As we emerge from the pandemic, one thing is clear: we are currently at the turning point of the fifth technological revolution. Only organizations that evolve with changing technology and industry digitalization will survive and thrive.
In fact, during Covid-19, only the organizations that moved online and underwent a full digitalization of their product and services were able to stay afloat. The speed of change isn’t slowing down, and the landscape is changing faster and faster. But just as important as adopting new technology is adapting and updating your organization. The goal is organizational agility, which is critical during turbulent markets.
What is organizational agility? McKinsey captures the idea well: “Agility is the ability of an organization to renew itself, adapt, change quickly, and succeed in a rapidly changing, ambiguous, turbulent environment. Agility is not incompatible with stability—quite the contrary. Agility requires stability for most companies.”
As companies move toward true organizational agility, there are three fundamental strategies to follow:
1. Customer Centricity With A Product Focus
To be able to execute organizational change, the business needs to become customer-centric. Every activity and decision should be determined based on satisfying customer needs.
Creating a fluid organizational structure and focusing on the solution/product/service is critical. The whole company needs to be focused on and contributing to the value stream. Most businesses aren’t set up this way, with most organizational structures, processes, and cultures created decades ago. They were built with stability as the main goal, not innovation or agility.
It’s important for all employees to see each project as a base component to achieve the universal—and customer-centric—goal. Each project shouldn’t be treated as an ultimate company goal but as a way to achieve an outcome. At an even more basic level: a project is a series of tasks that need to be completed to reach a specific outcome. Each activity in the organization should be treated and managed as a project—and should be directly connected to the company’s overarching goal.
Enterprises needs to align their development efforts around the full, end-to-end flow
of value. Smaller and more lean business operations need to recognize that delighting customers goes further than purely solution development. The entire customer journey, which includes delivering, operating, and supporting business solutions, needs to be continually optimized to reduce time to market and increase customer satisfaction.
2. Units Or Teams That Trigger Organizational Change
In reality, organizational change won’t happen by itself, and can’t be driven by one singular department. It could start in one department, but ultimately needs to spread across the organization which will only happen if driven by leadership.
There are few different types of organizational groups that can drive process changes, transformations and project governance in a business:
• Project management office (PMO): A department that “sets, maintains and ensures standards for project management across an organization.” They create and track best practices, and project statuses and provide ongoing direction.
• Communities of practice (CoP): Informal groups in an organization joined around certain topics, knowledge or activity.
• Center of Excellence (CoE): A group of people “with specialized skills and expertise whose job is to provide leadership and purposely disseminate that knowledge within your organization.” They are usually created to fix a deficit within an organization.
Forming a business unit devoted entirely to driving and implementing organizational agility will not only illustrate leadership’s commitment to change, but also provide structure to the initiative.
3. Cross-Functional Agility That Aligns To One Value Stream
Organizational structure should be fluid, and hierarchy should exist based on project activities. Businesses should reorganize into a team-based structure, where each team is involved in one or more projects to create cross-functional teams that directly contribute to the value stream. That means people are connected vertically and horizontally and intertwined together to achieve the same goal.
Soon, the boundaries of the department will slowly disappear, and the whole team will be tied around a common value. This will drive commitment, a full understanding of the product or solution, and create a sense of ownership and autonomy that will drive innovation and execution.
The organizational structure will be more fluid, adaptive, and multi-dimensional. In theory, the organizational structure will be like a live organism that adapts based on a new value stream and project. The PMO, CoP, and CoE will not be singular independent units but intersect in every aspect of an organization. The whole organization will become the Center of Project Excellence where members are organized in autonomous customer-focused teams around values. Where development efforts are based around the full, end-to-end flow of value, from the smallest activity, like a project, to the ultimate outcome.
Spotify is an excellent example of a company that has employed this mentality and found great success. The tech company created “squads,” each one focused on “one key area, such as maintenance, operations, design, tests, release, production etc. The squad members have end-to-end responsibility and the team has one long-term task at a time. The freedom of their choices and decisions is limited by the company’s mission and by the product strategy.” A group of squads form “tribes” and from there, specific “chapters” and “guilds” are also formed: all working towards one goal: a great customer experience for artists and fans alike.
Organizational agility is critical in 2022 as companies prepare for the next big technological revolution. The companies that refuse to evolve risk losing their competitive edge and market share to those that are changing with the times.
Originally created at Forbes.com by Milan Dordevic
