by Diana Bersohn

5 starting points for agile transformation

Feb 11, 2021
Digital TransformationIT LeadershipIT Strategy

Legacy systems and complexity can make agility difficult, but not impossible. Here are five steps any company can take to achieve agility.

Agile Project Management
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The COVID-19 pandemic forced companies to move quickly to shift to remote working, reimagine how they serve customers, build new business models, enhance technology capabilities, assemble multi-disciplinary teams and expand partnerships and alliances in ways they never thought possible. Now, companies need to figure out how to keep that momentum and maintain the speed and agility they gained in a world shaped by changing customer demands and ongoing economic uncertainty.

At the heart of the issue for many companies is an outdated operating model that is too big and too slow to respond to major market and competitive changes. According to Accenture research, 85% of C-level executives say they are not very confident that their operating model can meet shifting strategic priorities. Companies need operating models that propel new strategies aimed at boosting growth and innovation. Our research also shows that the long-term EBITDA growth for truly agile organizations is 16%, compared with 6% on average for non-agile organizations.

Last year, I discussed how to reimagine your organization as an intelligent enterprise by using technology in new ways, adopting agile ways of working and transforming value chains. While it’s clear the intent is there, and company leaders are working toward putting in place intelligent operating models, many still aren’t fully achieving the speed and agility they desire. In part, that’s because they’re getting caught up on several misperceptions of what it takes to undergo agile transformation—the biggest one being that they need a blank canvas.  Yes, it’s true that legacy systems and complexity can make agility harder to attain, but it doesn’t make it impossible. Here are five key starting points that companies can take to achieve agility even without a clean slate.  

Targeted experimentation

Controlled experimentation is a great path of choice for companies that have more traditional operations and can’t immediately establish the necessary buy-in for new ways of working and technology. Prove first; then scale. Looking at ways to “hack” the organization and use data to experiment with and continuously improve the organization.

Reimagine a function or cross-cutting activity

Hone in on the work of one area that is not performing and put your effort into reimagining that specific part of the business—for example, a function such as finance or customer service or a cross-cutting activity such as sales and operational planning. Taking a deeper look into just one area of the business will allow you to understand specific issues—it may be due to “muscles being in the wrong places” or simply the function is too big, slow, and complex.

Turn to your ecosystem

Competitive muscle comes as much from what can be harnessed outside—across partners, suppliers, and adjacent companies—as it does from what’s within. If your company is lacking the leadership, skills, and technology to work in new ways, you can look to an ecosystem partner to build the necessary bench strength at speed. This is a great starting point and ultimately you may decide to bring these capabilities back in-house.

Acquire or rent

In addition to leveraging ecosystems, companies should also look at opportunities to buy new capabilities and infuse them back into the core. This is particularly effective for companies with strong integration experience. In the consumer-packaged goods industry, for example, many companies are acquiring direct-to-consumer businesses to meet new consumer demands instead of building them from scratch.

Consider a greenfield business unit

Establish a greenfield unit alongside current businesses that applies intelligent operating model characteristics from scratch. You can do this when setting up a new digital offering, product, or service or where it’s not possible to get the current organization there quick enough. Ultimately this unit could be a model for the existing customer base and more of the traditional enterprise can be migrated to the new model. For example, to improve the guest experience with new technology, one entertainment company stood up a separate digital business consisting of a set of domains that worked solely on this program. Each domain was organized around a specific product or customer experience. For this new digital business, the company met its three-year performance goal for consumer adoption in less than six months.

No matter what the future holds, agility will be critical for all organizations. Companies have an incredible opportunity to shape a mindset of bold business transformation powered by new approaches to technology and responsible leadership. It’s time to design organizations with agility embedded across the enterprise—and those that do will be better able to respond to increasing demands and adapt to changing markets.