10May 21

Agile Organisations and a VUCA World

Agile Organisations and a VUCA World

The past year has seen some challenging times for most organisations. The pandemic brought with it huge uncertainty, endless lockdowns and social distancing measures to name a few. Organisations entered survival mode as they orchestrated work from home policies, strategies to stay competitive and figured out what was both beneficial to the company and could be quickly adapted.

McKinsey (2020) stated in an article, written at the height of the pandemic, that many companies adopted agile practices to cope with the changing business priorities. They concluded that companies with agile practices embedded in their operating models have managed the impact of the COVID-19 crisis better than their peers.

So, what is an agile organisation and what makes them adapt and cope with VUCA (Volatile, Uncertain, Complex, Ambiguous) conditions compared to more traditional organisations? 

McKinsey defined an agile organisation as “a network of teams within a people-centred culture that operates in rapid learning and fast decision cycles which are enabled by technology, and that is guided by a powerful common purpose to co-create value for all stakeholders” (McKinsey, pg. 3, 2018).

 

Agile vs. Traditional Organisations

 

By their nature, agile organisations are designed to be fast, resilient, and adaptable (McKinsey, 2020) . There is an element of fluidity about agile organisations that make them adapt compared to traditional organisations.

 

Characteristics of a Traditional and an Agile Organisation

 

Imran Agile Blog

Stoppelenburg (2018)

 

Lessons from the Pandemic

 

In reference to the above McKinsey (2020) article, executives and agile leaders were asked which elements and agile practices helped them cope with the shock. Their responses fell into two categories 1. Team Level (Agile Teams) and 2. Enterprise Level (Agile Leadership).

Agile Teams

Agile organisations are made up of teams as well as a network of teams. They are self-organising, where the purpose and objectives of the teams are clear to every team member (Stoppelenburg, 2018). McKinsey (2020) stated in their article that the team structure allowed the organisations questioned to tackle the challenges that were being faced. Teams were able to mobilise those with the necessary skills around a task and keep work moving to schedule. This practice wasn't only implemented by mature agile organisations , rather non-agile organisations  also called upon such practices in reaction to the crisis (McKinsey, 2020).

Agile Leadership

Another element, which proved vital during the crisis, was from the enterprise level. Executives and agile leaders were together empowering cross functional teams at every level to cope with the shock brought about by the pandemic (McKinsey, 2020). As practice, it is vital that leaders within an agile organisation create conditions in which employees can do the work well, can take initiative and deliver excellent performance. According to Stoppelenburg (2018), an agile leader is a servant leader that possesses the following capabilities that make the difference:

  • Have a deep self-awareness;
  • Show compassion;
  • Make emotional connections;
  • Collaborate on the basis of empowerment;
  • Give purpose and direction;
  • Connect different systems;
  • Be socially engaged.

 

Summary

 

Agile organisations are perfectly suited to deal with and create competitive advantage in volatile, uncertain, complex, and ambiguous (VUCA) conditions. As seen in Mckinsey’s (2020) article, organisations with agile practices embedded were able to navigate from the complexities of the previous year and were able to continue - ‘business as usual’.

It would be senseless to think organisations have not learned lessons from the past year and would not (to some degree) be considering embedding agile practices into their operational model. Having said that, change is not easy and a major hinderance is the mindset.

As Architects of Change, we specialise in behavioural and cultural transformation. We have been delivering Agile Mind / Growth Mindset sessions to organisations across the spectrum, thus we know some of the challenges faced in adopting agile mindsets. Even so, we also know it is possible and therefore invite organisations to prepare for any future challenges.   

 

References

McKinsey (2018), The five trademarks of agile organizations, https://www.mckinsey.com/business-functions/organization/our-insights/the-five-trademarks-of-agile-organizations

McKinsey (2020), An operating model for the next normal: Lessons from agile organizations in the crisis, Organization Practice https://www.mckinsey.com/business-functions/organization/our-insights/an-operating-model-for-the-next-normal-lessons-from-agile-organizations-in-the-crisis

Stoppelenburg (2018), The Essence of an Agile Organization, House of Transformation Publishers, Great Britain

 

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