How to Build Organizational Agility Into Company Culture

STEVE HENDERSHOT

Today’s business landscape is full of disruption: geopolitical unrest, the climate crisis, new technologies and rapidly changing customer demands. In the face of all this chaos, organizations must have the agility necessary to innovate and deliver projects quickly. But what does organizational agility look like when it’s done right and fully integrated into a company’s culture? Today, we’re speaking with leaders from Boeing and IBM who have seen the work required and the pitfalls to overcome.

ANNE CHEROUNY

I’ve experienced organizations that have done agility well, and it has taken a long time, and it looks natural. It’s organic. It’s built into the DNA and the fabric of the organization where you’re using similar terms, talking about the work in the same way, approaching work in a similar way.

NARRATOR

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STEVE HENDERSHOT

This is Projectified^®. I’m Steve Hendershot.

There’s a prevalent disconnect in how companies think about organizational agility: More than half of leaders in a 2022 PwC survey say it’s important to be flexible and resilient, yet only one-third of executives think their organizations are doing a great job of actually functioning with agility, according to PMI’s 2021 Pulse of the Profession® report. When it comes to thriving amidst this disruption, project leaders need to embrace new ways of working and empower their teams to be change-ready.

So today we’re looking at what’s getting lost in translation, and how companies, teams and project leaders can overcome those challenges to harness the power of agility. We begin in Arlington, Virginia, in the U.S., where Anne Cherouny is an organizational change management leader at Boeing.

MUSICAL TRANSITION

STEVE HENDERSHOT

Let’s start here: What is organizational agility? Why is it desirable—how do companies benefit when project leaders and teams are able to operate with agility? And why is this so difficult to pull off?

ANNE CHEROUNY

An agile organization is able to adapt and respond quickly to unpredictable changes in circumstances that could occur inside or outside their organizations and that affect them or disrupt them in various ways. Leaders need to contend with how do we become more customer-centric? How do we respond to market urgency for new products, more innovative products? How do we get them to people quicker? These are all things that leaders need to contend with in order to succeed, and there’s a lot of uncertainty around that. So I think traditional, more static organizational structures and even management styles, they really struggle to adapt their processes and their outputs fast enough, but organizations that adopt a more agile approach, they’re responsive to [and] they thrive with change. They’re excited about change, which increases overall performance [and] thus becomes a source of competitive advantage. And really how this shows up in terms of how they lead, from an organizational agility perspective, is that they’re just constantly iteratively evolving capabilities and culture to reinvent, reimagine their business and reinforce resiliency through this kind of constant stream of change that they’re facing.

For some, it’s a buzzword; they don’t really know what it means. It’s not well-defined. In my experience, where agility has actually taken hold is when it has been clarified—what does that mean, and how does that show up in behavior? But there are a lot of benefits that organizational agility can bring. A few that stand out to me are higher customer satisfaction, a focus on people, faster execution and delivery, higher quality.

STEVE HENDERSHOT

Why is this more difficult for some organizations than others? What cultural benchmarks or table stakes are needed to achieve organizational agility?

ANNE CHEROUNY

One of the biggest challenges I’ve seen that hinders this kind of responsiveness to market changes, business changes, is a lack of coordination, collaboration across teams or functions. This can manifest itself in a variety of ways: convoluted processes that lack standardization; siloed teams and even a mentality that kind of supports that; execution that lacks quality; and again, back to standardization—people just kind of doing things in different ways based on what has worked well for them or what they’re comfortable with; shadow teams, functions. All of these things get in the way of quality work getting done with speed. That generally creates a lot of frustration for employees along the way, which can trigger a lack of motivation, lack of engagement. And again, all of that manifests itself in an overall decrease in productivity, inefficiencies and so forth.

Another big challenge I’ve seen is around the organizational change management aspect: the ability to transition people through change in a structured way and equip them with what they need to successfully work in new ways. In my experience, most organizations have inadequate organizational change capabilities, versus organizations that have a strong capability. They embed change management capability into the fabric of the organization.

