We used to say that “cash is king”. Not any more, argues Mike Richardson. Agility is king and cash is just a way of keeping score.
Organisational agility — the ability to deal with rapidly changing circumstances while out-executing the competition and stakeholder expectations — is the core differentiator of businesses these days, whether they are competitors or not. It differentiates the winners from the losers, the victors from the victims and the first from the worst. It determines which organisations survive and thrive, and which don’t. It sorts the best from the rest, separating those businesses which are accelerating their growth, leveraging their value and beating their competition, from those which aren't. Agility has always been a determining factor of sustained business success, among many others, but now it is becoming the bottom line differentiator, between the rubber and the road. For executives, agility is the core differentiator of managers, executives and CEOs from their peers. Team agility is the core differentiator of functions, departments or business units from their peers, as those that seem to execute more proficiently, adaptively and dependably in a team context. Organisational agility is the core differentiator of businesses from their peers. The trouble is that, outside of the domains of IT and software, organisational agility isn’t well understood.
So, what separates the agile from the fragile? The answer lies in dynamic complexity. In his book, The Fifth Discipline: The Art and Practice of the Learning Organisation, Peter Senge said: “The reason that sophisticated tools of forecasting and business analysis, as well as elegant strategic plans, usually fail to produce dramatic breakthroughs in managing a business — they are all designed to handle the sort of complexity in which there are many variables: detail complexity. But there are two types of complexity. The second type is dynamic complexity, situations where cause and effect are subtle and where the effects over time of interventions are not obvious. Conventional forecasting, planning and analysis methods are not equipped to deal with dynamic complexity. The real leverage in most management situations lies in understanding dynamic complexity not detail complexity.”
The devil really is in the detail and, with wave after wave of dynamic complexity washing over us, the devil is also in the dynamics. We live in a constant state of flux, in which everything has become real time, online, all the time. It’s a world of hyper-competition, with the rules, the game and the field-of-play being continuously and disruptively reconfigured. Everyone is wearing multiple hats, serving a multiplicity of projects, clients, opportunities, change initiatives, sites and roles. We are constantly managing a portfolio of plans and re-planning on the fly in response to moving objectives and reshuffling priorities. In these circumstances, traditional approaches to focus, time and priority management don’t work very well any more. The challenge has become much more like an on-going, dynamic process of triage.
Getting organised for agility is a higher order challenge, for which we need to develop higher order executive strengths reflecting an understanding of the anatomy of dynamic complexity. There are three levels:
1. Path Finding
This is about understanding the anatomy of the road we are on, with the mental agility to reframe the landscape ahead and find paths of least-resistance/highest reward for profitable growth.
2. Emotional Intelligence, Intuition and Resilience
This trifecta of executive traits is essential to remaining composed in the face of overwhelming complexity. It’s about leveraging our intellect (IQ) to avoid cognitive overload, deepening our emotional fortitude (EQ) to be resilient and trusting our informed intuition at the intersection of our IQ and EQ.
3. Execution Excellence
In their 2002 book, Execution: The Discipline of Getting Things Done, Larry Bossidy and Ram Charan noted: “For all the talk about execution, hardly anybody knows what it is. They don’t have the foggiest idea of what it means to execute. Execution is not just tactics — it is a discipline and a system. Execution hasn’t yet been recognised or taught as a discipline, whereas other disciplines have no shortage of accumulated knowledge, tools and techniques.
The leader who executes assembles an architecture of execution.” We need a new architecture, system and framework of concepts, models and tools, uniquely integrated, aligned and attuned with the changing nature of our execution and agility challenge.
Think about it. In the driving seat of our cars we have mastered all of this. We have developed the higher order strengths required for driving, able to triage our focus, time and priority management, in the face of dynamic complexity and the agility required. We are able to be strategic and operational, leaders and managers, long-term and short-term oriented, all at the same time, hardly giving it a second thought, at the same time as changing the channel on the radio, making a mobile phone call (hands-free, of course), talking to a passenger, and thinking about life, usually arriving at our desired destination, safely, on time and ready for what’s next. Yet, do you remember when you first started learning to drive a car? We faced an unfamiliar, overwhelming and scary amount of complexity. But look at us now. We have mastered the complexity of driving. It’s increasingly the same in business. As managers, executives and CEOs, of any kind of organisation, our responsibility is to be in the driving seat, individually and collectively. Any shortfalls are increasingly likely to become very evident, very quickly, very fully, and very finally, with few second chances. Just look at the carnage we have seen in business in recent years — banks, retailers and automotive manufacturers among many others. We need to learn to drive again, developing new advanced driving skills for the new normal of business.
