Coping with a fast-paced business environment isn’t everyone’s cup of tea. With the Coronavirus pandemic posing unprecedented challenges to organizations last year, it has become more important than ever for businesses to be agile and respond quickly to new demands to ensure sustainability. In this article, we will discuss what it means to be an agile organization and the characteristics of an agile organization.
An agile organization is a term used to refer to organizations that respond to changes in the business environment, consumer needs, and the marketplace quickly and efficiently. These organizations design their processes in a manner that allows them to be more flexible and successfully adapt to shifting consumer demands and other challenges.
Agile organizations typically have a stable foundation. This foundation acts as an anchor of sorts and allows the organization to pivot and transform its strategies while still staying true to its core values and processes.
According to a study by the McKinsey Agile Tribe Group, agile organizations demonstrate 5 common characteristics that play an essential role in their ability to adapt and respond to changes. These include:
Your business strategies serve as an important determinant of organizational agility. As per McKinsey, agile organizations adopt a series of practices that help them account for new changes in the business environment. They typically have a shared purpose and vision that drives them and lends focus and cohesion to their business strategies and goals.
Besides this, agile organizations also focus on sensing and seizing new opportunities that confront them. They are able to take measured risks with a high pay-off. Agile organizations are also smart and flexible about their resource allocation. They can swiftly shift resources to pursue new opportunities, fulfill new consumer needs, and cope with business challenges.
Finally an agile organization also has a system in place for offering actionable insights that can guide the organization’s strategies.
Structure is vital to building agile organizations. As noted by McKinsey, these organizations have a clear and flat structure in place that clearly defines the role of various personnel across different levels of management. This structure also identifies who is accountable for enforcing a certain aspect of the organization’s goals, strategies, and tactics. The emphasis on accountability and clarity allows for smoother execution, monitoring, and improvement of organizational practices.
Besides this, agile organizations display hands-on governance and are led by responsible individuals who understand the impact of the organization’s actions. The management of these organizations is highly involved in the daily activities and decisions taken by their team. They take a proactive approach, which allows them to anticipate new market trends.
Agile organizations also have an open virtual and physical environment and frequently partner with other third-party organizations in their ecosystem to facilitate change.
As mentioned earlier, agile organizations are able to leverage new opportunities and anticipate market changes. This is supported by their rapid decision-making processes. They have a standardized workflow process that allows them to experiment and iterate more rapidly. There is also an emphasis on transparent communication and the flow of information to enable continuous learning.
Besides this, an agile organization focuses more on action-oriented decision-making. They keep a close eye on employee performance to support the need for flexibility and agility and have rapid learning cycles. These cycles accelerate their ability to transform and modify their processes and meet new challenges.
An organization is only as good as the people that are a part of it. In the case of agile organizations, it’s important for these companies to have a dynamic and dedicated team of individuals. These individuals must be passionate about pursuing organizational objectives and possess an entrepreneurial drive that encourages innovation and improvement.
They must also be able to work together in a cohesive manner to leverage the strengths of different team members and deliver results. Besides this, these organizations typically have a combination of shared and servant leadership styles and introduce mobility in roles to keep employees engaged.
Shared leadership refers to sharing of influence and power between team members. One person still remains in charge here. It is known for improving organizational performance and can encourage more autonomy, transparency, and idea-sharing among employees.
Servant leadership suggests that a leader’s goal is to serve the organization. Some of the common principles associated with this leadership philosophy include listening, self-awareness, empathy, persuasion, foresight, etc.
The final characteristic of an agile organization is that it incorporates next-generation enabling technology. Instead of sticking to traditional tools and systems, these organizations are willing to embrace change. They ensure that their employees have access to evolving systems and tools to introduce automation and offer new learning opportunities.
The utilization of these technologies also allows these organizations to improve their existing processes, introduce more efficiency, and execute their strategies much more easily.
According to the Bureau of Labor Statistics, nearly 20% of small businesses fail in the first year. By the second year, 30% of these small businesses fail. Introducing agility and flexibility in your workflow processes can play a vital role in overcoming some of the challenges that threaten the future of your business.
As per the McKinsey Agile Tribe Group, there are 5 factors that can contribute to this. These include:
If you are interested in learning more about organizational agility, get in touch with our team at Edge Collab. We help companies accelerate and improve their organizational processes to successfully launch products, increase revenue, and move toward long-term sustainability.