Building Agile Organizations

Soccer, the world’s most popular sport, is a lot like the business world of strategy execution: it’s a complex game where the future possibilities are endless. Proficiency depends not only on your team’s knowledge and skills, but also on your ability to read the field, make quick decisions and communicate with your team-mates. Both soccer and strategy execution are about learning quickly, acting fast and coming up with innovative ways to manoeuvre towards the goal and building agile organizations.

Innovation is critical for strategy execution in two ways: it ensures that your strategy is viable and improves your ability to execute it in record time. Your strategy can become irrelevant if you don’t adapt to the marketplace by providing products and services that customers want. Without continuously improving your execution capabilities, your strategy may not allow you to keep up with the market.

The majority of these innovations are, in practice, small, incremental and rapid improvements. Most soccer games are won through skilfully passing the ball in progressively forward directions down the field, not through heroic midfield power kicks straight into the net. London Business School management professor Donald Sull confirms that successful strategy rarely follows a linear path. His research suggests that most successful companies, “follow a more iterative approach, where leaders first make sense of the situation, then make choices about what to do, what not to do and what to stop doing. They then make it happen by executing on agreed objectives, and finally make revisions by revisiting initial assumptions and comparing them against what actually happened.” The bottom line? To win, you need agile people within systems that allow for rapid and effective action as the field changes.

In order to deal with rapid shifts, two things have to be in place in an agile organisation:

1. A continuous improvement system that reviews current progress in strategy execution and enables quick and effective decision-making. Here is where the strategic performance metrics are critical. If you don’t measure strategy and execution, you won’t know what improvements are needed. If you don’t have a way to learn and to correct your course quickly, it may be too late to turn the game around.

2. A screening and decision process in your project portfolio management system that integrates potential new performance improvement projects, products or services brewing throughout the enterprise. What improvement projects make sense now that the game is unfolding and new information is available?

A great “agile” strategy reallocates short-term resources to fit the needs of the hour, and evolves other systems in the organisation to support those changes.Stay agile and you can make changes effectively. However, agility doesn’t come naturally, it takes work and coaching. An agile organisation also comes through staff that have agile thinking and organisational systems that accommodate the capacity for change and adjustment. Just like an athlete practicing agility drills, you can pinpoint the work needed to reduce misaligned or wasted effort and build speed and strength in your strategy execution capabilities.

Here are three examples of common improvement areas:

1. Execution planning processes.

Getting it right at the pre-implementation stage and incorporating cross-functional collaboration planning saves frustrating setbacks such as delayed decisions, silo conflicts and budget overruns. During execution planning it is critical to define your initial assumptions and then track them for potential shifts or changes.

2. Time for continuous improvement processes.

Companies often have insufficient processes and not enough slack in their resource base to enable a dynamic continuous improvement pipeline. Without the slack, your organisation can get wound up very tight and committed to a course of action that doesn’t allow you to make the shifts needed when you re-evaluate your next play. A 10- to 15-per-cent contingency slack in strategy execution staff resources is usually required to respond quickly to a shift in the game plan.

3. People allocation.

A key component of any strategy execution system is the model used for resource allocation. If it’s not calibrated to the real demand of the project portfolio, projects can churn at a snail’s pace and hinder strategic goals and employee morale. The people-allocation model must also have ways of rating the players – do the people executing have the right skill sets? This element needs to weigh the time required to get work done and what is required to achieve desired customer outcomes.

The leadership philosophy required for effective strategy execution is about being able to adapt and change faster – the ultimate competitive innovation game. You know you are really agile when you’re learning faster and executing ideas faster than your competition. An agile organisation has a “kaizen” mindset – a consistent game plan of remaining committed to rapid continuous improvement in strategy execution and other core business processes. In turbulent economic times, staying agile should be a critical priority, rather than implementing drastic measures to cope with short-term challenges.

By William Malek