Disruptive digital technologies like robotic process automation and artificial intelligence are rapidly growing in maturity. So the pace of digitisation is set to continue accelerating in almost every sector. According to market intelligence provider IDC, 50% of global GDP will be digitised as early as 2021.
To thrive in these market conditions, businesses need to develop business agility – the ability to continuously innovate, adapt, and optimise delivery of customer value. Creating the required shift in both mindset and operating models can seem like a mammoth task, so to help your organisation develop its business agility acumen, here are five critical principles that will help you take your organisation to the next level:
1. Start with purpose
Enabling people and teams to perform means giving them greater autonomy to deliver. Organisations need to develop laser focus on a ‘purpose’ to which everyone, with minimal guidance, can align their activity and priorities. To be truly inspiring and motivating, the ‘why’ needs to be something that people can deeply connect to, like becoming the “worlds most loved airline” (Southwest Air) or creating “a better every-day life for many people” (IKEA).
In the most responsive organisations, leaders are comfortable with setting clear and concise directions and trusting their teams to deliver. Indeed, research suggests that when teams and individuals have appropriate freedom to decide how to execute they are more motivated, deliver better outcomes, and are better able to respond to change.
2. Think in streams not structure
Rather than structuring around functional specialisms, consider organising around customer value streams and creating teams that minimise the number of hand-offs required to deliver customer value. The Spotify teaming model is a classic example of this with teams, known as squads, designed to incorporate all the skill types required to take an idea from concept to cash.
Visually tracking the customer value generation process, using tools such as ‘kanban’ visual management boards, can be particularly powerful. Often these stop at the team boundary, however they can be especially valuable across the whole value stream when multiple teams are involved. Pairing this with the opportunity for people involved in the process to continuously review and improve can be truly transformational.
3. Don’t use fear, use foresight
Many leaders rely on evoking a ‘burning platform’ to create change. For example, in a now infamous memo to the whole of Nokia, CEO Steven Elop predicted (correctly as it turned out) the company’s demise as industry-leader. But the compelling message did little to change the company’s fortunes.
Study after study has shown that motivating simply with fear also shuts down learning, collaboration, creativity, and strategic thinking. Fear causes our brain to activate the fight-or-flight system overriding our more complex functions that enable us to think more broadly, consider new opportunities, and make connections with others.
The burning platform approach also makes us look backwards at problems, rather than forward. In today’s complex and rapidly transforming business environment there may be limited gains from solving yesterday’s problems and over-analysing your weaknesses. Instead creating a compelling vision, experimenting and playing to your strengths can be a smarter, more emotionally intelligent way to quickly enable your team to pull together and start delivering.
4. Re-imagine your KPIs
KPIs and targets need to demonstrably contribute to how a given team is adding meaningful value to the customer or organisation. Too often, KPIs focus purely on process outcomes, such as call centre handling times or website traffic, and miss the link to the bigger picture.
A great example of how to get targets to work really well is what Google calls Objectives and Key Results (OKRs). These are strategically relevant stretch goals set at all levels including those of the individual and team. The OKR approach means teams have measurable goals linked directly to achieving the organisation’s goals.
5. Start small. But plant many seeds.
Because organisations are made up of numerous interrelated systems, they often have a built in inertia that can seem hard to overcome. To quickly scale your transformation, create small changes that can be made immediately and then built upon, rather than only focusing on one big, ambitious initiative.
An open-invitation event, such as a ‘Lean Coffee’ or ‘Open Space’ event, can be a great way to spark a change. Participants gather to generate ideas for initiating the transformation in their area, come away with enthusiasm and ideas for starting the change, and subsequently report back on their progress and share their learnings.
Creating a truly agile business requires a new mindset that can be challenging, but the rewards — in terms of speed to value, innovation, and employee engagement — are immense. Indeed, the ability of your organisation to thrive in the disruptive times ahead may well depend upon it.