Building the critical foundation of an agile organization
The foundations of organizational agility start with a stable backbone upon which to build. Think of it as the hardware and operating system of a good smartphone. You don’t need to predict all the “apps” you’ll eventually want on your phone, you just need the right stable platform, so you can download the apps you want later. Even apps no one had dreamed of can be invented and added, without having to reinvent the phone itself.
If its basic stable organizational platform isn’t built for agility, an organization may find that its “apps” – sticking with the smartphone analogy – will prove very difficult to sustain and scale over time. The wrong stable backbone leads to frustratingly slow adaptation to change, yet a near-constant cycle of painful, disruptive re-orgs to address these shortcomings.
McKinsey’s recent research identifies seven foundational practices that are essential to support and sustain agile practices across an organization.
The first six practices are stable ones. They include shared purpose and vision, actionable strategic guidance, performance orientation, action-oriented decision architecture, entrepreneurial drive, and shared and servant leadership.
The seventh – information transparency – is dynamic. Information transparency requires that employees have unfettered access to operational, financial and customer information, and that they quickly share learnings, ideas and insights across organizational boundaries. It can be a low-tech version of sharing information very rapidly so that those working on related issues have a common set of facts and information to work from.
Primarily, it’s simply people having conversations and meetings and collaborating with each other, aided by platforms for such dialogue as well as organization design and organizational behavior.
Here are a few guideposts:
Create a North Star direction to guide, rather than control, your people. Deliver a strong shared purpose across the organization, where people feel personally and emotionally invested in their work and tapped into a sense of meaning. It also requires a much more ongoing, collective effort to translate purpose into a strategic direction.
Build a culture of performance that goes across, not just top-down. This requires a customer-centered, end-to-end view of performance, not the typical top-down approach. This means constant feedback – from external input and customers, too – and adjustments as the organization assesses, progress and recalibrates.
Fix your decision-making. Complicated, slow bureaucratic decision-making must go. This requires rethinking how decisions get made, segmenting decisions and applying the appropriate best practices based on decision type. The goal is ruthless role clarity. When you delegate a decision, you really delegate.
Invert the pyramid. This idea refers to the shape of a typical hierarchical organization: the CEO sits at the top and, as you go down the ladder, each management layer gets larger. As a result, responsibility shifts from deciding, directing, thinking and making choices to doing, supporting, enabling and executing the directives of those at the bottom. It is the front line where the real work is done, so put the front line at the top and the CEO is at the bottom.
This creates the environment for success.
February 9, 2018 – by Aaron De Smet