development opportunities should be available to colleagues to support their career pathway and encourage the continued development of the workforce. Training programmes should be available for those colleagues who wish to transition into new roles or to upskill themselves.
4. Plan and sequence activity at all levels
Organisations need to set up capabilities and mechanisms that create the necessary transparency to plan and sequence work to drive these value outcomes at all levels. Organisations that successfully embrace business agility, are making effective use of systems, such as Kanban and Lean Portfolio Management, to plan and sequence work throughout the business. Kanban isn’t just a ‘Jobs to be Done’ board or a ‘To Do, Doing, Done’ board. Kanban is a pull system of work, but the order and priority of work is mission critical – choosing the work that delivers the most value for the least amount of effort.
Lean Portfolio Management (LPM) is another vital component of agility that enables effective funding and governance and ultimately staging of value outcomes planned and sequenced for delivery in a business. An effective LPM process creates a backlog of valuable work for the relevant teams, squads, tribes, or value streams to deliver. This process helps the business understand where value is being delivered and individuals’ roles in generating this outcome. The agile teams or squads will have their own mechanisms and tools to plan and sequence work that they decide to pull from the relevant portfolio backlog, and all these concepts must be continuously reviewed and improved.
5. Collapse functional silos
There should be little distinction in adaptive delivery between business and technology. Available business skills must be placed together in a way that best creates value for the customer in a value stream(s) – consistently delivering a flow of wanted value outcomes to customers. It doesn't matter what the internal silos or structures are, teams must be enabled to overcome the historical political culture associated with traditional hierarchical structures to deliver what customers need.