What Is an Agile Organization?

As the world continues to adapt and evolve at a rapid pace, it’s more important than ever for companies to get accustomed and comfortable with change. Otherwise, companies that are deeply ingrained in traditional operational processes and structures risk falling behind. To keep pace with continually changing market conditions, shifting customer priorities and preferences, disruptive technologies and more, embarking on an agile transformation will help companies thrive–now and into the future. This article will dive into the advantages of becoming an agile organization and what companies can do to instill an agile mindset within organizational culture. 

Defining Agility 

Agility is the ability to move quickly and easily, especially in response to an external stimulus. When an organization is agile, it can react and adapt quickly to changing circumstances. Typically, an agile organization will be both reactive and proactive; able to effectively respond to changing market conditions while also being able to anticipate future business needs. As a result, agile teams and organizations have established systems and processes that enable them to spend more time delivering innovative solutions. 

While not every agile organization looks the same, they often place a great emphasis on customer needs over profits, empower and streamline teams with technology, learn and make decisions quickly and create a united organizational culture with a shared vision. Without these measures in place, organizations can often struggle to adapt management styles, processes or outputs fast enough to respond to market fluctuations. As a result, these companies are left behind when compared to agile counterparts and may have a difficult time seizing new opportunities within the market. Rather than seeing an evolving market as a threat, agile organizations are always ready to respond and uncover new opportunities they can leverage for business growth.  

Why Build an Agile Organization? 

For nearly a century, businesses that operated as machines dominated their industries and outperformed competitors by establishing a hierarchical and highly specialized structure. However, as digital transformation has placed its firm grip on businesses and economies around the world, more and more companies are finding it more challenging to succeed with this outdated machine model.   

Now, businesses are forced to contend with rapidly shifting demand patterns from all stakeholders, the continual introduction of disruptive technologies, an accelerating pace of digitization and greater competition among employers to attract and retain talented employees. Very few of the traditional “machine” organizations from the last century have been able to maintain a dominant position in their markets.  

In the modern business environment, building an agile organization means balancing stability with dynamism. On one hand, organizations with a stable, slowly evolving backbone supporting dynamic capabilities that can respond to evolving markets and seize new opportunities are better positioned for long-term success. Because agile organizations are better equipped to achieve faster time to market, engaged workforces, higher revenue and more, completing an agile transformation is a top priority for many organizations.  

Elements of an Agile Organization 

While no two agile organizations may look the same, there are many characteristics that they share. On their own, each element of agile teams has significant merit. However, when each element is strategically combined, the elements create a dynamic organization. These elements don’t just work together to improve organizational agility, but they also change organizational culture for the better. Typically, organizations that implement elements of agility have stronger long-term performance and can perform well under pressure. Let’s dive into the elements of an agile organization.

Shared Purpose and Vision 

Undergoing an agile transformation begins by defining the shared purpose and vision that will guide all stakeholders. Often, as organizations uncover new ways to create value for diverse ranges of stakeholders, these organizations begin to develop distributed, flexible approaches to create value. These value-creation methods are often modular, offering both stability and the variety needed to meet wide client needs.  

However, because value-creation models are often distributed, agile organizations need to establish a shared purpose and vision to unite teams and enable employees to feel emotionally invested and engaged. This aspect of building an agile organization is especially valuable as more and more employees are looking for careers that can provide a sense of purpose and meaning, When this purpose and vision are at the heart of business decisions, it creates an organizational culture where people are encouraged to seek stakeholder feedback, proactively watch for evolving customer needs and look for opportunities serve customers better.  

Shared purpose and vision enable organizations to create clarity across the organization to drive better results and optimize resource allocation towards areas of growth. This alignment is key for driving motivation and engagement while helping agile teams respond to uncertainties and challenges within the market.   

Network of Empowered Teams 

Rather than creating an environment where it’s assumed that employees have no idea what to do and need constant management to avoid chaos, agile organizations seek to empower their teams. Instead of a traditional hierarchical structure, an agile transformation seeks to create a network of empowered, scalable teams. With this approach, team members are given clear responsibility and authority, thus, driving engagement, innovation and results. These team networks are effective because efforts can be organized in a manner that balances individual freedom with collaboration.  

For these agile team networks to be successful, companies should cluster teams into performance groups based on a shared mission. Then, within each team, roles should be clearly defined to provide team members with greater accountability and focus to get things done rather than waiting on approvals or navigating duplicate roles or responsibilities. Teams should also be encouraged to work with external partners such as customers, vendors or government entities who can contribute insights and ideas that can spark innovation and identify opportunities for the organization.  

The power of these teams is that they have greater autonomy, are generally multidisciplinary and are easily scalable to meet evolving business needs. Agile teams can take various forms depending on the specific business processes they are built to address.  

Quick Decision-Making and Constant Learning Cycles 

In a traditional organization, typically only senior leaders are tasked with making decisions and defining the direction of the company. For an agile transformation to occur, this mindset needs to shift to embrace uncertainty and prioritize speed and productivity. Within an agile organization, experimentation, rapid iteration, and continuous learning are key elements of the organizational culture; thus, enhancing its ability to innovate and create new value for stakeholders. In some instances, this may mean shifting away from a traditional annual planning and budgeting approach towards quarterly budget cycles or other dynamic management systems.  

