AGILE
MANAGEMENT SPECIAL Leading agile transformation: The new capabilities leaders
need to build 21st-century organizations
To
build and lead an agile organization, it’s crucial that senior leaders develop
new mind-sets and capabilities to transform themselves, their teams, and the
organization.
For many organizations, surviving
and thriving in today’s environment depends on making a fundamental
transformation to become more agile. Those making the transition successfully
are achieving substantive performance and health improvements: enhanced growth,
profitability, customer satisfaction, and employee engagement.
More than any other
factor, the key to a successful agile transformation is for leaders,
particularly senior leaders, to develop substantially new mind-sets and
capabilities. This article summarizes our guide, Leading agile transformation: The
new capabilities leaders need to build 21st-century organizations, to readying
leaders for agile transformations.
The agile story
Before we dive deep,
it’s useful to take a broader view of agile, and particularly what sets agile
organizations apart from traditional ones.
Characteristics of traditional and agile
organizations
Simply put, the
dominant traditional organization model evolved primarily for stability in a
well-known environment. It is based on the idea of an organization as a
machine, with a static, siloed, structural hierarchy that operates through
linear planning and control to execute one or very few business models.
Agile organizations,
viewed as living systems, have evolved to thrive in an unpredictable, rapidly
changing environment. These organizations are both stable and dynamic. They
focus on customers, fluidly adapt to environmental changes, and are open,
inclusive, and nonhierarchical; they evolve continually and embrace uncertainty
and ambiguity. Such organizations, we believe, are far better equipped than
traditional ones for the future.
While there are many
different forms of enterprise agility, they share some common trademarks. We
have identified and enumerated these in a related article, “The five trademarks of agile
organizations.”
Leadership in agile organizations
This new kind of agile
organization requires a fundamentally different kind of leadership. Recent
research confirms that leadership and how leadership shapes culture are the
biggest barriers to—and the biggest enablers of—successful agile
transformations.
Organizations must
therefore begin by both extending and transcending the
competencies that made their
leaders successful in the past. Leaders need three new sets of capabilities for
agile transformations. First, they must transform themselves to evolve new
personal mind-sets and behaviors. Second, they need to transform their teams to
work in new ways. Third, it’s essential to build the capabilities to transform
the organization by building agility into the design and culture of the whole
enterprise.
Transforming yourself
To fully transform
yourself, several shifts will be necessary—and leaders will need to make these
changes in a disciplined way.
Shifting from reactive to creative mind-sets
Changing our
mind-set—or adjusting it to the new context—is no easy task, but developing this “inner agility” is essential in releasing our
potential to lead an agile transformation.
Reactive, or
socialized, mind-sets are an outside-in way of experiencing the world based on
reacting to circumstances and other people. Creative, or self-authoring,
mind-sets are an inside-out way of experiencing the world based on creating our
reality through tapping into our authentic selves, our core passion and
purpose.
Research shows that
most adults spend most time “in the reactive,” particularly when challenged,
and as a result, traditional organizations are designed to run on the reactive.2 To
build and lead agile organizations, however, leaders must make a personal shift
to run primarily “in the creative.”
There are three
fundamental reactive-to-creative mind-set shifts we have found critical to
foster the culture of innovation, collaboration, and value creation at the
heart of agile organizations:
·
From
certainty to discovery: fostering innovation. A reactive mind-set of certainty is about playing
not to lose, being in control, and replicating the past. Today, leaders need to
shift to a creative mind-set of discovery, which is about playing to win,
seeking diversity of thought, fostering creative collision, embracing risk, and
experimenting.
·
From
authority to partnership: fostering collaboration. Traditional organization
design tends towards siloed hierarchies based on a reactive mind-set of
authority. The relationship between leaders and teams is one of superior to
subordinate. Designed for collaboration, agile organizations employ networks of autonomous teams. This requires an underlying
creative mind-set of partnership, of managing by agreement based on freedom,
trust, and accountability.
·
From
scarcity to abundance: fostering value creation. In stable markets, companies
maximize their shares at the expense of others. This win–lose approach reflects
a reactive mind-set of scarcity, based on an assumption of limited
opportunities and resources. Today’s markets, however, evolve continually and
rapidly. To deliver results, leaders must view markets with a creative mind-set
of abundance, which recognizes the unlimited resources and potential available
to their organizations and enables customer-centricity, entrepreneurship,
inclusion, and cocreation.
A disciplined approach
While these mind-set
shifts might be new and require a significant “letting go” of old beliefs and
paradigms, collectively, they form a very disciplined approach to leadership.
And because of inherent autonomy and freedom, leadership in agile organizations
comes from a self-disciplined approach—leading not in fear of punishment or
sanction but in service of purpose and passion.
Transforming your teams
Next, it’s important to
learn how to help teams work in new and more effective ways.
Help teams work in agile ways
How might leaders help
teams work in new and more agile ways? And what does this new way of working
require of leaders? There are three essential leadership requirements that
follow from all agile ways of working.
