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Organizational agility: The new challenge for SMEs

14 September 2016 by National Bank
Organizational agility: The new challenge for SMEs

To maintain their competitive edge in an evolving market, companies need to constantly adapt. By making them more flexible and responsive, organizational agility gives them a head start and improves productivity.

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For SMEs, the “agile” approach can prove particularly useful. Its main characteristics are flexibility, reactivity andadaptability, all of which can help companies seize business opportunities in a changing and unpredictable market.

The background

Originally developed in the early 1990s, the concept of organizational agility quickly gained currency as a way of increasing competitiveness, and was adopted by many large tech-based companies, including Microsoft, IBM and Motorola. This business model is particularly well-suited to organizations that face complex, uncertain and turbulent environments. Companies operating in sectors such as information and communications technology (ICT), biotechnology, engineering, and consulting have to be extremely innovative to keep pace.

Agility 101

“The agility concept is rooted in the principle of continuous improvement and the search for added value. It fits in perfectly with the philosophy of lean management, from which it borrows several elements,” explains Alexandre Paradis, former member of the Board of Directors of Agile Québec, an organization that promotes the use of agile practices.

In broad terms, the agile process is based on step-by-step progression. This allows companies to track their projects in sections as they move along, which can help to avoid costly errors when a business plan misses its mark. “Take the example of a company that wants to create an Internet site that will provide a forum for tennis players to interact with one another. After the site is launched, the company finds that the market has little interest in this type of product, but does have interest in a platform for booking municipal tennis courts. If the company had used the principles of agility, it would have been able to test small portions of the project as it unfolded and reposition itself as needed,” says Paradis.

An SME or a start-up is therefore well-advised to adopt an agility strategy, including frequent re-evaluations and repositioning according to demand. “It’s critical to not presume what a customer’s needs are, but instead to answer those needs at every step by aiming for small, fast deliveries. This allows you to adapt on the fly, while keeping an eye on what the competition is doing so that you’re not left behind,” explains Jean-François Lafrance, CHRP, Senior Advisor, Strategic HR Planning, at National Bank.

How to get agile

There are many ways to put a company in agile mode. These methods provide a framework and milestones for the process, and they include specially adapted tools.

The Scrum is the most widely used method. It provides a method-based project-management framework by defining everyone’s roles, and a schedule for iterations and meetings, etc. Since agility is heavily based on the principle of frequent re-evaluation, a team will prepare a list of tasks that must be carried out in a short period of time, known as sprints (or iterations). At the end of each sprint, a retrospective (or post-mortem) is held to analyze efficiency and see what the strategy should be moving forward.

Kanban (a Japanese word meaning billboard, sheet or label) is one of the most commonly used agile tools. On the Kanban taskboard (typically a whiteboard), Post-it notes are placed and moved around according to the degree of completion (to do, in process, done) of various tasks that are to be accomplished as part of the sprint.

A daily “scrum” – a short meeting of about 15 minutes – is held to determine how the project is coming along and what the day’s priorities are. “All participants discuss the challenges they face and ask for help if they need it, which builds a collaborative spirit within the team,” says Lafrance.

Successful implementation

Proper training and support of personnel are the best guarantee of success when a company decides to go agile. “The concept of organizational agility has four key principles that run counter to our traditional ways of managing: autonomous teams; management principles rather than rules; individuals who collaborate and aren’t afraid to make mistakes, supported by a culture of openness and trust; and leaders who are able to look at themselves in the mirror,” says Philippe Mast, co-founder of CORTO.REV, a consulting and executive recruitment firm that specializes in organizational development and innovation.

The change has to be made gradually. “Above all, you need to establish tools for thinking about the team’s work culture (autonomy, teamwork) and the company’s leadership style (delegating, etc.) to properly carry out the shift to organizational agility,” says Mast.

To generate true added value, agility also has to be applied in depth rather than just superficially. “Implementing tools in a superficial way, for instance by setting up a Kanban board without making changes to your processes, simply won’t work. That’s just like holding regular briefings that never lead to any type of action,” adds Alexandre Paradis.

Piling on too many tasks in a sprint is another common error. “The faster and more efficient the delivery, the more added value is created. Conversely, wasted time is expensive – it’s the one-piece-flow principle,” says Paradis.

Employees are key

Organizational agility represents a revolution in the way we work. In agile mode, teams work autonomously and collaboratively, they are more empowered and are much more frequently in contact with customers, whose feedback can continuously shape a project.

But there are challenges for employees: “You need to be humble, be willing to accept feedback from clients and the rest of the team, be versatile, flexible, able to adapt permanently, work with others, etc. People who like stability, constant support and a highly structured environment will likely have difficulty adapting to agile methods,” warns Mast.

As for leaders, they must adapt to a new business model. “Their role changes: They’re no longer there to lead – they become contributors or facilitators. It’s the same as with entrepreneurs who have start-ups. They need to establish strategies to grow the company, gather data to improve the team’s performance and bridge the gap with the rest of the company,” says Mast.

To successfully implement agile methods, Mast says, “you first need to make sure that all the team members and their leaders understand why these measures are being adopted. To increase productivity, be more innovative, better satisfy the customer?” After that, it’s best to proceed step by step. Agility isn’t for everyone or for every company. “Often, you begin by putting together a team of people who are willing to make the change and who have the necessary qualities. Once the plan has shown some success, other employees will be interested and will want to get with the programme,” says Mast.

Finally, keep in mind that the one-size-fits-all philosophy does not apply to organizational agility. There’s no universal recipe for success. It needs to be adapted to the company, to the type of project, to the number of employees and so on. Indiscriminately using one method, just because it has worked elsewhere, can be a costly mistake.

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