The cure for hardening corporate arteries? Creating a culture of agility

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What company in the world has not been going through sudden shifts wrought from major, disruptive change? Consumer technology companies, health care companies, automakers, and smart phone manufacturers are among industries whose very foundation is more like shifting quicksand.

To survive and grow, and even regain competitive advantage, many companies are grappling with ways to transform their businesses in the face of radical change. They are responding in many predictable and time-tested ways: changing CEOs and leadership teams, shifting strategies, rolling out new product lines, amping up innovation, cutting costs and restructuring. These are all the necessary things to do to react to change, but these actions usually only treat the symptoms of a chronic illness – hardening of corporate arteries – without curing the underlying cause.

Companies may be missing out on the most important strategy of all: creating a culture of agility. This should be every CEO’s first strategic priority because it is the culture that enables companies to flex nimbly in any direction and execute any strategy. Agile cultures translate into forward thinking and innovation, eschewing the ‘this is how we do it around here’ mentality that causes companies to freeze, and then fall quickly behind.

Consider these questions as you think about your own company:

  •  Are we changing as fast as the world around us?
  • Is our culture enabling us to be agile or impeding us?

Does this describe your organization? If so, then a comprehensive diagnostic survey of the cultural traits of your company should be considered. It is the best way to get a true picture of this and a good start at determining next steps.

In agile cultures, there is a ‘growth mindset’ of constant learning, trust and permission to take risks in order to learn from that that drives decisions, rather than a ‘fixed mindset’ that creates a myopic focus on what has made the company successful.

Nike CEO Mark Parker has been called the most creative CEO on the planet. He embodies the growth mindset I have just described. Parker thinks of it as being agile and responsive to changing customer needs and not having a myopic focus on the success your company has already built. He told Cris Beswick, author of The Road to Innovation, “One of my fears is being this big, slow, constipated, bureaucratic company that’s happy with its success. Companies fall apart when their model is so successful that it stifles thinking that challenges it.”

At Senn Delaney, we guide CEOs on shaping their organizational cultures. They come to us wanting to overcome many business challenges. Some want to create a customer-centric culture. Others need to align the culture to a changing strategy and structure. Many want to overcome cultural barriers that occur during mergers.

And naturally, most seek to increase innovation to be more competitive. These are all great goals, but what they are really are by-products or traits that result from shaping a culture in a desired direction. What CEOs actually need, even if they aren’t stating it in these terms, is to build a culture of agility. This is really the cornerstone of business success in today’s turbulent times of radical change. Watch the following short video with Senn Delaney CEO Jim Hart on why organizations with agile cultures perform better.

What is organizational agility?
This is a great definition of organizational agility by Lee Dyer and Richard A. Shafer of Cornell University ILR School/Center for Advanced Human Resource Studies: “Organizational agility is the capacity to be infinitely adaptable without having to change. Agile organizations strive to develop a built-in capacity to shift, flex, and adjust, either alone or with alliance partners, as circumstances change, and to do so as a matter of course.”

Being infinitely adaptable is the key here, and there’s really only one way to do that: create the culture that has the built-in capacity for agility.

Amazon is a strong example of an agile organization. It has morphed from a Web-based bookseller to an online retail platform to a digital media powerhouse, and most recently, to a leader in cloud computing. And this continual change has taken place in the absence of a performance crisis, demonstrating an ability to envision changes and adapt instead of the reverse.

Why should companies focus on creating an agile culture?
Agility is linked to profitable growth: Massachusetts Institute of Technology research suggests that agile firms grow revenue 37% faster and generate 30% higher profits than non-agile companies.

Nearly 90% of executives surveyed by the Economist Intelligence Unit believe that organizational agility is critical for business success. Yet, most companies admit they are not agile enough to mobilize quickly, respond positively and change to compete successfully.

What are some barriers to agility?
Internal barriers – the culture — prevent organizations from being agile. The barriers include hubris, complacency and resistance to change, poor decision-making, lack of alignment around strategies, vision and values, risk-averse mindsets, siloed thinking and turf wars.

What are common traits of agile organizations?

  • Agile organizations are optimistic in the face of challenge, never rest on their success, and regularly seek to improve even when they are successful.
  • They embrace failure as a learning opportunity, have a strong purpose, a vitality and a learning mindset.
  • There is alignment and clarity around the mission, and vision and values.
  • Rapid decision making happens not just during a crisis, but every day.
  • There is a strong ability to execute, high levels of accountability, customer-centric thinking and strong cross-organizational synergy.

Can you create a culture of agility?
Most executives have a sense of what agility means for their companies’ future. However, there is still a big gap between awareness of the need for agility and taking concerted action to become truly agile over the long term.

Creating a culture of agility is possible and should be the first strategic priority of the CEO and senior leadership team because it is the culture that spawns an organization’s ability to adjust in any direction and execute any strategy.

Transforming the culture requires a comprehensive approach and a focus on four key principles: purposeful leadership, personal change, broad engagement, with energy, mass and momentum, and focused sustainability.

Conclusion
Adapting to change, while good, is not a winning strategy for long-term success. To be most productive, innovative and successful, companies need to be agile. And that is something you need to bake into the cultural DNA with purpose and focus.

What do you think? Is agility a key to business success? Do you think about how you can personally remain agile in your business and as a leader? What traits do you think you should focus on to become more agile? Please comment below.

