When faced with business challenges, the response is often that companies need to be more agile. But what does it mean and how do you increase agility?
Dynamic organisations face many challenges. Whether it’s the war for talent, currency fluctuations, trade tariffs, aggressive competition or digital transformation, there are many barriers to growth. Complicating matters, it’s hard to avoid turning into a business where there are multiple channels of command to go through before a decision can be made. So, what’s the answer? Well, one solution that is gaining traction is that organisations should adopt 'agile working’.
Agile businesses are structured to react quickly to changes in its environment to reduce risk or seize opportunities. Their teams often work autonomously, but collaboratively, to develop products and services, while goals are short-term and teams work towards them in ‘sprints’.
An agile leader, meanwhile, is able to lead well in a wide range of circumstances, especially new, changing and ambiguous situations. Not surprisingly, agility has gained popularity due to the increasing pace of economic, political and technological change.
One business that has been successful in adopting a highly flexible approach is UK translation business thebigword (see case study). Like an increasing number of businesses around the world it re-evaluated its business model after wondering how it could emulate the speed, dynamism and customer centricity of the digital players.
For Ron Polito, National Managing Principal at Grant Thornton US, business agility is non-negotiable. He says: “You don’t need to look far back in history to see what happens if you’re not agile. You could take numerous examples of companies – even whole industries – that have disappeared. If you compare the current Russell 2000 companies [i] to those of 10 or 15 years ago, they’re a totally different set. To me, that shows agility isn’t a luxury, it’s a business imperative.”
Alan Dale, the Partner at Grant Thornton UK who leads on business consulting with a focus on business transformations, agrees: “We tend to hear it in terms of a cultural shift and how do we move away from a functional, top-down structure.”
He says: “If we look through the lens of POEs, they are rarely agile and for them it’s about creating a mindset shift. The first step is for the owner or founder to understand the need for agility, or at least more agile thinking, and what that means at a practical level.” A quick check for organisations is to review whether they have long-winded and bureaucratic processes. “Those firms need to find part of their business where they can introduce an agile approach and have a laser-like focus around it,” says Alan.
“That initial shift is vital. If you think of a classic structure based around functions, where teams don’t change and there are long life cycles around new products and new markets, where organisations do lots of research and testing before they change things… they need that change in mindset first.”
Ron agrees: “You need to have this conversation with your leadership team. It’s explaining that if they do the same things, they’ll get the same results. If they want different or better results, they need to change their business model to keep up with the environment and the competition so that they don’t turn into Sears, Kmart or Blockbuster.”
In terms of taking the plunge, Ron says: “It’s important to make sure there is a relatively small leadership team with the right experience that is quick to make decisions. I would also look at culture and allow employees to feel empowered and have some autonomy. I always say guidelines are better than rules. And then I would look at their business model and try to reduce complexity.”
“Another thing I would look at is the talent and diversity within the talent pool. Companies need to leverage diverse thinking and skills. What can we learn from the younger generation of talent we’re hiring? They think differently, they are more impatient, they want quick results and there’s a lot to be learned from the talent.”
Ron is also keen to stress that companies need to focus on the external environment. “I’d suggest that organisations set aside an independent group or team to innovate, assess the marketplace, the competition, innovation, technology and to think about what it is to become the firm of the future. That thought leadership is then injected into the main company to keep it from falling apart.”
It’s important to stress that agility does not mean becoming agile in every part of the business. Alan explains: “You can have agility around new ideas – for example, in the sales function you could look at new ways to sell or have a new offer or price discounts around a certain thing, using the concept of ‘failing fast’. But you can’t introduce agility across every part of the business at the same time. It just wouldn’t work.”
He cites the example of a retail firm, which could become agile at developing new products, perhaps looking at market testing in a rapid way and engaging its supply chain in an agile responsive fashion.
“You find the things that sell well, really put the rocket booster behind them and when you find the things that don’t sell well, turn them off, fast. A common challenge is how to do that when a lot of your supply chain is in the Far East. How does agile fit into a six- to eight-week shipping timeframe?”
Ron adds that the greatest impact comes from targeting the front office and operations. “The back office can have an impact, perhaps by implementing new technology within the organisation. But the main focus should be on the leadership team, talent, culture, mission and purpose.”
Don’t be fooled into thinking agility is a cure-all. Alan warns: “There are drawbacks. It creates uncertainty for those people who want to know what their role is, where their career is going and what they’re doing Monday to Friday. They can find it hard to work in a more agile environment. It makes it harder to chart a career path and to define people’s responsibilities as they change in response to the needs of the market and the business.
“Millennials tend to be more comfortable with the agile mindset. It offers a creative environment where you’re meeting new people and it’s short, sharp, focused work, whereas a more mature workforce might find the uncertainty hard to deal with.
But it seems to be a change that more organisations are looking to adopt. As Ron says: “Everyone’s watching what the likes of Amazon are doing. People are scared by the speed of change and innovation that’s upon us, in that if we don’t react, if we don’t change, if we’re not agile, we just won’t exist.
“And it’s the CEO in particular who needs to be looking externally. To be thinking about change and to be communicating that message to the wider team.”
Grant Thornton’s Ron Polito and Alan Dale have picked out the following five key points for business owners when considering a more agile approach:
For fast-growing translation business thebigword, agility means being flexible in all things, from working hours to cash flow and even the directors’ attitude to being paid. It’s proved its worth as few businesses have such extraordinary demands.
CEO Larry Gould cites a contract with the Ministry of Justice that might have overwhelmed another company: “We had six months to find 3,000 linguists, 140 full-time staff and 60 temporary staff. The contract talks went on so long the timeframe was reduced to 11 weeks,” he says.
How was it accomplished? “It comes down to agility. We have flexibility in everything we do. When staff need to work non-stop they’ll do it. We also have a contract with NATO and they call at 3am you can’t ask them to call back in the morning.”
After 38 years of running thebigword, Larry has developed some remarkable ways to maximise this flexibility. “We recognise that people want more than money. We pay overtime, but we give them their time back. Staff get a week more holiday than the industry average. We also offer true flexible working hours. Some 95% of maternity leavers come back because of our attitude to flexible working.”
The approach to cash flow is similarly agile. For example, when investment is needed, directors forgo their bonuses: “We realised a few years ago that we needed a big push in technology or we wouldn’t win as many contracts. The board agreed to sacrifice their bonuses to free up the cash. That investment is one reason we are performing so strongly,” says Larry, adding that in the year to May the company grew turnover from £42 million to £60 million. The plan is to grow further to £120 million within three years.
There are no guarantees in business, but Larry believes the agility fostered throughout the company will keep it on target.