Agility doesn’t just happen, you have to work at it

A “black swan” event. A metaphor to describe a rare occurrence that comes as a surprise and profoundly impacts businesses and the stock market. In recent years, there’s been a number of them. COVID-19 and Russia’s invasion of Ukraine are two very stark examples. Both were unforeseen, have been highly disruptive and have sent shock waves through the global economy.

The need for agility

Nassim Nicholas Taleb, a finance professor, writer and former Wall Street trader, popularized the term black swan event in a book he wrote ahead of the 2008 financial crisis. He argued that because these events are impossible to predict, businesses simply can’t plan for them, regardless of what they say in hindsight.

And so business leaders today, in a bid to create the illusion of control, focus their attention on ‘agility’. They breathlessly espouse how agile their business needs to be to weather the storms head. Board meetings are dominated by the pursuit of agility, while management persistently encourages their teams to work in a more agile fashion.

Nevertheless, saying you want be agile isn’t the same thing as working hard to become agile.

From machine to organism

For a long time, organizations were seen as machines. Hierarchies, silos, processes and incredibly detailed specialisms were all factors in running a business in a mechanistic way. And those that embraced this approach did very well. Ford is a classic example and, as we all know, it went on to dominate the car market worldwide.

But it only works as long as external factors remain fairly constant and predictable. In the age of digital disruption, economic turbulence and political instability, the machine starts to grind and churn.

Now, the idea of a business as a machine is being replaced with the idea of a business as an organism. That’s to say, something natural and evolving that can quickly adapt to the conditions it’s presented with.

This more agile, organic organization places less emphasis on hierarchy and more on adaptability, accountability and action. But to run a business in this manner requires the right infrastructure and the right leadership.

Agility doesn’t have to mean chaos

Agility shouldn’t come at the expense of informed decision-making. It’s a trap leadership teams can fall into in an attempt to be more agile. As Edwards Deming famously said, “Without data, you’re just another person with an opinion.” Business leaders need data insight to make good decisions, regardless of agility.

But rather than taking time to analyze situations before deciding on strategy, we see leadership teams trying to create the illusion of agility by deploying several, sometimes conflicting, strategies based on instinct, speculation and theory. In today’s world, that is high risk.

Instead, organizations should be using processes and technology to enable actionable insight that leads to quick, effective decision making.

For me, there are three stages to achieve this:

Stage one: Get on the same page

An important characteristic of any agile organization is that its leaders use the same data to make decisions. Yet many businesses fall at the first hurdle using disparate datasets at different times. The result? Poorly-informed decisions and strategies that need reversing or repairing.

The first step to agility is getting everyone on the same page when it comes to data and insight. This means a single source of data, cleaning up that data and agreeing on terminology that everyone shares and understands.

It’s remarkable what action can be taken when organizations look at genuinely good information rather struggling with reams of obscure data and calculations prone to human error.

Stage two: See your workforce

Most organizations have their workforce loosely mapped out in an org chart or a spreadsheet somewhere in a folder. The provenance of data may be dubious and it most likely won’t tell you whether the right work is being done by the right people at the right cost.

Being able to see the workforce as a whole and being able to zoom into functions, departments and individuals is what’s needed. You need clean data that integrates all sources to give HR and Finance a shared, consolidated view.

This allows the business to build muscle by understanding relationship between people and skills to identify strengths and weaknesses.

Stage three: Test your strategy

It might sound counterintuitive to an agile culture to spend time testing. And yet it’s critical to achieving clarity when setting or reviewing strategy. Remember, agility is about informed decisions that lead to fast, confident action. Sometimes you have to slow down to speed up.

Understanding the potential impact of strategy by modeling different scenarios that test different workforce deployments allows leaders to capitalize on business strengths while enabling them to mitigate challenges and risks.

Reaching for a strategy in the dark and hoping for the best may feel efficient in the short term but too often it leads to delay and derailment in the long run.

An agile future

Following the above stages should help create the environment for agility to flourish. Leaders then need to embrace an agile mindset and have a relentless focus on informed decision-making and insight-driven action.

What’s clear is that you can’t simply proclaim your business to be agile. You have to work at it and create the right environment, and ensure that it’s predicated on accurate data. Obvious but true. And although business agility won’t help you anticipate the next black swan event, you’ll certainly be able to adapt faster and more effectively when it inevitably arrives.

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8 out of 10 businesses have committed to adopting an agile approach. Learn how they adapt their structure in response to disruptive business conditions using agile methodology.