In practice, agile teams may aim to produce a single primary deliverable in a short timespan while having frequent check-ins to share project updates, troubleshoot issues or verify alignment. This quick approach is made more efficient when organizations establish standardized frameworks to streamline communication and collaboration between teams. Teams are further empowered by having transparent information access so they can easily access and share needed information. 

Agile organizations also encourage team members to continuously learn from successes and failures to grow. In addition, there should be an emphasis on building on new knowledge and skills that team members obtain in their roles. Continuously learning and improving gives agile teams the ability to seize more opportunities and stay ahead of the competition.  

Leadership that Empowers Individuals 

Traditional operational models can fail because leaders feel the need to exert control and direct work to achieve desired business goals. However, agile organizations take a different approach. In agile models, leadership focuses on empowering teams and instilling confidence that these teams will drive the organization closer to achieving its goals and fulfilling its purpose.  

With an organization’s people placed at the heart of the organization, they are empowered to quickly create value and efficiently collaborate across the organization. Rather than viewing leaders as directors or controllers, agile organizations choose leaders who are visionaries and coaches who can empower and encourage people to deliver outstanding results.  

This type of leadership is effective at building a common culture and reinforces positive peer behavior to establish trust and cohesion throughout the community. When people are empowered and supported, they are motivated to act as team players and contribute to strategic decision-making processes that will affect both their work and the organization as a whole. 

In addition, because these team members are supported, valued, and encouraged to be their best, they are engaged in what they do and have greater satisfaction. At the same time, this element helps to attract talent that shares similar passions and is driven to achieve excellence. 

Utilizing Advanced Technology 

Rather than viewing technology as a supporting capability, agile organizations see technology as an asset to be seamlessly integrated into business processes to unlock value and quickly respond to evolving stakeholder needs. Traditional products and services will also likely require digitization to meet customer needs.  

Thus, agile organizations will need to integrate a range of development and delivery practices for advanced technologies. To be effective, this requires cross-functional teams made up of business and technology employees to develop, test, deploy, and maintain new technologies. Within these teams, they should be responsible for implementing various strategies to identify customer needs and quickly develop solutions.   

Beyond responding to customer needs, implementing new technologies helps agile organizations facilitate collaboration and data-driven decision-making. Leveraging new technologies makes it easier for organizations and agile teams to streamline their operational processes, become more efficient, innovate more quickly and respond to change more effectively.  

Customer-Centric 

Agile organizations also seek to create a customer-centric culture that ensures actions and business decisions are aligned with the customer’s evolving needs and preferences. With a firm understanding of who the customer is and what solutions they’re looking for, agile teams can leverage this knowledge as a roadmap to provide guidance and clarity.

Without this mindset, organizations risk delivering products that fall short of customer expectations and needs. However, honing a customer-centric mindset throughout the organization is a useful tool for building customer trust, loyalty and satisfaction. Establishing this kind of relationship with customers is essential for organizations looking to achieve success in a competitive marketplace.

Often, one of the driving reasons that companies seek to undergo an agile transformation is to develop closer relationships with customers. These organizations understand that a customer-centric approach is essential for driving business growth.

Developing an Agile Mindset 

Becoming an agile organization isn’t just to align with the latest buzzwords, it requires a strategic shift in the way organizations think. Shifting away from rigid, traditional business practices and towards a model that views an organization as a dynamic, living entity is what enables organizations to undergo the transformative shift towards agility. To create an agile organization, typically its people and work environments are the primary focus. 

To unite an organization’s people during the transformation, it starts with creating a clear vision and communicating that vision to all employees. United by a common purpose and goals, teams work together to create value for stakeholders and allocate resources to areas that drive growth. At the same time, a cohesive vision enables employees to feel more connected to their work, increasing satisfaction, motivation and productivity. As an organization transforms, it should also identify ways that it can invest in employees. As employees play an essential role in driving the business forward, investing in these team members can make them feel valued, encourage skill development, and incentivize performance.  

On a team level, organizational culture needs to change in a way that encourages participation and provides autonomy. Encouraging participation creates an environment where employees are empowered to share their ideas and feedback with peers and leaders, knowing that this participation is valued and appreciated. At the same time, team members should be given autonomy to carry out their roles and responsibilities, fostering engagement and innovation. 

Companies also need to change their approach towards work environments. One of the most important things to prioritize is progress over perfection. For organizations looking to become agile, there needs to be a shift in mindset away from perfection. Instead, an agile organization should prioritize making progress toward achieving a goal or seizing an opportunity while executing imperfectly, rather than missing an opportunity altogether. Similarly, emphasizing adaptation rather than strict adherence to predetermined plans is another hallmark of an agile organization.  

To become agile, companies must also place a greater focus on the customer and what their needs and preferences are. Having a clear understanding of customers makes it easier for companies to identify opportunities and create solutions to fill these needs.