Organizational agility represents an organization’s ability to swiftly pivot, adapt, and thrive when business challenges occur. One need only look at recent events to understand the critical necessity of flexibility in troubled times. However, even when outside events are less turbulent, businesses must maintain that ability to shift to meet more common challenges: changes in their customer base, changes in the competition, and changes in their industry’s environment, among other challenges.
In a McKinsey & Company article, one of the company’s principals, Wouter Aghina, described organizational agility as the ability to, “thrive on change and get stronger,” adding that through adopting agility, change “becomes a source of real competitive advantage.” In other words, instead of change being a disruptive factor, change gives an organization a competitive advantage.
The Power of the Pivot: How Organizational Agility Helps Companies Thrive
It’s easy to point to catastrophic events as an example of the need to become agile: an economic crash, a natural disaster, or other large-scale events are often where a company is truly put to the test. However, those are extreme examples that can rock even the strongest businesses, as the 2020 pandemic illustrated. Instead of the unexpected outlier events, let’s take a look at a more common challenge that poses a need for organizational agility: advancing to meet the demands of your customers and to stay current with rapidly changing technology.
During this time of change and uncertainty one thing became clear: the importance of otherwise everyday commodities. Toilet paper, hand sanitizer and bleach were so hard to come by, they all but became currency. While many businesses were forced to cease operations overnight, others were making preparations to shift their focus and priorities to adjust to a new reality. Alcohol distilleries began manufacturing hand sanitizer, auto manufacturers started producing medical equipment like ventilators, and many retail companies quickly ramped up a contact-less service model. Not every business is able to pivot quickly; those that have embraced an organizational-wide agile model find themselves far better equipped to handle these types of sweeping changes and implement relatively quickly.
These are extreme scenarios. But many companies undergo massive changes to their business without a force majeure-level driving event of widespread need. A culture of organizational agility is beneficial not only in times of crisis, but in these more ordinary situations as well.
Is Organization Agility Right for Every Company?
It might be tempting to think your organization doesn’t need to become a change-embracing powerhouse. Aghina notes that belief simply isn’t true, writing, “If you think that you’re still in a corner where this [agility] doesn’t hold true, wait for the disruption to come. Tomorrow it will be relevant for you.”
The key point is that your organization will find itself needing to adapt at some point, due to the challenge of a new and disruptive competitor, the introduction of new technology, or an unforeseen catastrophic event. Some of these shifts are major while others can be relatively minor.
How well your company survives the change will depend heavily on how well you have developed your organizational ability to adapt. This statement is not intended to be unsympathetic to the challenge that comes with shifting to a more agile business model — change is never easy. However, the difficulty of change doesn’t make it unnecessary.
When — and How — Should a Company Begin to Make the Shift?
Right now. And no, that is not an overreaction. Remember the saying, “The best time to plant a tree is 20 years ago. The next best time is now.” Likewise, the best time to begin making changes to your company’s organizational agility is the moment you realize you’re not as agile as you could be. Adapting mid-crisis is far more difficult than preparing ahead of time by taking measured, thoughtful steps to increase your flexibility.
This said, starting “right now” does not mean making a wholesale organizational change overnight. What it does mean is that you should begin by assessing your organization’s current levels of agility, by considering its strategies, functions, and operations. You can then uncover methods for advancing your agility in the immediate future, build a business case for becoming agile, and gain support from the necessary stakeholders to establish a plan for future change.
We write a lot about how PMOs use adaptive PPM solutions to facilitate organizational agility, but it all starts with the acknowledgment that change is beneficial, if not essential.
As Bill Gates put it, “Success today requires the agility and drive to constantly rethink, reinvigorate, react, and reinvent.”
Nothing is certain in today’s business environment. Every minute, technology is advancing, the economy is shifting, and the competitive space is growing. In order to stay strong and thrive through challenging times, companies must embrace organizational agility and learn how to turn change into a function of growth and success.