Organizational Agility for Modern Business Success

Leading an organization puts you in charge of a great deal of opportunity. These chances to jump on trending technology or take charge of industry innovations can launch your business to new heights with the right system in place for pivoting quickly. That's where organizational agility comes into play.

Organizational agility is a concept that relates to an organization’s ability to pivot with ease, revolutionize itself when new opportunities present themselves and respond to market changes. Agile organizations take iterative approaches to work, which enables teams to create and test products more quickly to determine the need for adjustments.

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A business approach that includes organizational agility can be incredibly efficient. In the case of a traditional organization adopting Agile methodology, it can be transformative. Successful organizations that undergo Agile transformations see gains in efficiency, customer satisfaction, employee engagement, and operational performance of around 30 percent, according to a McKinsey study [1].

Understanding the essence of organizational agility

Organizational agility is a term describing how businesses can enhance processes that enable them to readily adapt operations and act on new opportunities.

Many businesses originated using traditional incremental methods to develop products, collaborate between teams, or establish a company culture. However, these methods built for control and stability can struggle to keep up with the speed of innovation in the modern business world. Agile organizations seek to make widespread changes that equip them to respond quickly to various circumstances.

Key pillars of the Agile methodology

In 2001, 17 leaders of software development enterprises met in Utah to discuss enhanced working practices. Their aim was to find common ground on business practices that allow organizations to produce products faster and work together more seamlessly. What resulted from this meeting became a paradigm-shifting doctrine known as the Agile Manifesto.

The Agile Manifesto included four key pillars to establish a new way of approaching collaboration and the development of products, prioritizing certain values over others:

• Individuals and interactions over tools and processes

• Working software over comprehensive documentation

• Customer collaboration over contract negotiation

• Responding to change over following a plan

While software development leaders created the Agile mindset, the idea behind this method of work and collaboration has spread to nearly all industries and other areas of business, including finance and human resources, in the decades following the Agile Manifesto. The Manifesto laid the groundwork for many new management concepts to come.

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Strategies for building an Agile organizational culture

Creating an Agile culture within an organization can be challenging. After all, adopting organizational agility depends on doing away with traditional leadership methods. Changes toward agility in an organization are often rapid and large-scale.

The following strategies can help your business create a setting where Agile practices may evolve and thrive.

Plan for any scenario

Focus on how your organization will develop strategic responses to the situations that may arise. These responses can include simulation exercises that sharpen your employees’ and teams’ abilities to make decisions under pressure. Encourage a culture of flexibility in which leaders are ready to pivot quickly when new information changes how things should be done.

Promote learning and skill-building

Change can be fantastic for your organization, and keeping an open mind toward change extends from the top down to an individual level. You can promote innovation by consistently providing opportunities for employees to learn skills that open new possibilities for the business.

Work to remove information silos

In a traditionally structured company, directives and information come down the hierarchy of the company from leadership. This tends to create silos in which each department of the company works with its own objectives and metrics by which to measure progress. Sharing information between departments at all levels and measuring activity uniformly ensures better collaboration and cross-functionality in your organization.

Provide resources for career advancement

Employees often benefit from having their employer lay out career goals or options. Managers can encourage employees to speak about their career aspirations and provide resources to reach those goals. These employees may blossom into people with new skills, which equip the organization to pursue opportunities as they arise.

Types of Agile frameworks

Agile can take shape in a few ways within organizations and teams. Among many frameworks, some of the most popular methods include Scrum, Kanban, and Scaled Agile Framework (SAFe). 

Scrum

Scrum is a well-established Agile method. In a Scrum team, daily stand-up meetings and self-organizing teams aim to maximize communication and fast-track project development. Teams work on projects in time intervals, known as sprints, in which they work together intensively to deliver a product or component of the product within the allotted time period. Scrum masters are team leaders who seek to remove impediments that slow work progress.

Kanban

Toyota popularized Kanban, a Japanese word meaning “visual board” or “card,” using this method to ensure precise timing in product development. With Kanban, teams visualize workflow, mapping out each task on a card and placing it on a physical or virtual board that tracks progress. A team breaks down work into parts with the goal of completing each one as quickly as possible. Each workflow state can only have a certain number of “work-in-progress” items, which regulates the amount of work the team must complete at one time.

Scaled Agile Framework (SAFe)

Scaled Agile Framework (SAFe) seeks to transform an organization with a traditional hierarchy into one that adopts Agile principles within various business areas. This framework utilizes an established company's stability and resources. Teams work to scale Agile across the organization, taking advantage of the entrepreneurial drive already inherent in the business. Companies can achieve cross-functionality once they adopt SAFe principles into their operations, applying them to areas in both business and technology.

Navigating challenges in implementing organizational agility

Challenges in organizational agility often include adjustments to management styles or equipping your organization with the right technology resources to embrace the collaboration that an Agile approach requires. These are some common roadblocks to implementing organizational agility.

Striking the right balance

An Agile business can move quickly, empower groups of employees to pursue ideas and make improvisational adjustments to daily operations. However, miscalculated decisions can land your organization in a difficult place. Your business should be able to discern between areas where it can unleash creativity and where it can use stability as an advantage.

Adjusting work management methods

Transitioning to an Agile method of working requires change, and some managers may struggle with giving up control. Be sure to implement Agile methods in areas of your organization where it makes sense first, and less readily adaptable departments may become more open to trying them. Leaders can ease these tensions by providing clear communication and support and helping teams develop a mindset shift as they make these adjustments.

Adapting technology to fit the Agile model

One tenet of Agile is eliminating technology and information silos. Your organization will likely need to adjust its tech stacks to accommodate collaboration and sharing of information across departments. A technology solution that improves transparency and information flow is paramount for an Agile organization. Another technology concern is to be sure that you can update or adapt it to changing demands, as the current tech solution may not be what the organization needs in a year or two.

Success stories: Companies championing organizational agility

Among the most recognizable toy companies in the world, LEGO underwent a transformation through the use of Agile methodology that allowed the organization to push past limitations and improve its digital products.

In 2016, LEGO had positioned itself well to participate in a digital economy, creating products associated with video games and engaging with online communities. However, several more aspects of the digital economy—including e-commerce, disruptive business models, and web-based services—posed challenges to which LEGO needed to adapt.

LEGO sought to implement Agile methodology as part of a leadership and operations shakeup. The company moved from a Waterfall process to one in which teams worked cross-functionally to produce solutions to problems in shorter cycles. Overarching “excellence teams” ensured quality standards and collaboration.

The transformation of LEGO into a more nimble, digitally engaged company solved an existential problem. Whereas industry analysts gave the company a grim prognosis in 2003, company leadership had transformed the company by 2016 into a digital enterprise that could react more readily to changing demands and market trends. 

Siemens, a German multinational technology corporation, is another company that has benefited from Agile practices. Siemens implements Agile methodology in many sectors, including service development, management, IT infrastructure, and communications.

Scrum and Kanban are critical components of Agile practices within the corporation. Company leadership focuses on using Agile practices because they prioritize quick response and development of technologies that capitalize on meeting customer needs as they arise. Siemens leadership adjusted its thinking from planning meticulously for the future to allowing teams the freedom to meet rapidly changing customer needs.

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Organizational agility is key for businesses that seek to adjust well to change and new information. An organization that adheres to Agile methods splits the development of products into pieces and intervals of time, allowing teams to adapt the process amid changing needs and opportunities.

Learn more about Agile methodology with Google’s Agile Project Management course, part of the Google Project Management Professional Certificate offered on Coursera. This four-part course provides an overview of the Scrum framework, with lessons on how organizations administer Agile project management.