Does Size Matter When It Comes to Organizational Agility?
- 81% of organizations believe that agility is the key to success… but about half of agile transformation endeavors fail
- Large organizations are weighed down by legacy structures and practices that impede them in their journey towards agility
- Established corporations can achieve organizational agility, so long as they approach it as a mindset rather than a process
“Agile is the new black” could be the motto of our time. Agile methods and agility as a broader management concept are on everyone’s mind and lips, and virtually every business worldwide is eyeing “Agile Transformation” (a transformation journey aiming to increase the organization’s ability to adapt to change).
However, only half the organizations that try to switch to more agile ways of management and working succeed in their endeavors. The ranks of losers include sizable and reputable companies with a track-record of solid leadership.
What if big businesses were just not designed for agility?
Why Everyone Wants to Go Agile
The concept of agility has become hard to ignore. The push to “embrace agile” has become ubiquitous in business spheres and beyond. To try and figure out the rationale behind this new obsession, let’s try to define what we mean by “agile”.
It all started in the realm of software development back in 2001, when a group of computer engineers came up with a new delivery method involving a lightweight approach to product development and project management: the Agile framework.
The method, which advocates building products incrementally, has provided businesses with a speedier, more efficient way to manage projects and products in volatile business conditions. So much so that Agile has gained huge traction, both within the field of software development and beyond.
As a matter of fact, the growing popularity of the Agile software delivery framework has led to the emergence of a related management concept: organizational agility, which can be defined as “the ability of an organization to renew itself, adapt, change quickly, and succeed in a rapidly changing, ambiguous, turbulent environment.”
Today’s organizations are definitely acknowledging the potential value of organizational agility: according to a Forbes Insights report for the Scrum Alliance, 81% see it as the key to organizational success. For good reasons: those organizations that successfully embrace agility are reporting faster time to market (60%), faster innovation (59%), improved non-financial results (58%), and improved employee morale (57%).
Hence the whole craze around Agile and agility. But then, one can wonder: how come all organizations haven’t gone agile yet?
The Barriers to Agility
Although thousands of businesses worldwide report getting huge benefits from their switch to agile management, the fact is that about half of agile transformation endeavors fail.
Among the most widespread impediments to agility are organizational patterns. Transitioning the operations and activities of a whole firm requires significant adjustments enterprise-wide: descaling work to create small, empowered teams across functions, removing hierarchies to foster a conducive work environment, etc.
Other obstacles include human and cultural barriers. Agility as a management concept isn’t always fully understood and appreciated by general managers and executive decision-makers, who’d sometimes rather stick with more conventional leadership styles. 36% of executives from large companies actually consider agility to be a buzzword.
At the other end of the spectrum are long-time employees, who are among the most vocal detractors of transitions to agile, according to the Forbes Insights-Scrum Alliance report. Accordingly, successfully embracing agility doesn’t only require overhauling management structures and processes, but also engaging in change management effort.
Can Everyone Be Agile?
Considering both the extent and the nature of the challenges, smaller companies appear to be better candidates for agile ways of working. In fact, our collective unconscious typically associates agility with an entrepreneurial mindset and with smaller scale structures.
This makes sense: Established companies have a legacy. Top-down managerial hierarchies, processes, control mechanisms, time-tested best practices and habits tend to weigh them down.
The failure of business behemoths such as GE in their attempts to switch to more agile ways of working only confirmed this perception.
Does this mean that big corporations are simply not a match for agile management styles? The facts say otherwise. Walmart, Verizon, eBay are just a few of the large firms that have successfully transitioned to Agile methods and organizational agility over the past years. Other success stories include those of Dutch banking group ING and music streaming company Spotify.
Then, what are the criteria and prerequisites to achieving organizational agility, especially for established corporations?
Lessons learnt from big businesses’ failed journeys to agility may help us to answer this.
Those non-successes are usually due to narrow-minded approaches to what it means to be agile (e.g. religiously implementing Agile development best practices without encouraging proactive thinking and adaptability, driving and implementing transformations in a purely top-down manner, with insufficient stakeholder consultation and involvement).
All too often, agility is confused with the Agile framework — which is nothing more than a product development methodology, while what really matters is the organization’s ability to adapt to changes faster.
What if the best way to empower corporations to embrace agility was to clarify the semantic distinction between agile and Agile?