Many companies are attempting a radical shift from hierarchical structures to more agile environments in order to operate at the speed required by today’s competitive marketplace.
To successfully transform into a more agile enterprise, companies must make conscious choices about where and how to bring about change. A first move available to the leaders of organizations is to become agile at the top. In order to become more agile, senior teams should do the following:
Treat your enterprise priorities as a managed backlog. At the enterprise level, think of all of your corporate initiatives as a backlog just like how software developers think of future product features as a backlog. See your leadership team as employing an agile software-development framework that prioritizes the backlog based on importance, then tackles each task in sequence until they’re all completed. Reprioritize your enterprise backlog when new initiatives are added and supplement the traditional annual strategic-planning cycle with real-time, issue-based planning, so resources can be allocated more dynamically. Continuous planning can ensure that resources are being directed toward evolving priorities and away from initiatives that have grown less important.
Create small, talent-rich teams working outside the hierarchy to address your most important priorities. These teams are given permission to use agile methods and processes, and to work outside the traditional decision hierarchies. Many leading companies, such as Airbnb, Spotify, Google, Amazon.com and Microsoft, have adopted this approach as a way of managing innovation. When the CEO and his leadership team share a joint table, issues can be worked on quickly in a less formal, less bureaucratic environment, boosting the velocity of decision-making.
Time-box your work and make extensive use of test-and-learn techniques. Working in smaller increments of focused time accelerates decision velocity and overall corporate metabolism. This works well when you have moved from a calendar-based to a continuous planning process. Using test-and-learn techniques with both customers and internal stakeholders allows companies to take minimum viable solutions and iterate on them quickly, abandoning weaker solutions for better ones. This rapid, hypothesis-focused, real-time testing creates early constructive feedback for the team and accelerates the development of solutions.
Take a moment to hold your leadership team and yourself up to a mirror. To become an agile enterprise, you have to start from the top. Senior leadership teams that lead in an agile manner and make high-velocity decisions will see these behaviors mimicked at lower levels in the organization. Failing to do this is the surest way to shorten the life of your company. But, if you develop leaders with the right mindset and an agile approach to management, you can get the maximum value out of your company’s use of its scarcest resources—the time, talent and energy of your workforce.
Eric Garton is a partner in Bain & Co.’s Chicago office and leader of the firm’s global organization practice. Andy Noble is a partner in Bain’s organization practice.