First, leaders must
learn to build teams that are small, diverse, empowered, and connected. Second,
leaders must allow and encourage agile teams to work in rapid cycles to enable
them to deliver greater value more efficiently and more quickly. Third, leaders
must keep agile teams focused on the external or internal customer and on
creating value for customers, by understanding and addressing their unmet, and
potentially even unrecognized, needs.
Embrace design thinking and business-model innovation
We have found that in
addition to being able to lead in this new agile way of working, it is
important for leaders to understand the key elements of two other relatively
new disciplines: design thinking and business-model
innovation.
Originating in
industrial and other forms of design, design thinking is a powerful approach to
developing innovative customer solutions, business models, and other types of
systems. This begins with understanding the entire customer experience at each
stage of the customer journey.
In organizations that
are agile, each team is viewed as a value-creating unit, or as a “business.”
These teams pursue business-model innovation at every opportunity, seeking new
ways to meet the needs of their internal or external customers and deliver more
value to employees, investors, partners, and other stakeholders.
Transforming your organization
Here, leaders must
learn how to cocreate an agile organization purpose, design, and culture.
Purpose: Find the north star
The first distinctive
organization-level skill leaders need to develop is the ability to distill a
clear, shared, and compelling purpose—a north star—for their organization.
Rather than the traditional executive-team exercise, in agile organizations,
leaders must learn to sense and draw out the organization’s purpose in
conversation with people across the enterprise.
Design: Apply the principles and practices of
agile organization design
The second
organization-level skill leaders need to develop is the ability to design the
strategy and operating model of the organization based on
agile-organization principles and practices. Most senior leaders of traditional
companies have a well-honed skill set in this area that reflects traditional
organization design as a relatively concentrated, static system: one or a very
limited number of major businesses, each with a long-established business
model, typically coexisting somewhat uneasily with a set of corporate
functions.
To design and build an
agile organization, leaders need a different set of skills based on a different
understanding of organizations. They must learn to design their organization as
a distributed, continually evolving system. Such an organization comprises a
network of smaller empowered units, with fewer layers, greater transparency,
and leaner governance than a traditional model. More specifically, leaders must
learn how to disaggregate existing large businesses into a more granular
portfolio; transform corporate functions into a lean, enabling backbone; and
attract a wide range of partners into a powerful ecosystem.
Culture: Shape an agile organizational
culture
The third
organization-level skill leaders need to develop is the ability to shape a new
culture across the organization, based on the creative mind-sets of discovery,
partnership, and abundance and their associated behaviors.
Given the openness and
freedom people experience in an agile organization, culture arguably plays an
even more important role here than in traditional organizations. To shape this
culture, leaders must learn how to undertake a multifaceted
culture-transformation effort that centers on their own capabilities and
behaviors. This includes the following steps:
·
role
modeling new mind-sets and
behaviors authentically
·
fostering
understanding and conviction in a highly interactive way, through sharing
stories and being inspired by the energy and ideas of frontline teams
·
building
new mind-sets and capabilities across the organization, including among those who do not
formally manage people, and weaving learning into the fabric of daily activity
to become true learning organizations
·
implementing
reinforcement mechanisms in
the agile organization design
An agile approach to developing leaders
Many organizations
start their agile pilots in discrete pockets. Initially, at least, they can
build agile-leadership capabilities there. But to scale agility through an
organization successfully, top leaders must embrace its precepts and be willing
to enhance their own capabilities significantly. Eventually, a full agile
transformation will need to encompass building the mind-sets and capabilities
of the entire senior leadership across the enterprise. To do this in an agile
way, five elements are essential:
1.
Build
a cadre of enterprise agility coaches, a new kind of deeply experienced expert able to help
leaders navigate the journey, supported by a leadership-transformation team.
2.
Get
the top team engaged in developing its own capabilities early on, as all senior
leaders will take their cue from the executive team.
3.
Create
an immersive leadership experience (anything from a concentrated effort over three or
four days to a learning journey over several months) to introduce the new
mind-sets and capabilities, and roll it out to all senior leaders.
4.
Invite
leaders to apply their learning in practice, both in agile-transformation initiatives already under
way and through launching new organizational experiments.
5.
Roll
out the leadership capability building at an agile tempo, with quarterly pauses to review
the leadership experiences, experiments, and culture shifts over the past 90
days, and then finalize plans and priorities for the next 90 days.
Agile transformation is
a high priority for an increasing number of organizations. More than any other
factor, the key enabler to a successful agile transformation is to help
leaders, particularly senior leaders, develop new mind-sets and capabilities.
Doing so in an agile way will enable the organization to move faster, drive
innovation, and both adapt to and shape its changing environment.
By Aaron De Smet,
Michael Lurie, and Andrew St. George
https://www.mckinsey.com/business-functions/organization/our-insights/leading-agile-transformation-the-new-capabilities-leaders-need-to-build-21st-century-organizations?cid=other-eml-alt-mip-mck-oth-1810&hlkid=1539990703f542979c14f5270d3f715d&hctky=1627601&hdpid=8955ac10-458a-459f-b24a-87ab27bd7880
No comments:
Post a Comment