Organizational Agility

Knowledge Center

• About
• Home
• Dictionary
• Encyclopedia
• Question?
• Views

• Register
• Log in
• Help

• Change & Organization
• Communication & Skills
• Decision-making & Valuation
• Ethics & Responsibility
• Finance & Investing
• HRM
• Knowledge & Intangibles
• Leadership
• Marketing
• Program & Project
• Strategy
• Supply Chain & Quality

Description of Organizational Agility. Explanation.

Definition Organizational Agility. Description.

The term "Organizational Agility" can have two (confusing) meanings:

1. Broad, all-encompassing: The (overall) ability or capacity of an company or organization to quickly and consistently adapt to changes in the external environment, by identifying and capturing business opportunities in a more skillful way than its competitors. Also called: Enterprise agility.
2. Narrow: The ability or capacity of an company or organization to establish an adapting, flexible and offensive organization (as part of 1).

Agility has an active, offensive connotation, as opposed to Organizational Absorption which tries to deal with external circumstances via defensive mechanisms.

Agility is a concept that incorporates the ideas of flexibility, balance, adaptability, and coordination under one umbrella. In a business context, agility typically refers to the ability of an organization to rapidly adapt to changes in the external environment and/or market in a productive and cost-effective ways.

There are at least 3 forms of agility (Sull):

• Operational Agility
• Portfolio Agility
• Strategic Agility

See also: 5 types of Agility (Prasad)

Agile Teams

Rigby, Sutherland and Noble describe agile innovation teams as typically small, flexible, cross-functional teams working on innovation projects. Typically they enjoy a lot of organizational freedom and can be self-steering, bypassing usual layers of control and approval procedures, thereby speeding up work and improving the motivation of the team members.

They deploy prototyping and short feedback loops to (field) test solutions while constantly improving them. They are well suited for VUCA circumstances (Volatile, Uncertain, Complex and Ambiguous) in which problems are complex, solutions and project requirements are at first unclear and change frequently, collaboration with end-customers and internal customers as well as a lot of creativity and lateral thinking are needed.

From a Few to Many Agile Teams

After having launched and tested an initial set of agile teams, top management should be able to assess the operational and strategic costs and benefits of these agile teams and of increasing agility in general.

To scale up and roll out the approach of agile teams, Rigby c.s. recommend two essential tools:

1. CREATE A TAXONOMY OF TEAMS: Create a comprehensive list of all agile opportunities, categorizing them into customer experience, business process and technology projects. Such list typically contains hundreds of projects for a large organization. The reason for the taxonomy is that it helps to explore and develop a transformational vision while breaking up the strategic transformation into smaller chunks and steps. Also any obstacles, like a lack of people with agile experience are being revealed. The required hiring and training efforts become clear. The taxonomy also helps to avoid redundancy and duplication of efforts by showing who is working on what, and can contain links between the agile teams and the existing business units and product lines.
2. SEQUENCE THE TRANSITION: Prioritize and determine the order of projects to launch, considering criteria like strategic importance, availability of people, financial restrictions, return on investment, strategic risks, and interdependencies between projects/teams.

In scaling up their agile effort, companies should consider a major issue associated with going for easy wins in the form of deploying external business incubators. Business incubators do not provide the learning environment of the organizational changes that will be necessary to scale up organizational agility to hundreds of teams and even the entire organization.

Increasing Agility Across the Entire Corporation

Scaling up the amount of agile teams is a major accomplishment towards increasing enterprise agility. To involve the rest of the organization and make sure it is not hampering the strategic change effort by the agile teams, Rigby c.s. recommend companies make major updates to their:

• VALUES AND PRINCIPLES: Create a company-wide understanding of the need to change and adjust organizational values.
• OPERATING (IT) ARCHITECTURES: Modularize and define interfaces to increase the ability to accomodate very frequent changes in business processes without having to adapt complex backend systems. See Enterprise Architecture.
• ACQUISITION, MOTIVATION and DEVELOPMENT OF TALENT: Attract star performers and develop internal agile talent. Hire people willing and able to work in multidisciplinary teams. Adjust compensation systems.
• (ANNUAL) STRATEGY AND BUDGETING PROCESSES: Move towards more emergent strategy processes and fund strategic options.

Sources:

Donald Sull, "How to Thrive in Turbulent Markets", HBR February 2009

Darell K. Rigby, Jeff Sutherland and Andy Noble, "Agile at Scale: How to Go from a Few Teams to Hundreds", HBR May-June 2018, pp. 88-96

Baba Prasad, "Nimble: Make Yourself and Your Company Resilient in the Age of Constant Change", TarcherPerigee (2018)

Organizational Agility Special Interest Group Special Interest Group (115 members)

Organizational Agility Forum   Recent topics   What is an Agile Mindset? Attributes of Personal Agility Lately we read a lot about organizational agility. To make organizations agile, we need agile people. An agile mind-set accepts everything as lessons,...           6 Principles to Create an Adaptive Organization (Reeves) According to Reeves, Lewin and Ueda, companies - similar to living organisms - are "COMPLEX ADAPTIVE SYSTEMS". They evolve in a complex manner, wherei...           Human Capital Agility is Critical for Organizational Success The organizational agility is the resultant effect of the various individuals agility or lack of agility. With certain agility instruments a core...           Rapid Response Management Rapid Response Management (RRM) is an organizational construct or mental model that enables the organization and its key partners to rapidly sense cha...           How to Become Agile in Organizational Change? Every organisation needs to be "change agile" if it is to realise its potential growth. Growth is about raising the bar beyond previous levels of perf...           5 Types of Agility (Prasad) The concept of strategy now changes from being plans of actions for the future to developing capabilities that can allow us to handle different situat...           How to Become an Agile Employer? Trust is a fulcrum (Editor: ~ a supporting pillar) for managing business in agile way. So, how much trust should an employer have in its employe...           What is Agility and Why is it Important? In common parlance, agility is nothing but being able to quickly adapt to changes. The 21st century is characterized by Volatility, Uncertainty, ...

Best Practices - Organizational Agility   Leading in Challenging Times: Creating Agile Organizations This is a challenging time for leaders in charting a course for their organization. These times bring life to the ancient quote from Publilius Syrus t...

Expert Tips - Organizational Agility   How to Become a Self-tuning Enterprise: Advanced Experimenters       Effective Top Management Teams in Multinationals. Requirements and Characteristics       Process Steps for Organizational Agility       Components of Learning Agility       Bureaucratic Organizations versus Dynamic Organizations

Resources - Organizational Agility Learning Agility and Enterprise Agility   Organizational Agility and the Role of Information Systems   Organizational Agility: 8 Building Blocks   5 KSFs of a Truly Agile Business   Corporate Diversity and Inclusion   How Businesses can Use Information Technology (IT) in Strategic Ways   Knowledge Management, Organizational Learning and Intellectual Capital   Leadership and Learning Agility   Introduction to Network Organizations   The Essense of Organizational Agility   Introduction to Business Continuity Management     News about Organizational Agility         Videos about Organizational Agility         Presentations about Organizational Agility         Books about Organizational Agility         More about Organizational Agility

Compare with: Dynamic Capabilities  |  Organizational Absorption  |  Agile Absorption  |  Crisis Management  |  Strategic Risk Management  |  Scenario Planning  |  Game Theory  |  Real Options  |  First-mover Advantage

Return to Management Hub: Change & Organization  |  Human Resources  |  Strategy

More on Management  |  Return to Management Dictionary  | 

This ends our Organizational Agility summary and forum.