By Darrell Rigby, Sarah Elk, and Steve Berez
During the early stages of the Covid-19 pandemic, many executives were drawn to Agile management. Facing this crisis, necessity drove all levels of organizations to prioritize better, to focus more on the welfare of customers and employees and less on short-term profits; to solve problems more creatively, to try more testing and learning, to make decisions faster, to give teams greater autonomy, and to reduce the layers of approval. All are hallmarks of Agile ways of working.
Unfortunately, such spur-of-the-moment agility is fragile. When the emergency fades, people too often return to traditional command-and-control innovation until the next crisis arises. That’s exactly what we see happening now as the economy slips into a downturn. But turning away from Agile now is a mistake. Agile is a better approach to economic challenges, too, and by continuing to do Agile in more systematic and sustainable ways, companies can not only weather the latest economic storm, but prepare for and thrive in a world of ongoing, unpredictable and accelerating change.
Companies can sustain their agility by taking three key steps.
- Build an Agile system in agile ways. Business systems have a greater impact on long-term performance than individuals do. That is one reason athletes and business executives perform so differently in different organizations. So why not capitalize on times when Agile innovations are highly successful to make the business system itself more agile? Engage people in changing the system through testing, learning, and adaptation. Then, give them time to get accustomed to a new operating model.
- Raise the cultural speed limits and remove speed bumps. During crises, executives often marvel at their company’s innovation speed. Agile enterprises always focus on speed. The time it takes an Agile team to release an innovation is determined by two factors: the time required to work on the innovation, as well as the time spent waiting on others for decisions, funding etc. They reduce wait times by breaking big, lengthy programs into smaller batches that are reviewed and adapted regularly. Cutting annual planning and funding activities into quarterly sprints also minimizes wait times.
- Reset the balance between operations and innovation. To sustain success in dynamic environments, companies must both run the business reliably and efficiently, as well as change the business rapidly and effectively. Most large companies today have tilted too far toward bureaucracy and starving innovation. Crises makes this deficiency painfully obvious, but the trick is to maintain the urgency, anticipate the next crisis, and create a system that emphasizes innovation as much as operations.
The past two decades have witnessed a startling series of crises and black swan events—from the Covid-19 pandemic to supply chain shortages, terrorist attacks, and natural disasters—all on top of the expected ups and downs of economic cycles, inflationary pressures, and ordinary business disasters such as data breaches, trade wars, and digital disruptions. By maintaining and strengthening an Agile business system, companies can continue to create the innovations needed to survive them all.
You can read more about Agile here and in our book, Doing Agile Right: Transformation Without Chaos (Harvard Business Review Press, 2020).
Darrell Rigby is a partner in the Boston office of Bain & Company. He heads the firm’s global Innovation and Agile practices and is the former head of the Global Retail practice. He is also the author of Winning in Turbulence.
Sarah Elk is a partner in Bain & Company’s Chicago office and heads Bain’s Global Organization practice.
Steve Berez is an advisory partner in Bain & Company’s Boston office and a founder of its Enterprise Technology practice.
They are the authors of Doing Agile Right: Transformation Without Chaos (Harvard Business Review Press, 2020).
Disclaimer: The ideas, views, and opinions expressed in this article are those of the author and do not necessarily reflect the views of International Institute for Learning or any entities they represent.