In an increasingly complicated economic environment of the pandemic, agility is one of the saving solutions. The predictability of astable environment has vanished. The agile approach takes its place. That is, an adaptive approach to the changing context, of rapid development and testing of solutions that are subsequently integrated into a coherent whole.
Started in the IT industry, the agile approach focuses on change and short-term planning. Characterized by multi-disciplinarity, the agile teams are self-organized and self-lead. Company leaders tell team members where to innovate, but not how. And the teams work closely with both external and internal customers.
Ideally, this puts the responsibility for innovation in the hands of those closest to customers, reduces the bureaucracy of approvals and control, accelerates execution speed, increases team motivation. Agility only gives leaders the role of creating and communicating the long-term vision, sequencing the priorities, and building the capability needed to achieve relevant goals.
And yet, it is not easy to be agile after operating in a predictable environment. To ensure that bureaucratic functions do not hinder the work of agile teams and succeed in adopting and commercializing the innovations they develop, companies must constantly promote change in at least four areas:
1. Values and principles
In the case of companies with hierarchical structures, the creation of several agile teams is not welcomed, because the values and operating principles of agile teams will conflict with the ossified structure of the company. This creates a tense working environment, on the one hand, between the majority that defend the status quo and, on the other hand, those who test its limits. In short, supporting the dynamic way of working and financing projects with still unknown solutions will be hit by the majority's refusal. That is why the management team that wants to spread agility throughout the company must instill agile values and principles, including in departments that are not organized into agile teams.
2. Operating architectures
Agile company-wide implementation requires modularization and then seamlessly integration of workflows. Companies like Amazon, Toyota, or Tesla do this. The results? Amazon can deeply and update software several thousand times a day. Toyota is a pioneer in the field. Tesla makes 20 technical changes a week to improve the production and performance of the Model S. Over time, even the routine operations of the hierarchically structured support departments will adopt more agile mindsets. For example, finance departments will always manage budgets, but they do not have to constantly question the decisions of those responsible for agile initiatives. Representatives of the finance function will be in agile teams, will ask hard questions and provide expertise, but will not be in control and will not tell the team what to do. They will play the role of financial coaches.
3. Recruitment and motivation of teams
A company can no longer hire just for the sake of competence. It now needs expertise combined with enthusiasm for working in a collaborative team, lately remotely. There is no practical way to do this without changing human resources procedures. Performance is no longer evaluated based on individual goals, but on the team, performance evaluated based on teammates' feedback, and this is done at intervals of a few weeks. Training and coaching programs encourage multidisciplinary development customized to the needs of each member of the agile team. The reward system considers the group and the recognition must come immediately after the end of the project because it inspires those involved to improve even more and motivates others to imitate their behaviors.
4. Annual planning and budgeting cycles
In bureaucratic companies, unproductive projects deplete the budgets allocated through annual planning, while innovative projects are waiting for a new budgeting cycle to enter intothe discussion for funding. In companies with an agile approach, one starts from the needs of the clients and adjust the budgeting by introducing or eliminating feature in/from the initial project. All without the project manager submit the "paper folder" to the "organizational counter" and waiting for approval in the next budget cycle. Financing decisions are more focused on opportunities to access the potential for successful market discovery. The goal is to find an essential component of the final solution. This leads to a lot of apparent failures, but it speeds up and reduces the cost of learning. Such an approach significantly improves the speed and efficiency of innovation.
Companies that have taken the agile approach, outlined here, are better able to understand changing conditions and priorities, develop adaptive solutions and avoid bureaucratic crises. Revolutionary innovations in bureaucratic companies will be more at the level of adjusting of solutions already tested in agile companies. The agile approach offers measurable improvements in business indicators, not only better financial results, but also greater customer loyalty and employee involvement.
About Constantin Magdalina
ConstantinMagdalina has 10 years of working experience, while he performed in multinationals both in Romania and abroad. Constantin has a master’s degree in Marketing and Business Communication from the Academy of Economic Studies Bucharest. He is certified in Lean Six Sigma and ITIL which provide him a good understanding of processes and transformations within organizations. The Chartered Institute of Marketing certification furthered complemented his expertise and knowledge in business. In those over 4 years of working activity in a Big4 company, he initiated and conducted studies that analyzed different aspects related to the business environment in Romania such as the economic growth predictions of companies in 2013-2016, knowledge management, the buying experience in the age of digital consumers, social media 2013-2015, the utilization of mobile devices in Romania. He is the author of numerous articles on topics related to innovation, the efficiency of business processes, social media, the consumers’ buying experience in the age of digital, trends, and emergent technologies. He is invited as a speaker at numerous events and business conferences.