Why agile operating model transformation can make a difference

15 December 2020 Consultancy.eu
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New research by business transformation consultancy Gate One has offered evidence of value creation from operating model transformation with a focus on ‘agile.’ The findings justify why agile is a priority for nearly 60% of businesses. 

Gate One surveyed 300 senior business leaders in the UK to test the hypothesis that “organisational agility is critical for businesses in today’s rapidly changing world.” The context: Trade wars, Brexit and a global pandemic, to name a few factors causing unprecedented disruption to business. The bottom line, according to the researchers, is that economic stability in now a myth.

Add to this the underlying factors that were already causing upheaval – digitalisation and an increasingly discerning, demanding and changeable consumer base across the world. Under immense pressure, what organisations need is the ability to move quickly and decisively to meet market dynamics. This is where organisational agility comes into play.

Gate One's organisational agility model

“Organisational agility may be defined as the mindset, capabilities and systems that enable businesses to respond faster, repeatedly and more effectively than their competitors when faced with ever-increasing disruption. It is the ability to view this disruption as an opportunity rather than a threat and, ultimately, adapt and thrive in ever- changing markets,” explained David Holliday, partner at Gate One. 

No doubt, changing the entire mindset and framework of a business is a mammoth task, which needs to be broken down into workable parts. The researchers offer three principles of organisational agility that can combine to transform an organisation.

For one, agile means better alignment between all business functions – what the report terms as a ‘connected operating model.’ The principle is that the talent, culture, executive structure, operational processes, tech investments and customer experience of an organisation are all “fundamentally interconnected and in a constant state of flux.” This means bridging the gap between various business functions, and marks a break from the traditional organisational models.

Agile is the focus for many business transformation efforts

Principle number two is reinventing the strategy process, from the traditional one-size-fits-all approach to an ‘adaptive strategy.’ No doubt, a business should have a purpose – set in stone and informing most operations. That being said, business strategies in themselves should allow room to make changes rapidly in response to real world market conditions.

Lastly, businesses must move beyond transformation for transformation’s sake. What they need is a ‘meaningful transformation,’ grounded in data and balanced against concrete business needs and resources. The end goal is to improve operations with speed – preferably faster than competitors.

Gate One reports that these principles combined can add tremendous value to an organisations, and businesses have been quick to grasp the opportunity. The last three years have been a whirlwind for global markets, and it comes as no surprise that nearly 90% of all businesses have been involved in transforming their operations during this period. Standing out is the fact that nearly 60% of these organisations have put agile principles at the centre of their transformation efforts.

Top business transformation benefits

The success of these efforts is backed up by the numbers. Nearly two-thirds of businesses are enjoying more operational efficiency since going agile, while more than half report enhanced product development and innovation. Just under half have actually seen their market share expand – usually the end game for business transformation.

These fundamental benefits come amid a number of other boosts from increased agility, including expansion into new markets, revenue growth, profit growth and cost reduction. Each of these is likely to become increasingly central to business needs as the global agenda grows ever more dynamic. Client Director at Gate One James Cooper highlighted what this agenda might look like.

“More upheaval is on the way with the fourth industrial revolution which combines 5G, the advance of AI, the Internet of Things and the rise of the robot economy. Increasingly urgent concerns around climate change, sustainability and equality are also becoming part of the mainstream agenda. “Businesses must be constantly vigilant when it comes to the drivers that are revolutionising their markets and make sure they have the organisational agility to respond.”