Being an agile organization is a major cultural shift from the way many organizations manage today, which can be broadly summed up as being plan-driven by a centralized, command-and-control structure that relies on a heavy dose of reporting. And while this model works, it is proving cumbersome, costly, and unable to adapt quickly enough in today’s turbulent business climate.
It’s not uncommon to hear senior executives express deep concern about the lack of employee engagement (which collectively costs U.S. companies hundreds of billions annually in terms of lost productivity) and the need for commitment and results from people because “they are our greatest asset.” Yet companies continue to manage in ways that say, “I don’t trust you” to the very people on the front line who are responsible for – and should be trusted – to conduct business with and for a company’s customers.
While there are many who will assert that they are using a “trust, but verify” model, companies expend a great deal of time and effort in reporting and oversight that is geared towards compliance – along with imposing serious constraints on what those on the front line can and can’t do without centralized approval. Even with information systems designed to facilitate the approval process, it’s still a cumbersome, inflexible and slow system that siphons time and attention away from delighting the customer and maximizing the value that the entire organization brings to the customer.
Worse, some companies manage solely “by the numbers,” creating a “management by fear” climate in the name of driving accountability. Don’t make your numbers and you’re history…
While driving a profit is certainly important, agile organizations recognize that making your numbers isn’t everything. The financials are one measure of how delighted your customers are – because they are buying products and services from you – and they tell you how well (how profitably) you are delivering those goods and services. But it's the people who get you there and the processes and culture that drive a great deal of productive or unproductive behavior.
Being an agile organization (lean applies here as well) is all about removing the overhead and constraints associated with operating a business, not unlike what small businesses do when they start to grow. Small business owners don’t hire extra people to “manage” and control them as business takes off; they bring in extra help to deal with all the administrative overhead so that they can remain focused on the serving the customers.
An agile organization opens everything up, which involves a combination of transparency, honesty, and mutual trust. Agile organizations start by trusting that people want to do good work and delight the customer, giving the latitude and support to the people directly responsible for delivering that value. The role of senior executives shifts to one of partnering and coaching versus monitoring and controlling.
Agile organizations don’t use information systems to automate and make it easier to drive a centralized command-and-control structure; agile organizations concentrate on using information systems to inform the organization, to facilitate information-sharing and building a common understanding of the business and the customer base. They turn the entire organization on its head and eliminate the need to use – let alone automate – heavy-handed control mechanisms driven from a corporate center.
Agile organizations shift towards looking at the company’s operations in new ways. The goal is to streamline processes and eliminate waste, to find new ways of doing things and being more productive on a continual basis. Everyone is involved in thinking about the strategy of the company and in how to improve its operations. Anything that does not contribute to delivering value to the customer is called into question. Queues and bottlenecks are continually being examined and eliminated. The goal is to make every aspect of the business lightweight and fast, with an eye on delivering value to the customer at all times.
By removing the bureaucratic overhead and shifting responsibilities to those on the front line, a greater understanding of the business and engagement result. It also creates the ability to immediately adapt and respond to the changing needs of the customer and those challenges that always arise along the way. Sure, people have boundaries, but those boundaries are both clear and broad, but they are built on a foundation of trust that moves a company forward in all the ways most companies these days are only saying that they want to.