The Main Barriers to Building an Agile Organization
Creating an agile enterprise is far from easy. Changing an existing organization into an agile one is even more difficult. It helps to at least know beforehand what are probably going to be the four key barriers to building an agile business, encompassing Culture, Clarity, Closeness to customers, and Collaboration. Among the four, culture is perhaps the most fundamental factor of success in agile transformation; and the other three come by more easily if an agile culture is already prevailing in the organization. Agile leaders need to not only have a comprehensive understanding of all the four barriers but also explore efficient ways to remove each to make their organizations more agile.
Source: Hayward, S. (2018). "The Agile Leader", London, UK: Kogan Page.
- RISK AVERSION: The main key barrier is having an organizational culture that creates a fear of risk.
An organizational culture that generates a fear of taking risks is one of the main barriers to company success in the digital age. Agile leaders need to act like a football team coach who nurtures a culture of shared confidence in teamwork based on discipline, or like an orchestra conductor who enables the musicians to use their individual skills at the peak of their ability. An agile leader needs to create a supporting environment based on trust, just as the coach or the conductor does, to give the people in his organization the opportunity to express their talents with confidence.
Culture is "the way of life," and describes "how we do things around here"; agile culture is a connected culture underpinned by balance, strength, speed, coordination and endurance. To create an agile culture, the best way is to start with the senior team who are usually at the center of legacy problems, and has the power to reverse old approaches to rebuild confidence among their people based on giving trust.
To build an agile culture, six critical sub-factors must be in place:
- Leadership commitment: senior leaders must provide people with all the support needed to work in agile ways.
- A shared sense of purpose and clarity of direction: a clear mission and agreed priorities are needed to free people to act quickly and in alignment with the organization's intended outcomes.
- Authentic leadership: leaders must act as role models of the organization's values and instill trust around them so as to make people feel ease at taking risks and bold actions.
- Devolved decision making: decisions need to be consistently made as close to the customer as possible, thus most decisions in the organization should be made by experts and people closer to the customers.
- Collaboration across teams, functions and specialisms: a clear commitment to teamwork and cross-functional work must be made part of the organizational culture.
- A focus on and encouragement of experimentation and constant feedback: continuous learning from customer feedback, experimentation and mistakes needs to become a vital part of a culture that encourages people to deal with uncertainties with confidence.
- LACK OF CLARITY: The second key barrier is having a lack of clarity about priorities, from individuals to the whole organization.
After culture, the second barrier to building an agile business is the lack of clarity about goals, expectation and priorities at both individual and organizational level. It's not enough to offer people the freedom to adapt and experiment, they also need a clear vision of what they are trying to achieve together. Therefore, leaders need to provide real, simple clarity about where the organization is going, what role each person and team is to take, and what's expected of people in terms of outputs and standards of behaviour. In addition, too many large organizations are burdened by the legacy of complex bureaucracy that is slowing down decision making and obscuring the vision and goals, making stripping away the bureaucracy another critical step to build up clarity.
- LACK OF CUSTOMER FOCUS / CLOSENESS: The third key barrier is not being sufficiently close to the customer, so customer needs don't drive day-to-day priorities.
A fundamental principle of agile working is to stay close to customers, to test Minimum Viable Products with them by getting regular feedback from them. An effective way to address this challenge is to introduce a customer-centric catalyst either through creating an internal 'start-up' incubator, where new ideas are given the required environment and resources to flourish, or through acquiring a customer-centric organization while protecting its culture and spreading its influence to the host through gradual assimilation. Both emphasize close collaboration with customers who are involved in idea generation and testing.
- LACK OF COLLABORATION: The fourth key barrier is having a weak collaboration across strong silos.
To innovate and prosper in our digital world today, collaborating between teams, functions and organizations is becoming the irreplaceable way of working. Yet many large and mid-size organizations are still working in a silo structure that's hampering innovation and rendering their investment on digital transformation a huge waste. Their priority should be to remove the silos that get in the way of a seamless collaboration between all parts and all stakeholders of the organization. Leaders in the organizations must become the role model for this. On the one hand, they themselves need to work across a range of functions to have a diverse understanding of the business that drives deeper collaboration; on the other hand, they also need to build diverse teams who can share different perspectives, and create opportunities for cross-team, cross-functional collaborations in the organization.