This requires 13 disciplines:
Bringing journey orientation into focus. Agility requires a paradigm shift of focus, because change has changed, becoming much more like a dynamic journey on a shifting landscape. The longitudinal dimension of journey-orientation has emerged as a third and primary dimension around which we must reframe our focus and approach to translating agile strategy and agile execution into traction. If anything gets lost in translation, we experience wheel-spin, which can cost us a fortune in lost revenue growth, profitability and cash-flow.
Reinforcing a mind-set of operations management. Paradoxically, agile strategy and execution depend first and foremost on high reliability operations management. In continuous process businesses, errors unfold rapidly and propagate quickly, creating chaos and crises management, which can become increasingly chronic, often with disastrous consequences. All businesses are continuous process businesses to some degree, and high reliability operations management prevents chaos and crises management.
Enhancing strategic productivity. We are used to thinking about productivity at an operational level but not so much at a strategic level. Our productivity at a strategic level depends upon using an integrated framework and set of tools, to avoid overwhelm and formulate a progressive strategy work product. The test of good strategic tools is how quickly we can pick up the conversation next time from where we left off last time. Our agility depends upon it.
Accentuating short-range culture. Accentuating means, to stress or emphasise; intensify; single out as important; mark with an accent. More than ever before, the culture of execution and agility which we need to cope with short-range pressures and performance expectations must be loud and clear to all, with leaders turning up the volume.
Keeping our flight planning envelope expanded. Agile executives spend the right time in the right place at the right time. Our flight envelope is prone to collapsing back to the short-range operational pressures, because of two conspiring forces: the tyranny of the urgent and our unconscious-resistance to the important but more ambiguous and abstract work of long range strategy. This leaves us flying blind; the kiss of death to agility.
Tackling operational productivity. Our productivity at an operational level is about handling day-to-day workflow, among shifting priorities, problems and opportunities. It’s about our time management, priority management, project management and many other related concepts, individually and collectively as a team, driving the fast-cycle communication, coordination and collaboration which are essential for agility.
Holding a recurring, rigorous and rallying strategy process. The essence of agile strategy is conversation; if you don’t have much conversation, you probably don’t have much strategy. Unless we hold ourselves fully accountable, a strategy process can easily become ill-disciplined, open-ended and laborious.
Re-engineering structures, processes and systems. The efficacy (capability and capacity to produce a desired result) of our infrastructure of agile systems, processes and structures is a key, not just relating to our core business-processes, but also our infrastructure of other management-mechanisms, such as meetings. Meetings are a mess in many businesses, subtracting from our agility.
Orchestrating a goal-setting cascade and review process. Agile alignment throughout our business depends upon a well-orchestrated cascade and review process of goal-setting and performance-feedback, balancing the over-engineered rigidity of too much and the organic open-endedness of too little.
Unlocking and challenging mental models. The paradigms, mind-sets, assumptions and beliefs held by you, your team and your organisation are the mental models through which you interpret the world. Old, used-up and out-of-date mental models imprison our thinking and ability to see new possibilities and pathways. That’s cancerous to agility.
Guiding leadership/ communication skills and style. Our style and skills of agile leadership and communication set the tone for our agile culture, creating resonance (or dissonance) with the team-work we desire. We are the role model that our team emulates, founded on our intellect, resilience, emotional intelligence and intuition.
Handling accountability for long-range culture. Our culture regarding the long-range thinking and commitment to advance strategic initiatives can often be very challenging and prone to excuses rather than results. Excuses are rife in many businesses, with everybody buying in at all levels, like a pyramid marketing Ponzi scheme. Dismantling this pyramid by how we handle excuses is crucial, to sustain the accountability we need for agility.
Integrating enterprise execution capability and capacity. The execution capability and capacity of our enterprise is more than the sum of the above parts — though often all of the parts are there but the whole hasn’t emerged. Extraordinary integration is required, to combine the art and science of a unifying architecture of execution. This includes recognising and teaching execution as a system and a discipline, of accumulating knowledge, tools and techniques, broadly and deeply throughout the organisation. Our organisational agility depends upon it.
Achieving agility really is like learning to drive again
Peter Senge, The Fifth Discipline: The Art and Practice of the Learning Organisation (1990)