One of the new popular corporate and organizational catchwords going around these days is the “agile organization”. While on one hand, it is healthy to take these things with a grain of salt, the agile organization is proving to have immense potential, and successful organizations that have adopted the methodology behind it seem the best poised to propel themselves into the future.
From a scoffed-at neologism just a few years ago, the concept of the agile organization has risen from relative obscurity to become the means through which many successful brands and organizations manage their operations and maintain their competitiveness in a constantly evolving and changing marketplace. Some well-known companies that use this methodology (naturally customized and tweaked to fit their needs and culture, of course) are Apple, Philips and ING Bank. The success of these companies are a testament to how effective the methodology is when adapted and used correctly.
>> Recommended reading: Using Agile Methodology to Improve Business Management
What is an “agile organization,” anyway?
MBASkool.com defines an agile organization as the following: “An Agile Organization is one that is quick in responding to changes in the marketplace or environment. The ‘agile organization’ is also known as ‘the entrepreneurial organization’ and ‘the resilient organization’ and this kind of organization focuses on the customer which calls for customized rather than standardized offerings. A highly agile organization reacts successfully to the emergence of new competitors, rapid advancements in technology and sudden shifts in overall market conditions. Agile enterprises thrive in non-hierarchical organizations without a single point of control.”
Okay, let’s unpack that. An agile organization is one that doesn’t operate the traditional way. For one, while there is an organizational hierarchy, it isn’t as top-down as a traditional organization — where in a traditional organization hierarchy, the lower you are in the organization, the less voice you have, in an agile organization, everyone’s input is more valued. There’s also more of a focus on the customer, where the organization puts more priority on understanding its market and its customer base, and responding to current customer needs, tastes, and feedback.
Also, in an agile organization, employees are better utilized, allowing them to work on tasks that maximizes their skills and expertise. This results not only in more committed, passionate and motivated employees, but also in a boost to productivity and quality. Many agile organizations also utilize teamwork and collaboration more, and are less “territorial” and departmentalized, as opposed to the prevailing culture in many traditional organizations where there is little to no collaboration between departments or business units. Even the rewards / incentives system of an agile organization is different — gone are the “performance evaluations” that are usually politicized. Instead, the quality of the output is king, as well as one’s standing with both superiors and peers (and subordinates, for supervisors and managers).
The kind of mindset and culture of the agile organization is what allows it to “react successfully to the emergence of new competitors, rapid advancements in technology and sudden shifts in overall market conditions.” Since the organization is more dynamic and adaptable, it can respond faster to any challenges it faces. The nature of the agile organization also lends to less red tape and less bureaucratic hurdles, making things more efficient, organized, and cost-effective.
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Why the agile organization is better
An article by McKinsey describes the agile organization as both “stable and dynamic” in the sense that the methodology generally keeps the backbone and basic principles of organization to keep it stable, which in turn serves as the foundation for more dynamic elements to be introduced. It’s basically the best of both worlds. There’s the analogy of agile organizations being like living things, in sense that humans, for example, are able to think on their feet and make decisions on the fly. This nimbleness and ability to make quick but effective decisions is part of the goal of every agile organization.
Agile organizations are also better in the sense that they’re leaner. Meaning they operate efficiently. There’re less redundancy, less mistakes, less cost. This kind of value can also translate into a better product or service that’s delivered to customers, potentially creating more brand advocates, increasing brand loyalty, and enlarging the customer and market footprint of a brand.
Even employees that work for an agile organization benefit, since they tend to find more meaning in the work they do, since their opinions and feedback is more valued, and they are given more opportunities to learn, grow, and maximize (and even expand) their skill sets. Many agile organizations also allow for a better work-life balance for employees — both because of its nature and because of company initiatives — leading to better talent retention and recruitment. Employees who also have a good work-life balance also tend to be more motivated and deliver high quality output, since they’re given many opportunities to recharge, preventing them from experiencing burnout.
We’ve also mentioned the flexibility of agile organizations, a key benefit to adopting this kind of organizational methodology. Given the high level of competition and the constantly changing market, companies need to be empowered to make changes in its direction and strategy as quickly and as effectively as possible. The nature of the agile organization allows this. Thus, companies with an agile organization have a better chance of tapping into new opportunities afforded by these market changes, keeping the brand / company up-to-date and relevant.
Customers are also generally happier by extension due to an agile organizational methodology. Look at Apple, for example. Even in the highly competitive technology industry, Apple has carved out a large chunk of the market for itself, due to its loyal fans and customers. Its constant innovation, exemplary customer service, and understanding of what customers want and need have kept profits up even in the face of a growing number of new players in the industry. In short, the high quality output (expressed through products and / or services) that results from agile operations keep customers engaged, and increases the positive reputation of the brand, which in turn attracts even more customers.
>> Recommended reading: How Lean Methodology Could Help Your Business Succeed
Five building blocks of an agile organization
1. More focus on customer satisfaction
For one, an agile organization is more customer-oriented. While the goal of the business is still to generate as much revenue as possible, the means used to achieve this goal is drastically different. Agile organizations recognize that in this day and age, customers are more powerful, more informed, and less inclined to take everything at face value. Thus, agile organizations seek to be more in touch with customer needs and customer attitudes, which in turn attract more customers and more profit.
Jack Ma of e-commerce giant Alibaba, for example, is known for his stand where customers are the priority. Shareholder returns take a backseat in Ma’s business philosophy; he believes that focusing on the customer naturally leads to an increase in profit. With its 2014 $25 billion initial public offering (IPO) (reported by Forbes here) seen as one of the biggest in the world, Ma’s agile organizational leanings are proof of the effectivity of his philosophy.
2. Change in mindset in the roles of management
Management in an agile organization is one of guidance rather than oversight. Sure, the oversight element is still there, but management takes a more active role in enabling other members of the organization to do their jobs better. Gone are the days where employees complain of bosses who “don’t know anything.” In an agile organization, managers need to be skilled and experienced, as their expertise is critical in guiding teams to achieving their goals. The whole set up is more collaborative and is more conducive to mutual learning, allowing for better productivity, morale, and organizational and individual growth.
3. Less formal, more collegial structure
A lot of people confuse formality with professionalism — they couldn’t be more wrong. Agile organizations maintain a high level of professionalism while being more informal at the same time. For example, there’s more back-and-forth between people who work together, regardless of their rank in the organization. Even rank-and-file employees are free to voice their disagreement with a certain idea or initiative, and are allowed to suggest ways to make things better, as opposed to the traditional model of organization where orders from the top should be followed without question.
4. More transparent, more harmonious culture
There’s generally less office politics in an agile organization. Why? Because of its nature of collaboration, everything is much more transparent. Everyone knows how everyone else is working. This allows for the continuous improvement of the organization, since any flaws or shortcomings of the current system will be found sooner or later.
5. Equipping the right tools for the job
The nature of the agile organization being less bureaucratic also means that the organization is more empowered to utilize the best tools for the job, instead of relying on traditional supplier programs. Managers and leaders in an agile organization are more well-equipped to recognize already available tools to help everyone do their job better and more efficiently. One of these tools is Runrun.it’s Smart Time Tracking system, which goes well beyond the traditional timekeeping tool. It allows for better time management and time tracking, capable of providing data on things like how much time is being spent on a particular task, or how much time on average a certain kind of project takes.
Used in tandem with Dashboard, which provides even more access to all sorts of operational data in real-time, managers and leaders are empowered to make more informed strategic decisions for their organizations and teams, prevent possible mistakes in the future, and know where and when to step in to make improvements. To see how Runrun.it’s suite of innovative tools can help your workplace and operations become more agile, check the free trial here.