Everyone knows the slogan “Never change a winning team.”
It is true that well-established teams and familiar processes have their advantages, but they also harbour dangers if they are too committed to their procedures. It’s especially important for companies to be flexible in their organization in order to be prepared for the digital future. Yet 70% of digital transformations fail to reach goals. The contributing factors according to Mckinsey include “lack of employee engagement, inadequate management support, poor or nonexistent cross-functional collaboration, and a lack of accountability.” A flexible organization can improve on all of these factors.
Startups, which are naturally flexible and agile, have a clear advantage over large companies, because they are able to constantly adapt to the dynamic environment without having to operate within established corporate structures. In fact, companies and corporations can learn a lot from young startups. Successful startups encourage their employees to try new things and to network with each other in cross-functional, agile teams. A high degree of flexibility in procedures and the abandonment of hierarchical structures are also typical startup characteristics.
In large corporations, rigid structures, a complex matrix or strict hierarchies and processes often prevail—in short, the opposite of agility. At enable2grow, we recognize that silo mentality hinders new ideas and visions and slows down complex decisions. Through more openness and mobility, the infamous silo thinking can be dismantled, and new ideas promoted. From Design Thinking comes the saying “fail fast and learn.” This is based on the idea that errors should occur early in the process in order for companies to be able to react more quickly. Flexibility is key, and not only for startups. This flexibility is only possible through an agile organizational structure.
According to Yves Doz, INSEAD Emeritus Professor of Strategic Management, and Maria Guadalupe, INSEAD Professor of Economics, in agile organizations “employees form small multifunctional teams that are tailored to customers’ needs and empowered to make decisions.” They found teams can move quickly in sprints, enabling faster decision cycles which allows them to adapt to changing conditions and uncertainty.
Additionally benefits of agile organizations include:
- Teams can solve challenges and conflicts themselves, skipping slower “report-up” processes
- New teams can be put together quickly and reconfigured to match project and cusotmer needs.
- Knowledge transfer that can take place across all departments with new formats for sharing and communicating.
- New ideas that can be tried out and further developed quickly
The change toward a flexible organization is challenging but worth the effort. A recent study by Gartner found that companies that allowed more flexibility for their employees saw much higher employee performance levels. Birgit Ströbel, an enabler with expertise in #NewWork, notes that recommends managers “think of your initial determinations as an experiment that can be successively changed as circumstances change.” She advised that even management style needs to adjust for flexibility with the following shifts:
- Lead with principles, not strict guidelines
- Workstreams should be people-oriented instead of office-centered
- Make decisions with employees-involvement, instead of top-down
With feedback from employees you can develop your new structures. Share your purpose for digital transformation clearly to engage your employees in designing and iterating those structures. Research from Deloitte shows that insights gathered throughout the organization help shape your first steps:
- Develop your new organization around systems instead of old org charts
- Identify the formal and informal networks in your organization today
- Look for chances to work toward outcomes, interacting across or around silos
- Use data and tools to increase visibility and transparency so employees can make decisions quickly on their own
- Select a few smaller initiatives that can be separated out from your core business, and begin to run these flexibly – almost like mini-startups
- Test and learn, and share your results across the organization
These first steps enable companies to make space for a new way of thinking—a way that is appropriate for the digitized world and changing markets. Here it makes sense to always keep a market- and customer-centered orientation in mind, while at the same time building up the necessary flexible infrastructure. This makes organizational processes more dynamic, which ultimately benefits the entire company.
For more on how to develop KPIs for digital fitness, download the Digital Fitness White Paper here: https://www.enable2grow.com/en/digital-transformation-challenges/Back to news