Agility Can Pay Dividends

By Pamela Babcock Apr 1, 2010
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Organizations and their leaders need to identify and respond quickly to market changes and unexpected challenges, but most aren’t in a position to create an agile culture. And yet agile leadership—from CEOs down to line-level managers—is a key differentiator that separates high performing from lower-performing organizations, according to a recent survey report from Seattle-based Institute for Corporate Productivity (i4cp).

Chuck Presbury, senior director of leadership development for The McGraw-Hill Cos. in New York and a survey participant, said the results didn’t surprise him.

“We in HR see the link between performance of the company and a focus on leadership and talent,” Presbury said, adding that because his company has such a diverse mix of units, it also has a mix of agility across the company.

“Some are pushing ahead assertively into new technologies and new approaches,” Presbury said. “And some, by necessity, are trying to stabilize their organizations among a tumultuous marketplace so they can create the opportunity to be more agile.”

Change: How Responsive Are Companies

The Organizational and Leadership Agility Survey was conducted in February 2010 and yielded information from 454 respondents. It asked about the stability of the respondents’ business environment, how well their corporate leaders adapt to environmental changes and how much executive leadership negatively impacts agility.

Not surprising, more than 75 percent reported that their business environment is changing or rapidly changing. But only 44 percent of companies said they’re adept at identifying and making needed incremental changes to a “high” or “very high” extent; only 40 percent said they recognize and respond to strategic challenges in a timely manner; and fewer than a third (32 percent) said they proactively anticipate and initiate changes needed “for sustained high performance beyond their immediate strategic challenges.”

Varying Numbers Based on Performance Levels

Numbers varied greatly when performance was factored in. Companies that consistently outperform competitors in profitability, market share, revenue growth and customer satisfaction—those attributes that i4cp deems “high-performance” indicators—reported much greater agility than lower performers.

Mark Vickers, vice president of research at the i4cp, said he was “somewhat surprised” by the size of the differences between respondents from higher- and lower-performing organizations in these areas. “We expected differences, but in some cases higher performers were three times as likely to say they use certain agility-enhancing tactics,” Vickers noted.

For example:

  • High-performance organizations were about twice as likely as low-performance companies to report that top executives set clear expectations for agile executive leadership behavior to a “high” or “very high” extent.
  • Meanwhile, 36 percent of high performers (compared to 18 percent of lower performing organizations), agreed with this statement: "Our top executives model agile leadership behavior.”

Talent Management Implications

The disparity grew when looking at leadership selection, Vickers noted. High-performing organizations were almost three times as likely to say criteria for selection and/or promotion include leadership agility to a “high” or “very high” extent, and were more than three times as likely to report that their reward systems include leadership agility measures.

Vickers said he also was surprised that more organizations aren’t vigorously using agility-enhancing leadership development tactics.

“You’d think that having executives who do a good job of modeling agile leadership behaviors would be an established best practice, but apparently not,” Vickers noted. “Nor is it a given that companies are selecting or promoting top leaders who have these skills.”

Other Findings

Nearly 58 percent of high-performance organizations recognize and respond to strategic challenges in a timely manner (compared with only 30 percent of low performers); just under half (49 percent) are proactive in anticipating and initiating changes needed for sustained high performance (compared to only 20 percent of low performance companies).

Sixty percent of low performers said leadership sent mixed messages about candid conversation and feedback, compared to only 34 percent of high performers.

Executives are also more likely to be overly focused on their own department or unit in low-performing companies (55 percent) compared to 36 percent of high performers. Among low-performers, 44 percent said top executives don’t consistently model agile leadership, while only 32 percent of high performers said the same.

Proactive Initiatives Take Backseat to Daily Operations

Survey participant Brian McMackin, SPHR, a senior financial analyst with Coldwater Creek Inc. in Sandpoint, Idaho, who previously was senior manager of corporate employee relations, said these days many organizations are too consumed with day-to-day challenges to think proactively.

“They may cut staff to make a quarterly profit performance goal, thereby creating a staff with no ability to do anything other than the day-to-day; no time to think, no time to act, just time to do,” McMackin said.

He added that hierarchal structures may “stymie the organization” and cause individuals and departments to struggle making change.

“If one goose changes direction and flies out of formation, the rest of the geese will not [necessarily] follow. But if the goose changing direction is the lead goose, the rest of the geese will follow just fine,” he said.

So what comes first, the agile leader or the culture that encourages agile leadership?

“An agile leader can be bred from within the company, but only if the company is agile to begin with,” McMackin said. If [the company is not agile], it’s unlikely an agile leader will be promoted “to a place of influence if they are counter to the culture, and an agile leader will struggle to maintain their agile perspective if they are immersed in a stagnant culture to begin with.”

Jump Starting the Agility Process

Col. Dann Pettit, director of operation for the Oklahoma Air National Guard in Oklahoma City, said the survey shows that successful executive teams understand the importance of coordinating activities—“something the military understands deeply,” since in war poor coordination can mean catastrophe, Pettit noted. “The higher performers are doing the right things, and the lower performers are not.”

He agreed that most organizations are too consumed with day-to-day challenges to think or act proactively since the “speed, level, depth and sheer numbers of significant change forces are overwhelming the present organizational business models. It is hard to learn to swim at an Olympic level when you are in the process drowning in the waves of change.”

To jump-start the agility-building process, Pettit said organizations should enlist HR to help ensure that the organization gets the ROI needed to “stay alive and to be vibrant” in the future global economy. HR can champion agile leadership, but without support from the highest levels of the executive team, “it will be a doomed effort,” he added.

“I personally have seen several excellent opportunities evaporate before my eyes because there was no executive level support for fundamental transformational change efforts,” Pettit said.

Pamela Babcock is a freelance writer based in the New York City area.

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