Multiple Studies Look at the Need for and Impact of Organizational Agility
In February 2018, TRACOM released the findings from a new study of Organizational Agility. This study included interviews with senior human resources and Learning & Development executives who identified a significant Agility Gap facing organizations. It found that organizational leaders – both c-suite and HR – had widely recognized the need for agility abilities, but few were actually developing these same skills. Download a summary of this study here.
While the TRACOM research is the latest looking at organizational agility, there are many other studies on the subject. This blog summarizes other interesting data on the importance, need, and impact of agility.
Why Agility Pays
Consulting firm McKinsey has the most extensive research on organizational health which they define as the ability to align, executive and renew itself faster than the competition and thus sustain exceptional performance over time. The company has collected more than two million survey respondents at 1,000+ organizations. The December 2015 issue of McKinsey quarterly uses that wealth of data to shine a light on the value of agility to organizational performance. Specifically they asked questions about organizational speed and stability which helped them identify a small subset of Agile companies. This group represented only 12% of the total organizational population.
They write that “agile organizations appear to be powerful machines for innovation and learning” and they seem “to be strong at motivation.” Their analysis found that these Agile companies had significantly better organizational-health scores which has a consistent relationship to the creation of value including far outpacing other organizations in “long-term total returns to shareholders.”
Read the report here.
Organizational Agility is More a Matter of Becoming than Being
A paper by researchers from The University of Northern Colorado looks at the concept of organizational agility and note that “agility is an ongoing process, much like continuous improvement.” Organizational agility should be considered a “core competency, competitive advantage and differentiator that requires strategic thinking and innovative mindset. Agility thus becomes a business imperative for survival rather than choice.
The paper specifically discusses the role of learning functions in developing organizational agility. Notably they emphasize the importance of developing agility capabilities throughout an entire organization rather than just the top levels. They say that “double-loop learning encourages employees at every organizational level to continuously challenge the practices of the business.” And that “this style of learning is more commonly applicable to agile organizations. This recommendation is consistent with TRACOM’s own research and agility training strategy that a collection of small improvements throughout an organization has greater long-term value than a few big ideas.
Read the paper here.
Success in Disruptive Times
This 2018 report from The Project Management Institute finds that 71% of organizations report greater agility over the last five years. This follows their finding of a significant decline in organizational agility in the 2008 to 2012 when the percentage of “low agility” companies more than doubled and made up fully one-third of all companies. The report credits the agility skill of being able to “take advantage of disruption … and not just react to it” as a crucial factor in organizational success. The capability of “turning ideas into reality” is also highlighted. Finally the report found that 81% of survey respondents said “soft skills are more important today than they were just five years ago.”
Read the report here.
Creating the Organization of the Future
Each year Deloitte conducts its Global Human Capital Trends report and study which included more than 10,000 HR and business leaders in 140 countries for the 2017 edition. This report identified 10 trends in which “organizations will need to close the gap between the pace of change and the challenges of work and talent management.”
“Building the organization of the future” was identified as the most important challenge with 90 percent of respondents say it was important/very important. They say that “agility plays a central role in the organization of the future, as companies race to replace structural hierarchies with networks of teams empowered to take action.” The recognition of this capability was consistently high across organizations of different sizes, industries and geographies.
Yet the report has cause for alarm. Only 11 percent of the survey respondents believe they understand how to build the organization of the future. Similarly while 94 percent report that “agility and collaboration” are critical to their organization’s success, only 6 percent say they are “highly agile” today.
The report concludes that “instead of mere efficiency, successful organizations must be designed for speed, agility, and adaptability to enable them to compete and win in today’s global business environment.”
Read the report here.
Agility: From Ideation to Impact
The need for organizational agility is clear. Fortunately there are options for developing agility. TRACOM offers the Unlocking Personal Agility training course which includes the Adaptive Mindset for Agility Profile. Combined they identify a person’s agility strengths and weaknesses and teach practical strategies that can be implemented immediately. They help people, teams and organizations capture the benefits of agility.
Learn more about Agility training here.