Agility:  The Forgotten Third Element of Organizational Change

As organization change practitioners for more than 35 years, we have witnessed admitted failures, claimed successes and, least often, real change that matters in a competitive marketplace. If we were to develop a scoresheet for these projects, it would have three major elements:

1. Change Project Delivery
2. Stickiness of the Change
3. Agility or the Ability to Keep Changing

Project Delivery

In previous posts, we have talked about the critical success factors for change project delivery. In our view, these factors result in a clear and consistent approach to project and organization change management. Unfortunately, study after study for more than 30 years shows only about one third achieve business case goals, another third deliver something but not necessarily what was promised, and the remainder are the admitted failures.

Stickiness

Assuming you are celebrating project victory, does anyone ever check to see if the gains are still measureable months, or even years later? This may be because the organization moves on to the next big thing … or as we have witnessed in some large organizations, the successive generations of leaders take credit as innovators when they merely reversed the decisions of their predecessors. Done right, the measurement, training, communications, and rewards/performance management structure necessary to make the change “stick” should be baked into the change project itself and not left as something to take care of itself after the project is done.

Agility

What is it?

So you have done the first two right and still the business fails to standup to competition, or the non-profit no longer delivers at a satisfactory level, or the government program stops satisfying the electorate. The standard measures of an organization change project encompassed in our first two elements do not explain this outcome. We have to look at how the changed organization behaves after the project team goes home. McKinsey describes this critical organization attribute as “Agility,” defining an agile organization as one that moves quickly while maintaining organization stability¹. Christopher Worley, Senior Research Scientist and Professor of Strategy at the NEOMA business school in France, describes the agile organization as establishing a climate for revising strategies, perceiving and interpreting environmental (external) trends and disruptions, testing potential responses, and implementing the most promising changes².

How do we know it is important?

We have McKinsey’s measurement of organization health and multiple anecdotal instances of successful, even cutting edge, organizations that failed at agility to show us the importance of this element. McKinsey data shows that fully 70% of agile organizations are in the top quartile of organization health¹. Anecdotally, we can look at two computer companies that as late as the 1990s trailed only IBM in terms of growth and industry leadership. Both Digital Equipment Corporation and Datapoint were leaders in the development and even invention of the minicomputer. Yet when the market demanded a change, both stuck with the products and process that had made them successful to that point. Unfortunately, this inability to make the next change led to their downfall. In retail, we can look at two companies that were America’s largest retailers’ in their day. A&P in the 1930s and 1940s, and Sears in the 1950s and 1960s, dominated the marketplace in their segments. They made the right decisions and implemented the changes needed to dominate … and then they stopped. A&P is virtually gone and Sears is now a lower tier player in its retailing space.

What are the critical steps?

In the TBO approach, we recommend building in agility before change project closure. Our steps:

1. Identify a process owner. It is very likely the process owner will be the sponsor of the change project. If not, it is the executive who can evaluate the change, monitor status of the change over time using metrics, and approve follow-on changes. This role also includes monitoring the environment for opportunities.
2. Encourage controlled innovation. Stakeholders, particularly the people whose roles and tasks are impacted by the change, should be encouraged to continue to look for opportunities to improve. These should be referred to the process owner to charter experiments with the greatest potential. These experiments should be limited to small groups and have very specific measures of success before they are considered ready for large scale deployment. This is not, however, a license for ad hoc changes or “skunk works” localized to specific departments.
3. Adopt the best of the experiments for wide scale deployment and reward the innovators. When necessary/worthwhile, charter new change projects and explicitly [or openly] recognize contributors to improvement.

For these steps to work, the organization must create the right environment. Peter Koning, in his Linkedin post 5 Urgent Reasons for Business Agility³, suggests reasons for agility which can be taken as cultural steps to enable your successful change projects to keep growing, building the basis for the future. These steps are:

1. Recognize the speed of change is increasing. (Pausing is not an option.)
2. Embrace the digital revolution. (Consider a Chief Digital Officer to drive rapid change based on converting traditional analog business/process to digital.)
3. Empower your employees. (Engage small teams in controlled experiments.)
4. Be Customer-centric. (Know what makes your customers successful and encourage innovation that supports them.)
5. Establish urgency to remove barriers between departments. (If the initial change did not address this, look for ways to make it happen.)

 3 Final Thoughts for a Change Project to Be Successful

1. Do not stop when the deliverables and new process are in place.
2. Do not stop when a year later metrics tell us goals are being met.
3. Never stop – even when the project team is long gone! Build the culture and process to enable organization agility that is critical to long-term success.

Let us know how you view this approach and if it would work in your organization by completing the form below or by contacting me directly at tholtz@tbointl.com.

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¹ Why Agility Pays; Michael Bazigos, Aaron De Smet, and Chris Gagnon; McKinsey Quarterly, December 2015

² The Key to Every Successful Business is Agility, Christopher G Worley, http://www.entrepreneur.com/article/240705

³ 5 urgent reasons for Business Agility, Peter Koning, https://www.linkedin.com/pulse/5-urgent-reasons-business-agility-peter-koning?trk=prof-post