3 Steps for Establishing Organizational Agility
Considering that 72% of executives believe their business model will be under threat within the next five years, the word “agile” has become a buzzword across sectors. Marked by a high speed of execution, adaptability, and a commitment to innovate and find creative solutions, agile organizations are the ones that don’t just survive, but thrive in highly-disrupted markets.
Driving the need for organizational agility is the digital revolution that’s well underway — and all that it encompasses, including emerging IoT products, the rise of expedited ecommerce à la Amazon, and highly-targeted social media advertising — which has elevated existing consumer demands and introduced previously unanticipated ones. These evolving demands, paired with ever-rising commoditization, mean that companies must now deliver innovative products and services faster than ever — or risk falling behind.
Some organizations, like Spotify and Netflix, emerged as immediate leaders in their respective spaces, thanks to their ability to identify a gap in the market — and fill it effectively at speed. While organizations like these are born agile, many more have to make an intentional effort to shift from a traditional model to an agile one, breaking down internal silos, optimizing operations, and designing innovation-focused strategies. However, despite a company’s best intentions, simply implementing an agile initiative is not enough.
According to the Harvard Business Review, “Along with the many success stories are some disappointments. For example, one prominent industrial company’s attempts over the past five years to innovate like a lean start-up have not yet generated the financial results sought by activist investors and the board of directors, and several senior executives recently resigned.”
To implement a successful, long-standing agile operating model, leaders must go beyond operations and strategy and get to the heart of their company culture.
Achieving Organizational Agility Through Greater Accountability
The head-spinning rate of change that companies must adapt to has an all-too-common consequence: change fatigue. Change fatigue occurs when the need for continual change leads to mental burnout and apathy among employees. When burnout happens, innovation and problem-solving stall.
This is where a culture rooted in accountability comes into play. Accountability, as defined by the New York Times bestseller The Oz Principle, is the “personal choice to rise above one’s circumstances and demonstrate the ownership necessary for achieving desired results.” In a workplace culture with high levels of accountability, employees feel connected to the purpose of their work, enabling them to recognize gaps in performance, take personal ownership for closing those gaps, deliver innovative solutions, and take action.
According to our Culture Advantage Index, these accountability factors — high levels of psychological ownership, creative problem-solving, and effective-action taking — are directly correlated to accelerated speed to market, greater growth, and increased agility in adapting to change.
These three steps can help leaders foster higher levels of accountability and ensure every employee is committed to taking personal ownership for delivering results at speed:
1. Kickstart Organizational Agility With Results Planning
In order to take accountability, employees must know exactly what it is they’re being held accountable for. Key Results are the benchmarks for which all employees must be held accountable, regardless of their specific job title or role.
Clear, targeted Key Results are essential in any organization that wants to achieve greater speed-to-market, maximize profit margins, gain greater investor buy-in, or minimize safety hazards. Leaders are responsible for identifying Key Results, actively communicating them across every level of the organization, intentionally aligning teams around them, and implementing processes for continually inspecting whether or not they are being met.
Take this example: when a multinational manufacturing company needed to achieve significant growth in earnings before interest, taxes, depreciation, and amortization (EBITDA) within five years, they knew it would require a new, innovative, agile operating model.
The leadership team assessed the current situation — a company culture defined by silos, in which employees rarely stepped outside-of-the-box to identify new solutions and innovative ideas. They next identified targeted Key Results around EBITDA growth. These were communicated through company-wide meetings and embedded into every email, meeting and one-one-one exchange possible, clearly outlining the goals all employees must strive to achieve in order to necessitate much-needed organizational growth.
2. Shift Existing Employee Beliefs
Employees’ daily experiences form their beliefs, which are then manifested in the ways they think and act. This is the basis of The Results Pyramid, a model of human behavior described in Change the Culture, Change the Game in which experiences shape individuals’ beliefs, which inform actions that, in turn, generate results.
In the case of the manufacturing company identified above, leaders facilitated this second step by engaging all employees in workshops that identified how creative problem solving and innovation could be used to facilitate higher results — for example, removing extensive wait periods between phases of product production to generate greater efficiency.
These workshops created experiences that shifted existing it’s not my problem and that’s the way we’ve always done it beliefs, emphasizing speed, flexibility, and the need to achieve organizational results. To further support these experiences and align with their new agility best practices, leaders ensured their actions facilitated the necessary changes. They updated communications and purchase requisition systems, as well as the hiring and performance management processes, to ensure only the most reliable and efficient processes and systems were in place, helping the company further streamline operations and foster greater agility.
The results speak for themselves. Instead of achieving their Key Results by their five-year benchmark goal, the organization reached them in under three.
3. Create Greater Employee Engagement
In competitive and rapidly-evolving markets, fostering employee engagement — whether through workshops, like the manufacturing example we’ve recounted here, company-wide meetings, or individual recognition — is more important than ever. According to data from the Partners In Leadership Culture Advantage Index, engagement is a direct result of accountability — organizations in the top 85th percentile of accountability ratings see 58% greater employee engagement. At the same time, 93% of those whose organizations are in the top 85th percentile say their coworkers will do whatever it takes to achieve results.
The business results of this are hard to beat. Since accountable employees are engaged employees, accountable employees are more inclined to proactively identify problems, take ownership for solving them, and develop creative solutions, all of which form the foundation of an agile organization.
Think of it this way: a frontline team member at any large manufacturing company could easily get lost in the sea of employees. However, if they see how their work directly ties into organizational success and that they have the power to catalyze change, they are more likely to feel in control of and engaged in their work. Companies with highly engaged workforces outperform their competitors by upwards of 145% of total earnings per share. In other words: employee engagement is essential to driving profits and remaining viable in today’s market.
Laying the Groundwork for Success
Cultivating a results-focused, innovative, agile leadership team prepared for any market disruption demands an equal focus on both strategy and culture. When leaders clearly identify Key Results, shift existing cultural beliefs, and engage employees, they lay the groundwork for a highly-accountable, agile workforce that can thrive in today’s modern marketplace.
Accountable employees come together to form innovative, high-performing teams that deliver on their promises. These teams consistently succeed because they identify problems early, take psychological ownership of these problems, and collaborate to develop creative solutions and achieve desired results, thus driving organizational agility. In fact, organizations in the top quartile of accountability as measured by Cultural Advantage Index experience 27% faster execution and 30% greater adaptability.
Now it’s possible to quantify levels of agility in an organization. The Culture Advantage Index measures critical indicators of accountability — including levels of feedback-seeking, psychological ownership, creative problem-solving, and rates of effective action-taking. By providing visibility into these metrics, the Index provides leaders insights to determine if they are focused on the right problems and positioned to handle change; if their employees have a solution-focused mindset for solving challenging problems; if teams are troubleshooting efficiently; and if effective action is being implemented in order to deliver results at speed.
The new Partners In Leadership Culture Advantage Index is the only tool on the market able to quantify levels corporate mindset and accountability — and prescribe actionable insights for improved performance. Learn more here.