Agile Organizations and Leaders

  • 27.7.2021

Agile organizations are one of the hottest topics in today’s business life. What actions are needed to perform agile transformation and reach a sustainable agile organization and where does leadership stand within this concept?

Agility

Agility means to handle uncertainties, which are so present in business life. Technological advancements, globalization, fast-changing consumer needs and demands are just a few of them. Organizations continuously come face to face with different possibilities, different constraints and different competitors. Thus, they need to be agile in order to achieve sustainable performance within this change.

Agility includes many familiar concepts like teamwork, continuous learning and development. Yet, the organizations’ utilization of this methodology systematically and continuously, its internalization of underlying mindset and inclusion of it within the corporate culture creates much more preferable business results when compared to an organization where the professionals work individually and perform certain aspects of agility without continuity and in many cases not to the full extent. In other words, agility is not groundbreaking in terms of its methods but in terms of the business results achieved when utilized to the full extent.

Based on a study by McKinsey & Company, agile organizations are able to develop products 5 times faster, take decisions 3 times quicker and allocate their resources in a much faster and effective way. Therefore, it is quite clear that going through such an agile transformation brings together considerable improvements in organizations’ business results and cost structures.

How can organizations manage agile transformation?

Each transformation journey is unique on its own, based on the organization’s current position and needs, yet there are systematic approaches and models for transforming the organizations into an agile structure. “Scrum” is probably one of the most heard-of. Apart from that, there are various methodologies in the literature, both for engineering-based processes or for organizational management processes. The common point of all of them are “PEOPLE '' as in agile organizations both the employees and the customers are at the core.

Basic factors: Customers and Employees

Agile organizations have to be customer centric. Therefore, they keep the customers at the focus while developing their products and services. It is of utmost importance to understand the customer needs and to figure out how best to satisfy them. In this way, the customer demands would be answered quickly and the time to market the products / services would be shortened. So, the customers would be satisfied and become continuous purchasers.

The employees are what distinguish the agile organizations from others. An organization is formed of the people working for it. The harder and the more efficient the employees work, the more successful the business results of the organization become. Therefore, loyalty to the organization, the internal motivation to create something for the organization and the pursuit of novelties would definitely reflect positively on the organizations’ performances.

The transformation where people are kept at the core creates both a sustainable business model and a higher customer retention rate.

Agility and Learning Organizations

Continuous learning and development are quite common agile mottos. As Peter Senge from MIT mentioned, “The only sustainable competitive advantage is an organization’s ability to learn faster than its competitors.” Today, it is impossible for organizations to survive in the long run if they cannot keep up with the pace of change and learn new things.

Agile Teams and Project-Based Business Models

There are differing parts of agile approaches in the literature. Yet, teamwork is another common ground as with keeping people at the core. In agile organizations, there are self-performing teams that create end-to-end solutions for the business problems they are tasked with, that are responsible and capable of planning effectively. Team members learn from each other and try new ideas.

Instead of bulky deliverables, the projects are divided into small parts that are easy to manage and the team solely focuses on one part at a time and builds up the project like a lego, one piece at a time. As a requirement of customer centricity, the teams continuously receive feedback and realize any need to change focus at an early stage and act on it. Thus, if a change is needed in a project, it is done as early as possible rather than at the end. This of course prevents the waste of precious and limited organizational resources like time and money.

In addition, this approach – with the advantage of quick interventions in case something needs to be corrected or improved – supports employees in trying out new ideas without the fear of failure. As a result, the organizations can beat the competition in marketing innovative solutions to their customers.

Agile Culture and Agile Organizations

In order for all these systematic and structural changes to actually work and create positive business results, the organizational mindset should become agile because unless supported by an agile culture, only converting the workflows into an agile way would not lead to permanent improvements. The end game is not to become agile but to have a sustainable organization. The organizational behavior literature is full of examples where the changes that are not backed with cultural shifts become obsolete within 1 year. The agile transformation should be supported with the cultural change, and the environment should be suitable for agile teams to perform.

A key factor in such a cultural transformation is a work environment that encourages people to try creative ideas because no matter how much you claim to have an agile organization, if the team is afraid to try the untried, they will always go with mediocre solutions. Sadly, this means mediocre results for the organization. Similarly, if the team does not perform harmoniously and insist on individual results, the business results will be shy of the best.

Agile Leadership

The value of agile leaders become clearer at this point. At its simplest form, an agile leader is a person who creates an organization which can handle uncertainties, continuously learn and develop and where employees try new ideas without the fear of failures and mistakes and grow together.

A close supervision is one of the biggest enemies of agile culture. Thus, leaders who get rid of micro-management and focus on business results are musts for agile organizations.

Agile leaders create a work environment for their teams to work comfortably. People would be reluctant to voice ground-breaking creative ideas if they feel like being watched over their shoulders continuously.

Another grave danger to agility is absent leaders. Yes, self-managing teams are the essence of agility and they move towards their targets in the light of the feedback they receive. Yet, if they cannot find their leaders when they encounter certain obstacles or need a high-level vision, their deliverables would be less than perfect.

One of the easiest and fastest ways to create cultural change is to set an example. Agile leaders would end up with a much faster and concrete transformation if they act as role models to their teams with their day-to-day behaviors and decisions.

One-man shows in business life are no more beneficial for obtaining sustainable results in the long term. Agile leaders may not miraculously impact the whole organization on becoming agile at once, but they can impact their leadership teams working closely with them and convert them into agility ambassadors in their organizations. So, step-by-step, each professional would become agile and start practicing agile methodologies in their business life. In the end, agility creates a win-win relation between the organizations and their employees: “Growing employees = Growing organizations.”

What agile organizations or organizations wishing to become agile need are, leaders who manage with coaching, who empower their teams to grow and develop and who support their teams in reaching their targets. Ageo International supports the development of such leader profiles with its Leadership Development products.

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