If speed is the new currency of business, CIOs versed in Agile can add value by extending its benefits throughout the organization, writes Terry Bennett.
When we in the IT world hear the word “agile”, our minds quickly turn to software development methodology. We have seen from experience the value of changing much of our development away from a monolithic, rigid waterfall approach. We can cite the benefits of the ability to react more quickly to change, the delivery of business value on an incremental basis, and the improved satisfaction customers have with our products due to their day-to-day involvement. We have also seen greater morale and increased employee engagement among our development team members.
But a company cannot become agile simply by expanding the use of sprints, stand-up meetings, and burndown charts into every department.
I like this definition of enterprise agility by Korn Ferry: “a company's ability to outperform the competition and drive growth in new, ambiguous situations by learning and adapting when confronted with foreseen and unforeseen circumstances, dilemmas, crises, and complex problems.”
The extent of your company’s agility is determined by the degree to which you can change course, and the speed at which you can achieve this change. Marc Benioff, CEO of Salesforce.com, declared at Davos that “speed is the new currency of business.” But if your momentum prevents you from quickly changing direction, you may find yourself moving swiftly to the wrong destination. The increasing unpredictability of our world demands more and more agility.
Increasing agility does not mean introducing chaos into your environment. Just as a ballerina cannot unexpectedly change directions in mid-air, your company cannot pivot without a firm foundation. In fact, McKinsey’s 2015 Organization Health Index found that “truly agile organizations, paradoxically, learn to be both stable (resilient, reliable, and efficient) and dynamic (fast, nimble, and adaptive).”
Our challenge is to establish a foundation as firm and small as possible enabling quick changes in direction.
How, then, can a CIO help the organization improve enterprise agility?
- Ensure everyone knows the company’s bigger purpose.
Purpose establishes a “north star” to help navigate through the choppy waters of rapid change. Simon Sinek might call this your “why”. An EY study found “73% of executives agree that having a well-integrated purpose helps their companies navigate today’s turbulent environment.” Enhance your corporate intranet to continually promote your purpose in every action from strategy to daily decisions.
- Establish and communicate the end goal and set up accountability metrics.
Achieving the goal is what’s important – not how you get the job done. Agility values individuals and interactions over processes and tools, so eliminate the burdensome controls that throttle the abilities of those closest to the issue. Free your employees to use their creativity to achieve the established goals. Deploy dashboards to track all metrics and promote transparency.
- Obliterate bureaucratic decision-making that slows things down.
No longer can you afford the time to run decisions up and down the chain of command. Excess management is estimated to cost U.S. companies $3 trillion/year – that’s 17% of GDP! (HBR) Talk about a trust tax! Flatten the organization. Ensure your team understands the purpose, the goals, and the accountability metrics…then trust them to accomplish the goal. Promote internal social media to speed communication and improve transparency.
- Get your culture right.
Accelerating changes in business today are disrupting tried and true management behaviors. In fact, the CEO of Gallup declared, “The very practice of management no longer works.” No longer can you live with an employee base in which the vast majority are not engaged. You need more than their hands – you need their heads and their hearts. Build a culture based upon trust, empowerment, customer obsession, innovation, data-evidenced decisions, and taking educated risks. Embrace failure as a learning opportunity, and help each individual become his or her best. Use your internal social media to increase collaboration and connect silos. Enable crowdsourcing as a means of generating innovative ideas. Place analytics with internal and external-based customer data at everyone’s fingertips.
- Instill the ability to sense upcoming changes.
Obviously if you can predict future game-changing opportunities, you gain great advantage. Daniel Burrus has written extensively about how the “Anticipatory Organization™” can know what’s next, develop opportunities, shape the future, and accelerate success. Use your internal social network to engage the entire employee base in looking at hard trends versus soft trends and what they might mean to your company. Encourage staff to get involved in advising the startup community and to build networks outside your industry.
- Minimize fixed costs.
While both a ballerina and a battleship can change course, one would never think their agility is the same. Obviously, the amount of baggage your company carries will have an effect on how agile you can be. Agility can be increased by jettisoning everything that doesn’t bring direct value to your bottom line. This means companies must take a serious look at all their fixed costs and make some tough decisions.
Start thinking more like a startup. Embrace the Gig Economy instead of hiring so many full-time employees. Expand the use of As-a-Service models beyond the IT function. Consider partnering with other firms to provide non-core capabilities…or even spinning off various corporate operations (e.g. IT, accounting, marketing, HR) into their own businesses to offer services to other companies as well. As CIO, you can lead the way on this.
Our world today is very different than just a few short years ago. Change is accelerating rapidly; barriers to entry in many industries are lower than ever before; new competition can arise from anywhere across the globe – even from sources that did not exist just a short time ago. Customers are in control, and their expectations are mushrooming.
Incremental improvements are no longer sufficient. Ever-increasing speed and agility are the fuel for success. Time is of the essence, and you hold the keys in your hand. Start your engines!