Survive and thrive with Requisite Agility
29 April 2020
Posted by: Patrick Hoverstadt
“Whenever any animal's behaviour puts it out of touch with the realities of its existence, it becomes extinct”
Michael Crichton, author and filmmaker
For today’s organisations, having enough agility is quite simply the key to survival. Organisations that can’t keep up with the rate of change in their environment will die, and as the rate of change in the business environment climbs, so does the failure rate of businesses [see research from the Enterprise Research Centre].
Requisite Agility is about being agile enough as an organisation – being able to change the business fast enough to survive and thrive in a turbulent world. Sometimes those changes are just fluctuations in demand for what we already do. Sometimes business environments change so much that we have to change the nature and direction of the business to stay relevant.
How agile do I need to be?
There isn’t one ‘typical’ situation where agility is needed – other than the existential one of “survive & thrive” – and there isn’t one typical approach that will deliver it, but the underlying characteristics are universal.
How agile an organisation needs to be, depends on how volatile their business environment is – and sectors vary dramatically in how much they change and how fast. So the first characteristic of Requisite Agility is knowing how much and how fast your environment is changing, because that tells you how agile you need to be – if you’re doing the high jump it helps to know how high the bar is. More than a third of fatal strategic risks come from an area of the environment the organisation hadn’t even thought to look at.
Once you know how fast your world is changing, you need to make sense of that – what does it mean for us? Is it an opportunity or a threat? Do we need a tactical response or a major strategic shift? And sense making requires businesses to keep models of the organisation and their environment up to date, so that when something changes you don’t have to waste time trying to figure out what it might mean.
Making your mind up
These first two capabilities – sensing the rate & scale of environmental change, and making sense of it – are straightforward if they are done on an ongoing basis. They’re hard to do if you wait until you’re in the midst of a crisis. So, armed with a sense of how fast our world is changing and what that might mean for us, the next Requisite Agility capability is decision making. Clearly, if your sensing and sense making are good, it is easier to take decisions well. Slightly less obviously, it’s also quicker. But the speed and quality of decision making is critical. It is not unusual to find organisations that take 4 years to implement a strategic decision, and that can often be speeded up 10 times.
Ultimately, Requisite Agility depends on the organisation being able to change – to shift resources and attention from some activities onto others. Dependent on the scale of change, that might mean more flexibility in operational delivery, but it could mean shifting resources to create a whole new area of business. There are two main aspects to this: autonomy, and the ability to free up resources to do something different. When the environment demands lots of operational change, devolving autonomy helps. When a change in strategic direction is needed, the balance between centralised direction and team autonomy shifts.
In every area – the rate of change of the business environment, the ability to scan for that and make sense of it, the ability to decide what to do and then change the business – organisations differ massively. The speed of decision making in similar situations can vary from hours to years. Even within the same organisation, the agility of business units can differ by orders of magnitude. What each organisation needs in terms of the level of agility and how to improve it varies considerably – there is no “one size fits all” recipe.
The good news is that the degree of agility any organisation needs – how much is Requisite – is not a matter of guesswork: it can be calculated. And once assessed, agility can be improved. Sometimes that is easy, sometimes it is harder, dependent on which aspect most needs strengthening. But even for the hardest areas, it is possible to increase agility of your business by as much as 30x (yes, thirty times).
Guest blogger bio
Patrick Hoverstadt, Director, Fractal Consulting, has worked as a consultant since 1995, working with international organisations of all sizes, in both the private and public sector. He specialises in using systemic approaches, working mainly on strategy, organisational design and organisational change.
Patrick is the author of “Fractal Organisation”, a book on organisation design using the Viable System Model. Published by Wiley in 2008, this book has been used on seven masters programmes around the world. He is co-author of “Patterns of Strategy”, a book on a systemic approach to strategy published by Gower in 2017. He chairs SCiO a group of systems practitioners and is a Visiting Research Fellow at Cranfield School of Management.