Activate agility: the five avenues to success
In a time of rapid
change and unprecedented complexity, only the nimble survive! In 1935, the life
expectancy of an S&P 500 company was 90 years. By 2010, it was 14 years and
studies show that it’s getting even shorter. No wonder more and more companies,
who are tired of change fatigue and endless restructuring, are looking at how
they can become a more agile
organization and retain their competitive advantage.
Agility, as defined by
McKinsey Senior Partner, Aaron De Smet, is the “ability of an
organization to renew itself, adapt, change quickly, and succeed in a rapidly
changing, ambiguous, turbulent environment. Agility is not incompatible with
stability – quite the contrary. Agility requires stability for
most companies.”
In short, agility is an
organizational model designed for the age of the iPhone and offers a future
without major restructurings. Adopting the agile way of working generates up to
three times higher shareholder returns, develops better products faster and
cheaper, and keeps customers and employees happy.
Our recent experience
makes us believe that this is possible at an enterprise-level. Based on our
research and experience with agile organizations, they universally
exhibit five trademarks:
·
A clear North Star to which the entire organization, from management
to employees, works toward. Think of Amazon: it is a massive conglomerate of
businesses by any measure, stretching from technology to groceries and
employing more than 350,000 people. Yet, every employee would attest to one
common north star: they are obsessed with the customer.
·
Cross-functional teams
aligned to a specific mission that
can be deployed rapidly and have as few layers as possible. Spotify, with its
popular app for listening to music, is not a small organization. It spans
multiple countries across two continents and employs over 1,600 people.
However, it is organized across cross-functional teams comprising all the
necessary technology and business resources for working against a clear mission
that can be changed rapidly based on business outcomes. And all of this is
done within three layers.
·
The ability to work in
rapid iterations and react to learnings based on those
iterations. Consider Tesla: while today it is recognized for creating futuristic,
self-driving vehicles, its first car was little more than a typical vehicle
with a battery and one of its later models even caught on fire! In less than a
decade, Tesla has delivered multiple iterations of its vehicle, and one that is
designed based on learnings from customers.
·
A reimagined people model has the “boss” making fewer top down decisions and
rather, acting as a servant leader who helps removes roadblocks, provides
coaching and feedback, and empowers teams to make decisions within their mission.
Also, career progression is reconsidered as a more expertise-based model with
clear symbols of progression. Zappos, the online retailer, embodies such a
people model.
·
Re-envisioned technology, which leverages the power of the Cloud and make use of
the latest DevOps practices, lets companies react rapidly to business needs.
Netflix, for instance, releases new features to its customers a couple of times
a day. Contrast that to some of the large incumbents that release annually.
Given the scale of
change required, we believe agile transformations must be comprehensive and
iterative, carried out in short repetitions. Above all, they require a
leadership team committed to change and organizations with missions strong
enough to sustain the change needed.
https://www.mckinsey.com/business-functions/organization/our-insights/the-organization-blog/activate-agility-get-these-five-things-right?cid=other-eml-alt-mip-mck-oth-1803&hlkid=e0c945ea37864e5f8eae0289f16927a6&hctky=1627601&hdpid=69d4cb78-4c11-416c-b540-4ad2772a4b31
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