It is difficult to be innovative when that innovation can potentially ruin your organization. The fact of the matter is the global market is becoming increasingly more volatile. This is the focus of a paper from the Project Management Institute. According to the paper, this new trend calls for increased organizational agility. Many organizations are accomplishing this by revising their inner workings in three ways:
- Rigorous change management to better adapt to shifting market conditions
- More collaborative and robust risk management
- Increased use of standardized project, program and portfolio practices
The paper goes on to note that organizations that are more agile are “twice as likely to see increased success with their new initiatives as their counterparts with low agility.” It is important, of course, to understand precisely what organizational agility really means. The most popular answer researchers received when asking that question was that it meant quick response to strategic opportunities. Respondents also included shorter decision/production/review cycles, focus on change management, and integrating voice of the customer, among other things. Truly, there are multiple benefits to organizational agility:
Even before the economic downturn, the role of organizational agility in providing a competitive advantage was supported by a McKinsey survey. Nine out of 10 executives, spanning all regions and industry sectors, ranked organizational agility both as critical to business success and as growing in importance. In addition, nearly 90 percent of executives surveyed by the Economist Intelligence Unit ranked organizational agility as vital for business success. One-half of all CEOs and CIOs agreed that rapid decision-making and execution are not only important, but also essential to a company’s competitive standing. Agility may also be linked to profitable growth: Research conducted at the
Massachusetts Institute of Technology suggests that agile firms grow revenue 37 percent faster and generate 30 percent higher profits than non-agile companies.
It is important to remember, however, that simply declaring a company more agile does not automatically make it so. A company must make efforts to improve in the areas of change management best practices implementation, risk management best practices implementation, and portfolio, program, and project management practices standardization. The paper does state that “there is, of course, no magic bullet for staying ahead, especially during tumultuous economic times.” This does not mean, however, that a company should at least try to achieve organizational agility.
Change, risk, best practices, and other areas of concern need to be kept in mind when trying to mold your business into a more organizationally agile one. Truly, these items should be kept in mind anyway in the business world, so why not mold the way your company addresses these areas around a goal of organizational agility? When company after company is showing the benefit of making such a change, it would be unwise to not try it for your own business. Remember, this is not simply a change in mentality. It takes work. However, as the research and respondents have shown, a little bit of work goes a very long way with organizational agility.