Agile companies rethink and redesign their structures, governance mechanisms, and processes to strike a balance between speed and stability
Research suggests that small changes in management can have an enormous impact on productivity and performance, equivalent to 25% increase in labour, or 65% increase in invested capital.
In today’s business environment, innovation, agility and resilience are essential for organisations to retain their competitive advantage. Collecting and analysing workforce data can provide organisations with the information they need to increase or develop capability in these areas.
Agility: It Rhymes with Stability
McKinsey research suggests that organisational agility is a combination of speed to act and stability of organisational structures and belief systems. It goes on to cite research by Columbia University that found that agile companies increased their net income by 5% annually.
This article defines agility as a speed to act supported by the stability of an enduring backbone to the organisation in the form of structures and belief systems.
People processes such as performance management are cited as a key factor in distinguishing agile from less agile organisations
The article cites one company where the sales leaders, rewarded by top-line numbers, tended to inflate inventory needs while logistics managers, judged by waste-minimisation, significantly reduced that figure when they could. The supply chain therefore often exceeded its targets, but salespeople frequently ran out of stock and key customers were alienated.
To solve this problem, the company built a few common KPIs (sales-forecast accuracy and customer satisfaction) so that all functions had some stake in business outcomes and a framework for frequent shared performance and target reviews between functions.
Companies can become more agile by creating looser, more dynamic elements that can be adapted quickly to new challenges and opportunities, drive speed and create stability
For more information and practical guidance on developing resilience at an individual, team or organisational level, read the CIPD research report and guide below.
Information and practical tips on planning for and managing risk and business continuity, below.