The rules of business have changed. According to a recent Credit Suisse report, the average S&P company lifespan was once 60 years. Today the average is around 20. Startups? Small businesses? They are lucky to survive at all. And as fast as things are changing today, businesses are experiencing the slowest rate of change they’ll ever see. Tomorrow will be faster. The next day faster still.
How do organizations thrive in an environment where disruptive innovations change entire industries seemingly overnight? The answer for many is to try to become more agile—to drive decisions to the far edges of their business. This is a good first step; but it doesn’t go far enough.
Growing the Agile Ecosystem
Contrary to what many consultancies might say, agility cannot just be inserted into an organization for instant results, either as a three-step process or an all-at-once scaling system. True business agility—sustainable agility—depends upon a thriving agile ecosystem made up of teams, HR, finance, and leadership.
The journey towards sustainable agility typically begins with one or two teams, who are empowered to make decisions and self-organize, and spreads from there. Agile teams produce and deliver small increments of work in short cycles, then adapt based on customer feedback. They create, learn, and then create again.
Drucker Forum 2019
As agile teams proliferate, the HR function adapts as well. It hires people with agile mindsets, looks for certified agile coaches to guide the efforts, and finds ways to reward team- as opposed to individual success. HR also helps to create a culture of learning. As Peter Drucker put it, “Learning is a lifelong process of keeping abreast of change … the most pressing task is to teach people how to learn.” Agile ecosystems thrive when experimentation is encouraged and failure is normalized as a part of finding a successful solution.
Traditional finance departments depend on highly detailed, upfront plans to formulate budgets for the years ahead. Agile teams plan as they go, enabling them to react swiftly and respond appropriately to change. Finance departments, therefore, must adapt to new ways of accounting and budgeting.
In Joy, Inc., Richard Sheridan writes: “Typical corporate bureaucracy uses rules to limit the sharing of information and decision-making power … Most of the organization concludes it is not allowed to participate, so it doesn’t.”
Agile leaders, on the other hand, recognize that people are their power and that their participation is crucial to success. They empower self-organizing teams to make decisions and foster a culture of collaboration. They focus on transparency, making a conscious effort to share information throughout the organization.
Agile Ecosystems Are Crucial for Sustainable Agility
An agile ecosystem, made up of leadership, finance, HR, and self-organizing teams, is essential for organizations seeking sustainable agility. As Sheridan also notes, agile leaders aren’t “looking for easy change;” they are “looking for meaningful change.”
Meaningful change—sustainable agility—hinges on a supporting agile ecosystem that extends from the team level to the C-suite.
About the Author:
This article is one in the Drucker Forum “shape the debate” series relating to the 11th Global Peter Drucker Forum, under the theme “The Power of Ecosystems”, taking place on November 21-22, 2019 in Vienna, Austria #GPDF19 #ecosystems