Organisational Agility: How Agile Is Your Organisation?

Is your organisation fast, responsive, flexible, and agile in developing strategies to respond to disruptive changes in the business environment? Business decisions are made quickly and easily. The organisation is highly flexible in adapting to changing customer demands and competitors’ movements. It continuously transforms its business practices. Business practices quickly become outdated. In this type of organisation, the word ‘old’ may refer to something from only a few days ago, rather than months or years. Everyone is enthusiastic about changing the way they work. Even when Standard Operating Procedures (SOPs) exist, they may have a short lifespan because they are frequently revised. In some cases, SOPs may no longer be used because they are considered cumbersome and outdated, leading the organisation to place greater emphasis on outcomes or results. If these characteristics describe your organisation, you should be proud to say that organisational agility exists where you work.

You need to recognise that the characteristics above require dramatic changes across many organisational components.

Everyone needs to have a growth mindset. People need to possess multiple skills. Organisational culture needs to be dynamic. Empowerment should be a term frequently used by leaders. Authority should be distributed. Interaction between individuals and across departments should take place naturally. There should be no silos. Conflict should serve as a means to improve business practices. Knowledge sharing should become common practice. Everyone should be accustomed to having their performance measured regularly through KPI scorecards. People should have access to the information relevant to their work. Decision-making should be participative. Remuneration systems should be based on performance, and the chain of command should be clear. How wonderful it would be if these organisational components were already present in your organisation.

When all these components work together, your organisation can become highly agile in responding to change. However, organisational agility weakens when only some of these components are present. For example, everyone may already have a growth mindset, but if leaders are reluctant to distribute authority, organisational agility will weaken. The chain of command may be very clear, but people may still find it difficult to access information related to their work. As a result, employees simply wait for instructions because they do not have sufficient information to act independently. In such a situation, perhaps only the leader is agile. You may be able to identify many other examples where the presence or absence of different organisational components determines the level of organisational agility.

Agility Requires Everyone to Be Sensitive to Change

Organisational agility requires everyone in the organisation to be sensitive to changes in customer preferences and competitors’ movements. One important indicator of an agile organisation is therefore the extent to which everyone is sensitive to change. If only the leader is sensitive to change, the organisation will still be slow. If only people at the lower levels of the organisation are sensitive to change, the organisation will also be slow. If only a small number of people recognise changes in the external environment, the organisation will remain slow. Organisational agility requires everyone—from owners and top leaders to middle managers, lower-level leaders, and their teams—to be sensitive to change. Otherwise, meetings may be dominated by lengthy debates. Meetings fail to produce decisions and instead become exhausting discussions or seminars.

Measure the Gap Between External and Internal Change

In an agile organisation, everyone needs to understand the gap between the speed of change in the business environment and the speed of change within the organisation. When people throughout the organisation are sensitive to external change, it becomes easier and faster to change internal rules, SOPs, KPIs, remuneration systems, information systems, work structures, chains of command, authority, and strategic direction. People are also more willing to accept organisational change. For this reason, owners and top leaders need to continuously encourage people not to become like a frog under a coconut shell, seeing only the small world around them.

Benchmarking! Benchmarking! Benchmarking! This needs to be repeatedly encouraged throughout the organisation.

An agile organisation is one that is able to stabilise changes in the business environment within a short time horizon. Change can only be tamed temporarily by an agile organisation. A slow organisation, by contrast, is the one that becomes tamed by changes in its business environment. It is this ability to repeatedly tame change, moment by moment, that enables an organisation to compete successfully. So, how about your organisation? Is it agile or slow?

Learning Organisation and Organisational Learning

An agile organisation requires both a Learning Organisation (LO) and Organisational Learning (OL). A Learning Organisation is characterised by people who possess a growth mindset, encouraging them to continue working, learning, and growing. In a Learning Organisation, working is inseparable from learning. Without learning, people cannot continue to perform effectively. Working without learning is like entering a tunnel without knowing where it begins or ends, or moving through a maze that seems to continue endlessly.

Organisational Learning, by contrast, is an organisational responsibility led by top management. Its purpose is to encourage people to continuously access new information, distribute that information, interpret it, and retain it within the organisation. Organisational Learning ensures that people continuously receive the latest information relevant to their work. Everyone should have access to obtain, distribute, interpret, and discuss information as a basis for changing business practices, strategies, systems, SOPs, rules, and other organisational practices. The organisation also needs to retain this information, much like a library that can be revisited when needed. The accumulated information can then become a reference for analysis, prediction, and the continuous improvement of business practices. Organisational Learning therefore helps an organisation develop effective knowledge management.

So, how about your organisation? Do you already have LO, OL, or both?