Monday, April 28, 2008

How agile is your company?

We live in times that simultaneously present great opportunities and tremendous challenges as well. Companies need to do multiple things and follow different strategies to stay ahead in this complex environment. Today, one particular strategy that is gaining increasing credence in the corporate world is that of “agility”.

A study conducted by Booz Allen Hamilton amongst CEOs threw up an interesting fact: CEOs had identified “improving corporate agility” as their most important goal, next to topline revenue growth. This made me wonder. Yes, it does seem important and even allows companies who claim competence in this discipline to actually stand out from their competition.

But are companies actually practising what they preach? I know for a fact that my company is not as agile as some of our competitors or even half as agile as it ought to be. That leads me to a question that seems easier to ask than to actually answer. “How agile is your company?” More critically, “Is agility up there on your agenda so that it gets the sort of senior management attention and energy that it so patently deserves.”
What makes for agility?
“It is no longer enough to respond to change; today, organisations must lead change or be left behind,” says leadership expert Pollyanna Pixton. Today, there is growing interest in change and change becomes extremely relevant in the context of agility because being agile means being proficient at change. Agility allows an organisation to do anything it wants to or has to do to remain agile.

An agile enterprise is basically a change proficient organisation. So here is another thought that crosses my mind. Does your organisation talk more about change or is it at the forefront of creating change? Or is it, like most corporations, merely responding to change? Sometimes questions can be uncomfortable, but the smarter organisations address them sooner rather than later.
Innovation at the heart of agility
Innovation is another attribute that companies seem to aspire for. Though innovation seems to be part of the mission statement of most companies, it seems to be revered more in rhetoric than in actual practice. While a few companies like Apple seem to have innovation in their DNA, many others still seem to be coming to terms with the concept or the process to make it an integral part of their thinking and functioning.

Let’s study innovation in a little more detail. Where is it generally found? Innovation is most often found in product design and an innovative product that readily comes to mind is the iPod.

In the Indian context one remembers the Titan Edge, which was the slimmest watch in the world, truly elegant and breakthrough. India too can claim credit for the “single serve” packaging revolution that the sachet brought to Indian consumers and the contribution of brands like Chik to bringing this product to what C. K. Prahalad, the eminent management professor, called the “bottom of the pyramid”.

Innovations could also be in the strategy that companies devise and Titan’s revolutionising of the concept of gifting watches was an innovative strategy that made and continues to make a difference to the brand’s fortunes. Other smart companies innovate in their processes and that helps them gain leadership. Infosys has made the global delivery system a differentiator, while other companies and brands have innovatively positioned themselves to stand out from their competitors. Often , agile companies can discover and lead a paradigm shift and move to a different level of opportunity as the early movers in the Internet space demonstrated. So what is innovative about your company?
How can your organisation be agile?
Let’s take a look at some agile organisations and see what makes them tick or what other aspiring corporations can do to climb onto the agility bandwagon. While enterprises have executives and managers at varying levels, who contribute to the company’s progress, the agile ones have a tremendous amount of healthy debate on critical issues that impact the company and its business.

In case you want your company to be agile, it might not be a bad idea to heighten the quantity and quality of debates within the company. But before that, run a quick reality check on the company culture. Is it conducive to debate? Do people have the freedom to disagree with ideas? Is there a culture of disagreeing without being disagreeable?

It is critical that organisations provide their employees time for learning and self-development. Often enough, many companies have a board of directors who take their functional responsibility more seriously than their role as part of a senior management team that guides and directs the destiny of the company. It is important for directors to play a larger role that cuts across functional specialisations.

Smarter companies also back multiple ideas, much the way a punter would go to a strange race course and back a few horses as he might not know which one will get him the jackpot. Agile companies make more decisions and quickly move from an authoritarian to a collaborative style of management that serves today’s needs better. Technology companies, given the nature of their business and environment, seem to have applied more thought to agility and use methods like extreme programming and Scrum which seem to work for them. It is, perhaps, worthwhile to remember that agility need not be the domain of technology companies only and every company must consider it as a strategic differentiator.
Customer focus the key
Business usually revolves around the customer. Companies need to constantly scan the environment to sense and define meaningful changes in the environment and gear themselves up to respond to these changes so that they can serve their customer needs better. It seems obvious that customer needs are changing frequently and on occasion dramatically, if not unreasonably. It seems obvious that the smart companies will deliver to their customers whilst the more agile companies will deliver it quicker, better and perhaps more cost-effectively. So how well are you monitoring customer needs? And how geared is your organisation to meet their changed needs? Introspection seems to be the need of the hour.The way forward
Running companies is not easy. Often enough, the urgent seems to take precedence over the important. Agility is something that has to be urgently put on the agenda of companies if they have to stay ahead. As the adage goes, “In the future, there will be only two types of companies; those that are quick and those that are dead.”

I am sure we would all much rather live and thrive than be dead. While it is all very nice to want to be agile, it is more critical for companies to have a process in place to improve their agility. Intent is only half the battle, the other half is the discipline of a process that will get you there.

Get there first or be left behind forever.

(The writer is CEO, brand-comm and the author of ‘One land, one billion minds’.)


Ramakrishna Sunder said...

a) Agility to me does not mean only being leaders of change. While it is true that we need to constantly change in case there are major shifts in the business paradigm, mere change for the sake of change is meaningless. Where is the time to consolidate and really make the best use of things that work? Why change if it is not required?
b) I agree that innovation is more a mantra rather than being practised in reality. But what leads innovation - do we need a process or does this stifle innovation & creativity? I myself have been struggling with this question for a number of years. If process stifles innovaiton, then what engenders or encourages it?
c) Again, does innovation come only with customer focus? Do not the great innovators create customer needs rather than anticipate them and cater to customers' requirements? The i-pod is a case in point. So is the walkman.

There are no simple answers to these questions - each organisation has to find its own level of agility/customer focus/innovation etc., much in the way of water.

Ramanujam Sridhar said...

Yes which is more critical, innovation or creativity?Are the two related?Which spurs agility?I guess it is easier to ask questions than find answers.
Yes , customer focus need not be the only way forward but it helps to have this focus.

CS Murali said...

Nice one Sridhar. Extreme programming and Scrum – I now know that you are IT Savvy too!

The differentiator for Infosys isn’t really global delivery. According to HBS, the following are the differentiators for the Tier 1 companies:

TCS – Cost leader

Infosys – Innovator

Wipro – Technology Leader

Cognizant – Customer-centricity

Ramanujam Sridhar said...

Yes it demonstrates that companies might be talking about the wrong things or attributing wrong reasons for their success.Very interesting .