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Dr. Larry Senn is a pioneer in the field of corporate culture. He is chairman and founder of international culture-shaping firm Senn Delaney, a Heidrick & Struggles company. Larry's vision and leadership for more than 35 years has helped Senn Delaney become an international firm that is widely recognized as the leading authority and practitioner in the field of culture shaping. Larry has led culture-shaping engagements for the leaders of numerous organizations, including dozens of CEOs of Fortune 500 companies, state governors, members of two U.S. president's cabinets, deans of business schools and the presidents of major universities. He is an accomplished consultant, business advisor, group facilitator, author, CEO coach and public speaker. Larry has co-authored several books, including Winning Teams, Winning Cultures and 21st Century Leadership. In 2013, he published his latest book, Up the Mood Elevator: Living Life at Your Best. This book reveals some profound principles, fascinating concepts and useful practical tools to help people improve their experience of life, enhance results, build better relationships and create success with less stress. Prior to founding Senn Delaney, Larry ran his own retail business in college, was a senior engineer in the aerospace industry and a faculty member at University of Southern California and University of California Los Angeles where he taught leadership. Larry has a BS in engineering, an MBA from UCLA, and a doctorate degree in business administration from USC. Read his full bio.

Please note: I reserve the right to delete comments that are offensive or off-topic.

  • Norman Jentner

    Dr. Senn, I salute your many years of national and international engagements with both private and civic organizations. You have done this alongside not quite as many years by yours truly and my colleagues in more localized venues in Northeast Ohio, USA. I admire your long-term culture-shaping work within our larger companies, governments, schools and universities around the world.
    I note your long-term focus on peak performance has had the effect, quite naturally I think, of sharpening your own focus and strengths over time beyond simply strength and adaptability — and into agility, as you so cogently describe in your blog here.
    In my own way, I am going through a similar sort of evolution.
    As I continue to explore our evolving STEM (Science, Technology, Engineering, Math) understandings of human performance, I remain aware of the cardinal roles played by the interpretations experienced by our CNS (Central Nervous System) of danger and novelty.
    As you already know, the interpretation of “danger!” can hijack our CNS’s higher-order processing, despite our best intentions, leading to temporary disruptions of our higher-order information-processing.
    I note that your focus on “agility” enables organizations to more readily avoid this potential “hijacking” of their people’s higher-order information-processing, specifically by proactively remaining under the conditions for “flow,” wherein our CNS’s higher-order processing of information can remain quite naturally stimulated, engaged, and sustained.
    I salute your much more polished and pro-active focus!
    Such agility was, once again, recently required by yours truly. After inclusion in a mass layoff some years ago while working in a leadership position in the public health sector, I with glee took on the challenge of reinvigorating — well, actually, re-inventing, then further transforming, a prior private practice in psychological consultation to organizations. While fantastically interesting amidst continuous new learning, financial business success did not materialize to the degree I wanted or needed.
    It is noteworthy that it was NOT by my reacting out of FEAR that ultimately opened up new doors of opportunity for me and my business (although, to be honest, I did attempt some actions from this reactive mindset, too).
    I found, in contrast, that actual personal agility was quite natural, requiring no dithering upon introduction and investigation by me, largely because I remained committed to continuing to engage my evolving circumstances with a continuing commitment to regular personal time invested toward peace of mind grounded in my own peak performance — professionally and personally. This required continual openness to new learning that kept supplementing, even if at first sometimes seeming to contradict, what I already “knew.” For me, this process has been much more personally engaging for me than most even well created movies and plays (although these are great, too).
    Acting once again with agility transformed my prior lackluster results into many more profitable business experiences while at the same time supporting me to remain true to my core valued focus on “conflict as opportunity for learning and growth.”
    In fact, my acting with agility has served to further enhance my cherished understandings as I continue to focus on “conflict as opportunity” — with now many more of our future leaders and in many more kinds of settings each month.
    I’ve written about how this recent shift occurred for me, and the beginning consequences, in several blogs leading up to my most recent blog at http://businessculturesolutions.com/conflict-as-opportunity-requires-respect-no/.
    This shared with you, Dr. Delaney, I respectfully posit three questions for your comments if you wish. I ask these questions within the context of our observations and reports of “typical” versus “high-performing and agile” human behaviors, as individuals and as groups, amidst the many challenges, purposes, foci, and engagements of our private, public, and civic organizations.
    Recognizing that, universally, an “optimal” range of novelty actually energizes our CNS functioning toward “flow,” something I suspect you write about in Up the Mood Elevator: Living Life at Your Best and something I suspect we both would assert is necessary for truly sustaining our organizational as well as personal agility, I solicit your thoughts, if you care to, concerning…
    1) What roles, if any, might you see “organizational agility” playing in either absorbing or addressing the increasing polarization we often see amidst increasing learning and achievement gaps, among our poverty, middle-class, and wealth sub-cultures in North America?
    2) From your international perspective, do you see our poverty, middle-class, and wealth sub-cultures facing similar challenges around the world, or widely varying challenges across our different monetary cultures?
    3) How might organizational values, culture, and agility play a role in bridging these often widening gaps among our three economic sub-cultures, on behalf of more understanding and respectful engagements among diverse parties in our populace at large?
    I would treasure your thoughtful responses, on behalf of our not falling prey to hardening corporate arteries.
    My best.