Ensuring your business is equipped to respond to fast-changing market conditions has never been more important. Our business agility and operational excellence expert Simon Tarbett offers some advice to clients when asked the question, Where To Start?
Few business leaders need convincing about the importance of organisational agility. The capacity to respond to fast-changing market conditions has proved key to survival for many companies in recent years, whether they’ve faced Brexit, digital disruption or two years of pandemic.
Even before Covid began creating havoc across the globe, a survey by Forbes Insights and the Project Management Institute, found that 92 percent of executives believed organisational agility was critical to success. Half credited agility for making them faster to market.
Crucially, though, executives were less convinced about their own preparedness, with only a quarter reporting that they considered their organisations highly agile.
It's a scenario that Baringa partner Simon Tarbett has come across often. “At its heart, organisational agility is about increasing the rate of change,” he says. “It's about doing more for less. It's a universal goal in today's climate.”
But while most organisations know they need to be more agile, he says far fewer know how to begin the process.
Where to begin
The truth is that there is never a good time to start, Simon says, as organisational transformation will always seem daunting. Businesses worried about taking the plunge are in good company.
The key, he believes, is for everyone in the company to buy into the concept of organisational agility from the beginning. “Get the leadership aligned. That might mean a bit of training or getting them together in a room, but make sure they’re speaking the same language.”
Just as important is that everyone understands that they have a role in the transformation.
“Most people want to deliver more change more quickly,” Simon continues. “But many of them also want to keep doing what they’re already doing – their strategy, their pet projects and so on. It’s surprising just how many people pay lip service to the concept of change but don’t buy into the fact that they will personally have to go on the journey at some point.”
The importance of rethinking
Businesses also need to recognise that becoming more agile means rethinking on the widest possible scale.
“Organisational agility means looking at everything from how individual teams work, right up to how the business operates at a macro level,” Simon says. “For example, do we still need to have a digital team, a finance team, a mortgages team?”
These are fundamental questions that can lead to “open heart surgery on the operating model.”
Another key point is that “you can’t possibly do everything at the same time”. Businesses may be impatient to make progress but improving agility means taking carefully planned steps. “It’s like a choreographed dance. You need bits of it to move, then you go a bit further.”
Identify measurable outcomes
He advises beginning by selecting a small portfolio of projects and identifying measurable outcomes. A system of OKRs - outcomes and key results - helps teams to focus and align on what they're trying to achieve with measurable goals.
Developing OKRs and a means of achieving them is akin to the sort of focus a business might adopt in crisis mode, when leaders are forced to deal with potentially catastrophic events such as Covid. “It's about capturing that empowerment that you get in a crisis and finding a way of sustaining it.”
Picking the right pilot projects is crucial. “You can't change a £1bn portfolio suddenly but you can change a slice of it,” Simon cautions. “It has to be a slice that is important enough that people care about it, but not so big that you’re impacting the whole business at the same time.”
The pilot projects need to be organised to deliver the outcomes. “Does the team have everything they need to succeed? Might they need more time from the digital team, for example? In an ideal world, 70 – 80% of what they need should be under their control, so there might need to be a bit of organisational change to achieve that. But set them up to deliver.”
An important part of the transformation process is becoming confident in measuring outcomes, which can be uncomfortable for some business leaders, Simon points out. “As you run your pilot projects, you will need to go through a learning journey,” he says. “Your first two quarters probably aren’t going to be great, but by your third or fourth quarter you will start to get used to it.”
How long will it take?
Which leads to the question of just how long the process is likely to take. Clearly, much will depend on an individual business’s circumstances such as industry, market position, size and agility aims. But a reasonable timescale could be two years, Simon believes.
“Generally, you will run your pilot projects for six months, coaching, refining and learning as you go,” he says. “Then you’ll probably kick off two more and start to scale up with a clear objective of where you are trying to get to.”
Creating business agility is an iterative process, he warns: “Your first design won't be right and there will be teething issues, but that's ok as it's much better to try and learn rather than waiting to agree the perfect design.”
He also cautions against putting too much emphasis on achieving cost savings, especially in the early stages. “Don't run with a cost agenda,” he says. “One of your targets will often be costs but you need to have faith that those savings will come in time. The main aim is growth and engagement, and organisations that take that mindset are most likely to succeed.”
Even though businesses aiming to improve organisational agility need to be prepared for the long haul, Simon is confident they are likely to see benefits in the shorter term. “You can't change the whole organisation in a week but you won't have to wait two years to see the results,” he says.
“Be ambitious and be patient and change will come.”
Partner, expert in Operational and Organisational TransformationGet to know Oli
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