Organizational Agility: What It Is and How to Build It

Change is constant and inevitable. Organizations struggle, adapt, and reorient strategic objectives, market goals, and workforce in the face of rapid change and an uncertain climate. Understanding organizational agility is one of the first steps toward preparing your organization for future growth and inevitable change.

Key Takeaways

• Organizational agility is an organization’s ability to adjust quickly when competitors, technology, or market conditions change.
• Organizational agility focuses on the speed of changing direction, while flexibility is the capacity to do different things with the same resources.
• Too much flexibility slows decisions, and too much fixedness makes change difficult, so agile organizations balance the two.
• Three practices build organizational agility: hiring and inspiring with core values, creating a culture of learning and growth, and staying opportunity oriented.
• Leaders improve agility by encouraging internal mobility, eliminating conflicting priorities, retiring decision bottlenecks, and delegating decisions to the owning teams.
• Agile organizations adapt to changing markets, support faster internal change, and deliver more value to customers.

What Is Organizational Agility?

Agility is a hot topic these days. Leaders use the terms "agile" and "agility" in boardrooms and at conferences, but what do they mean? Organizational agility is an organization's ability to adjust quickly and revitalize itself in response to a rapidly changing, uncertain, and chaotic environment. Boardrooms are well-prepared to demonstrate a high degree of agility when they adapt to emerging competition, new technology, and shifting market conditions. At its core, agility refers to an organization's ability to respond to change.

Agility vs. Flexibility: Finding the Right Balance

It is essential to understand the difference between true organizational agility and what so many organizations think agility means: flexibility. Organizational agility focuses on the speed with which an organization can change directions, while flexibility is the capacity to do different things with the same resources. Flexibility is an integral part of an organization's overall agility, but it has downsides and can sometimes reduce workflow efficiency.

“At its core, agility refers to an organization's ability to respond to change.”

Agility Requires You to Balance Flexibility with Fixedness

Fixedness reduces variability. It allows a team to focus on specific goals and become well-versed in executing all aspects of their functional area, including using the best processes and tools to perform their particular function. However, fixedness can create inefficiencies when it impedes a set process, tool, or team member.

To begin assessing your organization's agility, you must first understand where you can stretch existing resources and goals to do new things in new ways. You must also identify what needs to stay the same to enable faster adoption and productivity. Too much flexibility can slow decisions and processes. Too much fixedness makes it difficult to change in response to new information.

How Can You Improve Organizational Agility?

While change doesn't happen overnight, setting some goals can help clear a path for organizations to increase their agility and create a more responsive workplace.

Hire and Inspire with Core Values

Successful organizations focus on creating a work team that demonstrates an ability to collaborate, respond to change, and act resiliently. This goes beyond hiring employees with specific skill sets or work experience. Using an organization's core values as a guiding principle will often help hiring managers and recruiters read between the lines of resumes and find candidates who will align with the organization's true purpose. Strengthening individual and organizational performance through an authentic, unified vision makes it easier to build teamwork and accountability and fight workplace fatigue.

Adopt a Culture of Learning and Growth

Agility requires organizations to invest in continuous learning for their employees and build a culture of discovery. Teams should feel that regular analysis is an excellent way to increase the value of their work. Team members at all levels should be able to make mistakes and, more importantly, learn from them in an open environment. Leadership and decision-makers should regularly ask: "What have we learned lately, and how will that help us deliver more value to our customers?"

Stay Opportunity Oriented

A cornerstone of the agile mindset is an organization's ability to recognize changing market conditions and new opportunities and react quickly to beat the competition. As emerging technologies reshape operations, organizations may also need to establish agile governance for AI. An agility-focused workplace culture makes it easy for all team members to share ideas, develop new strategies, and execute them quickly. Leadership should encourage the "entrepreneurial mindset" in the workforce for customer-facing work and internal initiatives that add value.

What Role Does Leadership Play in Agility?

Organizational strategy and culture are only sustainable if they start at the top. Leadership should focus on the following to help improve agility within an organization:

• Promote internal mobility, encourage cross-functional assignments, and break down silos.
• Shift people and resources quickly, rapidly disassemble and reassemble teams to share ideas and talent.
• Inform strategic alliances; facilitate buy-in and break down resistance from strategic partners and external resources engaged in the change process.
• Eliminate conflicting priorities (especially those that do not align well with the strategic priorities).
• Retire outdated bottlenecks in the decision-making process, reevaluate decision-based safeguards, and delegate decisions to the owning teams wherever possible.

What Are the Benefits of Organizational Agility?

In the long run, agile organizations are well-prepared to:

• Adapt to changing market conditions and evolving workforces.
• Stretch existing resources and the organization itself to do new things in new ways.
• Support faster change within the organization.
• Add the most value possible to the customer, keeping the organization strong and, ultimately, profitable.

How to Start Building Organizational Agility

Taking the initiative to assess your organization's agility represents the first step in a growth-oriented strategic redesign. As organizations look ahead and face change head-on, they must reflect on their agility and build a clear vision for the future. Contact us today if you need help assessing where your organization needs flexibility and where it needs fixedness.