In an increasingly volatile business arena, agility is key to competitive advantage.
It is no surprise that volatility is the new normal. Fast-paced changes, new forms of competition, macro-economic uncertainties, and technology-enabled disruptions are making the terrain more complex and uncertain. This is creating unprecedented challenges as well as providing new opportunities for organisations.
As individuals and as an organisation, how should we become more dynamic and flexible? How should we better sense changes in our environment? How should we respond more nimbly with more focused and faster actions? How should we adapt? How should we develop the ability to handle any curve ball thrown our way? How should we innovate more rapidly? How should we thrive on change?
In short, how should we become more agile? And as leaders, how can we foster greater organisational agility?
So, what is agility?
McKinsey principal, Wouter Aghina, offers a great explanation in the article, The keys to organizational agility:
“Consider things that are fragile. What’s fragile? Fragile is a crystal glass. When we put stress on it, when we exert force on it, it gets weaker or even breaks. So, what’s the opposite of fragile? We immediately think of words like resilient, strong, robust, maybe even flexible, so that it bends and it gets back to the original condition. But is that really the opposite? Something that stays the same? The opposite of fragile is something that gets stronger when I exert force or stress on it. In today’s environment—with enormous changes coming from both inside and outside of the organization—that’s what we think the aspiration should be. That’s what I call agility: when you thrive on change and get stronger and it becomes a source of real competitive advantage.”
Agility and stability
Here’s something that is interesting. McKinsey principal, Aaron De Smet, in the same article, points out that contrary to popular understanding, agility is not incompatible with stability. If anything, he underlines that for most companies, agility requires stability. How is that so?
“Agility needs two things. One is a dynamic capability, the ability to move fast-speed, nimbleness, responsiveness. And agility requires stability, a stable foundation-a platform, if you will-of things that don’t change.”
This power of ‘and’ is something that many other strategists have also spoken of. Agility isn’t about wiping the slate clean. We can’t simply discount the more traditional systems and processes that have made us successful. There is very much still a place for them, and an important one at that too. What we need to do is to build more agile systems alongside them, to complement them. As Wouter Aghina, Aaron De Smet, and Kirsten Weerda point out in the McKinsey Quarterly article, Agility: It rhymes with stability:
“In our experience, truly agile organizations, paradoxically, learn to be both stable (resilient, reliable, and efficient) and dynamic (fast, nimble, and adaptive). To master this paradox, companies must design structures, governance arrangements, and processes with a relatively unchanging set of core elements-a fixed backbone. At the same time, they must also create looser, more dynamic elements that can be adapted quickly to new challenges and opportunities.”
The example they use is of a smartphone. The fixed hardware platform of the phone is like the stable backbone of an organisation. At Godrej, we identify this as the ‘great, good things’ that have made us successful through the last 120 years – like our values, the trust if our consumers, our commitment to quality. And at the same time, on the same phone, you have the capability to add, delete, edit, update new apps as and when they are made available. This app capability is like the agile, dynamic parallel system that we need to evolve.
Interestingly, what stalls agility are internal barriers. Many companies report that what slows them down is unclear decision making, organisational silos, inter-departmental rivalries and a general risk-averse culture.
So, how can we become more agile as a company? Here are some suggestions:
1. Experiment and learn
We have to experiment more, take calculated risks and be okay with making some mistakes. That’s the only way we will be able to innovate faster and better and delight our consumers. The reality is that truly innovative solutions usually can’t be fully overseen or planned – some false starts, messiness, dead ends and detours are inevitable. There is an inherent trial and error approach that we need to build in. And to become more experimental, one of the things that we need to counter is how loss averse (how our fear of losing is more than the joy of winning) we are and its impact on the trade-offs we are making.
With our R&D team members, we require that they dedicate significant effort on longer term initiatives. We need to encourage and give more space to our team members in other functions as well to try out new things.
2. Read the signs
There’s change happening all around us and we just have to become much more aware of what it is and where it is happening. Like someone pointed out recently, our traditional notions of competition have transformed. You don’t have competition in identified industry silos anymore. These are all shadow lines and it could come at us from pretty much anywhere. So, to start with, we need to become much more outward looking, instead of remaining insular. The more familiar we become with the industries, communities, countries, people and larger ecosystems around us, the more likely we are to understand and become part of the changes taking place, rather than fighting them or being passive recipients. So, at an individual level, ask yourself how much time you’re spending just immersing in what’s happening in your area of expertise outside of Ndiema. And commit to seriously ramping this up. When you get a chance, do read Tom Dawes’ recent post on fuelling creativity for some great suggestions
Of course, looking out for and identifying the signs is the first step. We need then to be able to decipher them, assess the impact on our businesses, products and people, and adapt in step with them. Uncertainties need not be entirely unsettling; they can also hold tremendous opportunities if we navigate them sensibly.
3. Use data, wisely
We are inundated with data. If we can harness the data wisely and channel it into relevant insights, it can be very powerful. We have so many different tools available at our finger tips. At an organisation level, through Project Ajna, we are making a significant commitment in our India business to deepen our analytics capability. The key though is to leverage the right kind of data and analysis that will enable us to make higher quality, more objective decisions. Business leader Erik Larson puts it well:
“Information required for complex decisions is often distributed across siloed departments and individuals who are playing politics with each other. Because the business world is fast moving and ambiguous, data-driven business teams are flooded with complex information and conflicting insights. As a result, decision makers often resort to cherry-picking and oversimplification in their quest for decisiveness.
To get relevant and reliable information quickly without backlash, flip the discussion on its head. Don’t ask what people know. Ask what they don’t know, and whether that missing information is important. Then go get it if you can. If not, make note of it as a risk and fill in the blanks or change course as the decision plays out. Doing this not only keeps the focus on “good enough,” but also increases buy in across the team by surfacing and addressing their concerns.”
4. Foster a culture of many
Unlike some other projects, this isn’t about forming a core team of mavericks on agility. That just can’t work. We also can’t really make choices about where we are willing to be agile and not. We have to become much more agile as a culture and a company and that means that each one of us has to become more agile in our approach. This means that we need to start wiring this into the processes we create, the people we hire and how we measure success. We need to combat silos and encourage more collaboration. We need to create more cross-functional teams and discourage team from hoarding information. We need to make our teams more diverse and inclusive. That’s the only way we can be successful.
5. Faster decisions, more empowerment
Some of our traditional, multi-layered decision-making processes have to change. We need to simplify some of our processes to reduce the time it takes for us to make key decisions. We also need to delegate more and encourage people to be more 100/0 (take 100% accountability and 0 excuses). Let’s empower our team members and give them more autonomy.
Core to becoming more agile is optimising the way we operate. We need to challenge ourselves to simplify the way we work. We need to take a more honest look at our decision bottlenecks and find ways to act quicker.
For us at Ndiema, becoming more agile is critical. We typically move quite quickly, even in the face of uncertainties. And as a culture, we have a strong sense of ownership and bias for action. That is why, being agile is a key part of The Ndiema Way (expressed in our “Be Bold” values statement).
As we get larger and more global, scale can provide us with tremendous benefits. At the same time, we need to make sure that we don’t become rigid or bureaucratic. The key is to unleash the entrepreneurial potential of our multi-local model and become more innovative and nimble – while ensuring that we have a consistent direction, embrace The Ndiema Way and drive value-added synergies across our company.
As always, I look forward to your thoughts.