When fast or even exponential growth is keeping change a constant, the perfect of today will quickly become the obsolete of tomorrow. Instead of striving for perfection, companies need to invest in becoming adaptable to the increasing complexities of the growing work environment. In order to build the structures that increase agility, focus on:
- Basing decisions on real-time data,
- Having a clear governance structure and
- Trading the strive for perfection to embracing continuous improvement.
Business agility, on a general level, means readiness and the capability to react and change at any given moment quickly and efficiently. In practice, it might mean analyzing market signals and responding quickly to relevant signals. Of course, there are industry specific differences, for example production might need longer term investments compared to services. On the other hand, in these process-driven industries, agility could be increased with flexible material flows and product innovation for the existing production structures.
The picture below demonstrates how agility could be enhanced across the organization.
Three must-win battles to increase agility
Going back to growth companies, where the future can be hard to predict – making long term investments risky. For these companies, a more agile approach to development could put resources to better use. No matter what is in the core of the strategic agenda, the three must-win battles are:
- Leadership and
- Continuous improvement.
#1: Ensure fast, high-quality decision making with data utilization
Companies wanting to be more agile, should not be afraid of failure as it usually teaches us more than success. However, while embracing imperfections, it is important to base decisions on real-time data in order to keep quality in operations. Companies need to make sure that the data infrastructure is driven by clearly identified business objectives and different departments are involved in defining the current state and potential future needs. As a result, there will be benefits from synergies, cost efficiency and control of system complexities, which could otherwise be lost to multiple, overlapping data projects.
Once the infrastructure is in place, make sure that data is the driver of business decisions across the whole organization. This includes all strategic, tactic and operational decisions – data is basically in the heart of the culture. This might need initial incentives before it is a default action, but once implemented, the organization will be on top of the current situation and get real-time insights.
#2: Keep the ship moving towards the right direction by effective leadership
While these agile models and self-organizing teams have become more popular one might start to question the importance of leaders. In practice, total contrary as leadership plays a significant part in enabling agility within an organization.
Firstly, a leader is needed to keep the target, objectives and if applicable, schedule, crystal clear to the whole team. As a result, a self-organizing team will develop towards the desired, common goal. Secondly, progress follow up, prioritizations and motivation are crucial responsibilities of an agile team leader and they need to have appropriate authorization to make the needed decisions. Finally, constant reflection on the actual tasks as well as on the current processes and governance structures are needed to keep focus on value – improvements should be driven if something is not relevant anymore. Thus, leaders should be viewed as change agents.
#3: Focus on continuous improvement instead of striving for perfection
Agility is basically all about the culture, which means that in order to increase it, focus should be put to recruiting the correct people with the right mindsets to tolerate uncertainties. If I had to pick one thing to focus on in the organization culture, I would choose continuous improvement, which requires engagement throughout the organization. In addition, this last must-win battle requires the first two in order to have some direction and purpose. When there is visibility to the current situation and the leader has clarified the targets and objectives, each improvement is more likely to be a step in the right decision. In addition, with reflection by data-utilization the improvement can be ruled as a success or failure and learnings can be applied to future cases.
As a conclusion, renewal is a prerequisite in today's business and especially for companies having ambitious growth targets. They should not lock themselves down to old habits. Like mentioned, by investing in 1) data utilization, 2) effective leadership and 3) continuous improvement, companies will build structures and culture that enable the capability to react to anything the future might hold.
Listen to what CEO Elina Björklund and CFO Jani Koskinen have to say about Reima's demand planning, where an agile approach to development was used.
On the same topic read our blog post by Eero Soralahti about Jeff Bezos’ 1st day philosophy, which is all about gaining a competitive edge through agility.
If you would like help in getting started with battle #1, please book a meeting with Mikko to discuss your needs for implementing business-driven data infrastructure or data-driven culture: