13 Sep The Secrets behind Scaling Agility in an MNC
Constant transformation and uncertainty have become new norm, laying huge challenges for companies built to thrive in stable environments. Agility is now a hot topic among MNC executives, as it is a critical capability in determining an MNC’s competitiveness and long-term survival in the 21st century.
The term Agility was coined in 2001 by a group of 17 engineers who came up with the Manifesto for Agile Software Development. Since then, agility evolved from a software development framework (Scrum) to a solution ideation methodology (Design Thinking), a prototyping technique (Lean) and even a mixed-management approach for large organizations (sAFE). All these methodologies are based on the same four principles:
Organizational Agility expresses a company’s set of capabilities for thriving and prospering in an unpredictable and rapidly changing environment. Studies show that organizational agility brings three main benefits: ??improved customer satisfaction, employee engagement, and operational performance. When deployed, Agility leads to result-oriented management, very disciplined project deployment, and flatter organizations charts. This approach is a 180 degrees turnaround from the traditional pyramid setup of multinationals. Could this be the reason why most organizations fail at applying it?
Why do most MNCs engaged in agile transformation fail?
In our 18-year experience accompanying multinationals in their digital transformation, disregarding industry, country of origin, we regularly encounter similar challenges.
1: Top Leadership lacks courage or engagement
Becoming agile is a profound personal and organizational transformation. It takes a lot of courage to advocate for this change, as it requires long term thinking, additional efforts and costs. Change agents within the executive committee face many obstacles: short term thinking & risk avoidance of their stockholders, non cooperative senior colleagues, workload & long hours, habits…. Without clarity over the purpose of this change, and top leadership commitment to lead by example, transformation efforts fall flat.
2: There is no proof that agility will work in your specific context
Your detractors are saying it clearly: Agility can work for startups/B2C companies… but not for us. Our industry/company is too specific/regulated, and we lack control over too many parameters. As long as there is no successful case to prove that agility can work in your context, no one will be willing to risk taking a different route.
3: The company culture is at odds with agile principles
Culture is the legacy and the “immune system” of the organization. An organization’s informal systems (behaviours and beliefs) determine what is encouraged and what is possible to achieve. As Peter Drucker popularized it, “Culture eats strategy for breakfast”. The greatest agility strategy falls short if talents are keep behaving in their old ways.
Sometimes, the issue lies in the little awareness about agility. A lot of the time, talents lack agility skills, being trained for years on watrfall, action plans & KPIs. And even if they do develop theoretical knowledge, they have no experience in delivering agile projects, of navigating through unforeseen situations, and of being comfortable with it.
4: Restrictive & not adaptive systems and processes
Even if talents are on board and shifting their habits, they usually bump into ill-suited systems and processes. From finance to HR, systems are implemented to bring stability & predictability, the opposite of what is needed to build proactive and agile organizations.
Change management requires continuous push & progress driven by change agents in the organization. Skipping steps simply creates more issues of cognitive dissonance and demotivation.
A practical guide to making your organization more agile
URGENCY. Step 1: Create a strong sense of urgency & build your unique vision
Failing to create a strong sense of urgency is the #1 reason why change fails. Change agents need to make the status quo seem more dangerous than launching into a more uncertain future. You will need a majority of the top leadership to be honestly convinced that business as usual is totally unacceptable to get enough momentum for change.
Additionally, you need to draw a picture of how the future will look like when agility has become the norm, with some practical benefits to their own situation. Building a shared vision among the leadership, and articulating clearly why this makes sense specifically in your context, are powerful ways to communicate and embark. Once this vision is clear, make sure to over communicate it. In your effort to make the benefits clear, lean on some of the existing pain points shared by your employees at different levels.
MOMENTUM. Step 2: Deliver results & advertise them
No one will believe you for very long unless results are delivered. Choose an ambitious but realistic project, put a change agent in charge, invest in support until results are delivered. The first pilots won’t be perfect, your team is still adjusting & the organization is not ready to support this new way of delivering results. Management needs to create a particular space for these projects: special attention with regular followup, commitment to remove barriers as they arise, flexibility to give special authorizations and bend processes as needed.
Once you prove agility brings results with a real case, advertise it, recognize the team who made it happen, and call for more projects to be delivered agile. This will reinforce talents’ belief, create excitement around the topics and provide practical experience to support new projects to be delivered. These talents can become internal champions and support the mindset change & upskilling for the next generation.
Don’t drop it after your initial success. Take the time to celebrate and go back to maintaining pressure overtime. Emphasize that this is a milestone, but only one of many on this journey.
CULTURAL ADAPTATION. Step 3: Acculturate your talents
It is easier to start onboarding talents by recognizing what they are currently doing right. Some of your existing practices provide healthy foundations for agility, even though they may not be thought of as agile. Visual boards are already used for project management? Customer interviews are already part of your product development cycle? Team leaders focus on improvement & growth when giving feedback? Encourage and communicate around the fact that these are agile tools, practices & mindsets.
Consecutively, you need to develop new mindsets, correct ill-suited behaviours and replace tools. Explain concretely how they are hurting the achievement of the vision, and provide the necessary training. Some habits are ingrained and some talents won’t be willing to change, sometimes even reacting negatively and, in the worst cases, actively sabotaging initiatives. Be ready to give corrective feedback and go further when necessary.
Changing your culture is not only about articulating & communicating it, it is mainly about living it. Training and appraisals are key moments to develop and reinforce it, but it is in what behaviours and mindsets your leaders encourage and discourage on a day-to-day basis which will be most impactful in anchoring this change.
TRANSFORMATION. Step 4: Transform your systems
Systems run because they arrange pieces that fit together. Change a piece only, at best it doesn’t make a difference, at worse it breaks the system. To systemically embed agility in your organization, you will need to make its processes and systems agile by design. Once a critical mass of employees are embarked, they may suggest changes by themselves, supporting change from the bottom up.
Agile Governance. Turn your organization into a network. Delegate decision-making authority to the product owner. Make cross-functional task-forces a default and keep product teams focussed on delivering.
Multidimensional Business Performance. Ultimately, the agile organization focuses its attention and efforts on customer satisfaction. It can take the form of product usage frequency & depth, customer ratings, speed to launch. Metrics need to be customer-centric and reviewed frequently.
Growing Talents. Develop performance appraisals focussed on more frequent (quarterly or project-based), multidirectional (peer to peer and upwards) feedback. Assessments should include agile mindsets, as well as metrics that make sense for the specific group of employees. Embed business performance in talents’ appraisals with results-based incentives. Appraisals could also recognize improvement, instead of pure achievement, as failure is part of the agile process. Favour regular learning sprints to one-off lengthy seminars. Recognize & encourage peer-to-peer sharing as a valuable experienced-based learning method. Develop your online catalogue to continue developing talents in a remote environment.
Digital Infrastructure. Driven by new technologies, build systems that integrate business services collaboratively, provide real-time data, automated reporting and self-serving dashboards. Implement rolling forecasts to adapt to market changes and improve your tools’ usability. Review regularly your processes to remove unnecessary steps, reduce validation points, automate low value-added processes.
Collaborative Workspace. Favour spaces that invite collaboration and make talents more mobile. Offer remote & decentralised options to remove pressure on talents to risk crowded spaces.
Such a deep transformation takes years of relentless efforts. At times, you may need to growth-hack existing culture & systems to get results, before you integrate back into the organization. To quote one of my favorite clients, the secret is to:
A framework to make your organization agile
Our conviction is that there isn’t a one-size-fits-all model. We work side by side with our clients to deliver on concrete projects and results, consistently. We help them conceive their own agility & rethink their organization at scale. We work with project owners, fonction heads and CEOs alike. Our agile practice can support you regardless of where you are in your agile maturity.
This article is written by Rachel DAYDOU, Partner & GM China of Fabernovel
Rachel joined FABERNOVEL in 2018 to build FABERNOVEL’s consulting practice in China and became General Manager in 2020. She now leads a team of talents delivering digital transformation projects for industry leaders in the beauty, luxury, fashion, retail and finance sectors. She has directly led strategic advisory projects, dozens Learning Expeditions and large scale Digital Academies.