Thursday, October 8, 2015

If Your Business isn’t Agile, You Won’t Have a Future. It’s That Simple

Guest post from Linda Holbeche:
The rulebooks of business are being rewritten. So rapid is the pace of new developments, and so diverse the forms of competition, that many large corporations struggle to be agile enough to compete. Tiny niche players can emerge from nowhere to take the market or make expensively researched products obsolete overnight. Not surprisingly, the need for organizational agility sits high on executive agendas everywhere. 

To compete effectively, speed, innovation and intense customer focus are of essence. To a very large extent, these are the product of the discretionary effort of clever people. Yet conventional silos, management practices and mindsets act as brakes on all of these. In today’s interconnected world, and with today’s multi-generational and multi-cultural global workforce, what people want and expect from work is changing and the old-style corporate “givens” are being challenged as no longer fit for purpose. So how do agile organizations square the circle – obtaining the speed, innovation and flexibility they want – while employees get the fair deal, at least in terms of development, flexibility and empowerment, they want? Is it possible to get the best of both worlds?

To build an agile organization requires a revolution in conventional management thinking and practice. For over 30 years business schools have taught managers the centrality of shareholder value and the “science” of top-down, linear planning, short-term thinking and “slash and burn” employment practices. Such approaches typically result in large gaps between strategic intent and implementation, loss of trust and a disenfranchised, insecure workforce. When employees are treated like disposable chattels, they are less likely to want to release their discretionary effort to benefit the business – everything becomes a transaction, and the intangible extra, employee goodwill, evaporates.

For agility the “art” of strategizing is needed. This is the process of involving employees in data-gathering and decisions that affect them and their organizations. This more inclusive approach tends to close the strategic implementation gap since people understand why change is needed and can contribute to finding solutions to business challenges. This is shared leadership in action and works on the principle of “I own what I help to create”. When they are involved, people tend to be more engaged, innovative and productive. As a result, the organization benefits from multiple marginal gains as well as major breakthroughs.

Such collaborative effort highlights the need for a new employment relationship built on mutual trust and the principal of win-win for the business and its employees. And it also means that a new approach to leadership and management is needed.

Agility requires leaders who are capable of multi-faceted thinking and learning agility; who can cope with ambiguity and complexity; who are genuine and can bring people with them on the continuous journey of change. And while agile leaders still have the challenge of keeping shareholders happy in the short-term, they must look longer-term, anticipate the major issues that could affect their organization, challenge shareholder primacy, use their influence to win support for building a more resilient and innovative organization that can create and sustain a new set of competitive advantages. They may also have to act as shield to enable greater experimentation and to protect their organization from the critics during the transition to something potentially more dynamically successful. This also presents business schools with the challenge of developing leaders who “get” the need for something different, when business schools have themselves helped to create the current orthodoxy.

Developing such agile leadership and shifting rigid mindsets is not easy. Some organizations are providing senior managers and leaders with opportunities to come together in variations on action learning groups, often involving peers from other sectors to consider common challenges. Others are setting up reflective spaces where leaders can come to terms with not having all the answers to complex, “wicked” problems. Coaching and mentoring can help, as long as they do not reinforce the “one-size-fits-all” solution approach. Benchmarking visits by groups of peer leaders to companies in other markets, to share issues and developments, are on the increase. So too is the participation of groups of CEOs in management, economic or psychology conferences where they can exchange notes on emerging ideas sparked by conference sessions. Increasingly leadership development is happening outside the conventional work boundaries and disciplines – it may involve leaders individually or collectively participating in community projects in different parts of the world.

While truly agile organizations are still in short supply, I believe the emerging orthodoxy of agility offers a potentially more adaptable, sustainable, ethical, equitable and resilient approach to doing business in today’s fast-changing context. And leaders who can “square the circle” will help redefine what success looks like in the 21st century. A worthy aim!

Professor Linda Holbeche is a developer, consultant, researcher and coach in the fields of leadership, strategy, HR development, change management and organization design and development. She is Adjunct Professor at Imperial College London and a Visiting Professor at City University’s Cass Business School, and a Fellow at Roffey Park. She is the author of two books for Kogan Page in 2015:
The Agile Organization, and – with Mee-Yan Cheung-Judge – Organization Development: A Practitioner's Guide for OD and HR 2nd Edition. 

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