Organisational agility and the firm of the future
The COVID-19 pandemic has led many business leaders to examine what the organisation of the future should look like, with new approaches to remote working, flexible hours and even trials of a four day week. These discussions have mostly focused on ‘where we work’ and ‘when we work’, but has largely ignored the much more influential elements of ‘how we work’ and organisational culture.
Yet these considerations will be key as organisations set themselves up for the future. In our view, it’s those organisations able to embrace and embed the principles of organisational agility who are set to succeed.
There are five principles of organisational agility that can help organisations become fit for the future:
1. Centre on your customer
The organisation of the future constantly tests its ideas and deliverables with its customers. But if we’re all honest, we all too often see a feature or addition being proposed by the CEO or similar, then pushed through without the usual end-customer engagement. This delays other releases, frustrates customers, and diminishes value.
Working with a multi-sector client seeking to embed organisational agility, we ensured that new ideas were constantly tested with end users both before and after development, and that risks were taken with a ‘fail fast’ mentality. This involved making small ‘minimum viable products’ and getting feedback quickly to minimise non-valuable work. Critically, every person understood how their role related to the firm’s customer – even those who were not traditionally customer facing – and a mechanism existed to prioritise and fast-track actions with the greatest customer impact.
2. Speed up time to value
The organisation of the future understands that IT is expensive and that the continual release of new features is an efficient way to allow the business to learn what direction to head in next. Yet it remains difficult for firms to release to production. Often, while seeking to adopt Agile techniques, organisations compromise with a ‘water-scrum-fall’ approach. This is where, despite best intentions, the application, product or service is built and released in one big bang, with no certainty that its features will resonate with end users.
Working with an international financial services client, we encouraged them to get their first release to production, even though it was small, with minimal features. This immediately generated feedback from users, leading to updates that otherwise wouldn’t have been considered. We helped them move to a regular release cycle, where functionality was always completed and delivered. This ensured software was functioning and that the programme could be flexed if priorities changed. All of this significantly increased leadership confidence in the programme. We also helped them develop a mix of in-sprint and next-sprint testing, so that features could be delivered with confidence they would integrate with the wider architecture.
3. Design for simplicity
Simplicity of design can be applied both to product design and organisational design. Overcomplicated processes and KPIs can slow delivery down just as much as trying to deliver an overly complicated product. In the rush to measure and quantify everything, activity becomes focused on reporting rather than the delivery of value to customers. And managers become distracted from the issues that really need their horsepower.
Working with a large building society, we ensured they picked metrics that were meaningful, and then treated these with the perspective they deserved. Some of their best KPIs enforced learning over time such as:
- Is the delta between delivered and committed story points decreasing?
- What is the trend in average age of high severity defects?
- What is the team mood?
- Are stories being smoothly 'burnt down' (delivered) each sprint?
- How far are business analysts ahead of development in refining stories? Can we forecast the next release quantitively?
Crucially, the business had as few as five statuses in its tooling (JIRA) to track stories from design through to completion. This allowed managers to use the tool’s stock reporting features easily, and to forecast releases with more informed data to leadership.
4. Build to evolve
A future organisation ensures that opportunities to evolve and learn are captured at all levels. Critically, it also ensures that findings lead to action. But in our experience, such as when first engaging with a large telecommunications firm, many organisations fall at the hurdle where insights need to be followed up with action, not just logged. Such pitfalls see engagement drop.
We helped one client see a boost to engagement when regular improvement sessions were hosted, with suggestions revisited afterwards to show the team what was being done to build on their great ideas. In partnership with the client, we vocally drove a culture of learning – encouraging people to see continuous improvement as a tool, not as workload. People were comfortable admitting where mistakes had been made, allowing the business to draw out valuable learning opportunities.
5. Liberate your people
The organisation of the future assigns individual key players to take responsibility for change within different value streams of an organisation. But all too often, we see organisations with a complex matrix of leaders, all holding a very small slice of responsibility with multiple overlapping areas. This dilution of responsibility reduces accountability, fragments decision making, and encourages internal politicking.
When delivering change at scale, it’s much more effective to delegate overall responsibility to one accountable executive. While stakeholders are still consulted, this individual has the authority to make meaningful decisions, which greatly enhances the team’s ability to make and execute a plan. These accountable individuals may not always be ‘traditional’ leaders. In this situation, we worked with a client to identify ‘halo leaders’ to step up. These are the people at every level of the organisation who are passionate about the vision and have the respect of their peers. No longer reliant on ‘trickle down’ change, this overcomes the tendency for change initiatives to not make it past the doors of the boardroom.
Find out the five dimensions of organisational agility – and the secrets to delivering them at scale
Leverage organisational agility to gear up your firm for the future
The organisation of the future is an agile one. Individuals are empowered, they know what they want to change and how to effectively measure success. They use these measurements to constantly learn at all levels, and drive engagement through a positive work culture. They learn through listening to each other – and to their customers. They ensure they are always ready to adapt, frequently releasing new functionality, gathering feedback, and limiting work-in-flight so that the minimum effort is wasted if priorities change.