STEVE HENDERSHOT

Say a project leader sees some of these challenges in their own organization. It’s one thing to diagnose it and another to take steps to solve it. Do project leaders need to then unite around a defined project or purpose in order to start fostering those connections to build agility?

ANNE CHEROUNY

Yeah, absolutely. And I would say that creating a shared vision and purpose is critical to promoting any form of an agile organization. When there’s a lack of clear organizational vision and purpose—and this could be either at the higher-order organizational level or even down within functions and teams—when that is unclear or doesn’t exist at all, which I’ve also found, and it’s not well-communicated, understood and embraced, there’s confusion. And people may struggle to define their work or they’re unsure where their day-to-day work fits into the higher-order strategy. And you can imagine the difficulty of executing on something that you really don’t know what it is. I think that’s critical for sure—making sure that people are aware of and confident in a shared vision helps employees at all levels feel personally and emotionally invested in their work. And I think that’s what matters, right? That’s what makes people want to come into work every day and inspire innovation, bolster continuous improvement.

Where I’ve seen this done well is when leaders involve the employees that actually do the work in the process of defining and aligning around a shared vision and purpose. And maybe they don’t have a hand in creating it from scratch, but they might have a hand in taking the organizational strategy and goals and defining them for their individual teams and needs. And having a hand in shaping that gives people a sense of organizational purpose. It helps them feel connected to the work. And as I said, even doing this at the team level can start to build the practice of agility, and when a few teams start to demonstrate that behavior and it manifests itself in more effective ways of working, other teams and people take notice.

STEVE HENDERSHOT

What about project leaders who are looking to boost their team’s agility within big, complex organizations? Maybe their projects have stricter scopes or their enterprises are not what you’d typically see in an agile environment. How can they bring agility to their projects and teams despite those challenges?

ANNE CHEROUNY

I think there are definitely ways to adopt agile habits and behaviors without having to transition an entire organization to full-on agile. Where I’ve seen success or I’ve even had my own success is pulling in some simple practices that anyone can start using now. Short 15-minute daily standups. That’s a pretty standard practice, but it has a lot of power in increasing transparency and communication among teams and laying the foundation of operational rigor and discipline.

Other things that I use all the time—retrospectives. Constantly pausing, taking a look at the project, “What are we doing well? Where could we make some adjustments to drive better results?” Demos. I do demos all the time. I know product managers do demos for clients, but I demo my work. I demo my team’s work. Maybe it’s about 75, 80, 85 percent complete; I’ll bring it forward to stakeholders and do what I call a show and tell: “This is where our logic is headed. This is where we want to pause and engage you and ask for some feedback to get it across the finish line.” And that really is powerful in providing transparency and collaboration.

Other little things, again—virtual kudo boards for recognition goes a long way in helping people feel that their work is valued. And again, these are things that leaders of functions and suborganizations within a larger complex system can be doing, and it does trickle down. People take notice. They can get on an all-hands call and do a kudo board, and people who may not be familiar with a simple tactic like that might say, “Oh, wow. That was really interesting. I observed a really good effect on this team.” And they may be more likely to adopt that. It’s kind of these little micro-shifts that lead to the larger macro-shifts in habits and behaviors. If you can’t penetrate the organization in its entirety, find little ways and simple ways that you can make some of these practices drive change.

MUSICAL TRANSITION

STEVE HENDERSHOT

Building and maintaining organizational agility can be a challenge, especially within long-established companies with entrenched cultures. But there are ways to get the ongoing buy-in that’s needed, both from senior leaders and at the team level. Projectified®’s Hannah LaBelle spoke with Amol Pradhan, chief transformation officer for services integration hub cloud advisory and enterprise agility at IBM in Singapore, about how best to build a culture of agility.

MUSICAL TRANSITION

HANNAH LABELLE

Let’s talk about building organizational agility into company culture. What challenges do organizations face when working toward this goal?

AMOL PRADHAN

I think everyone is struggling with this even though they understand they need to do [it]. Sometimes what I have observed in these large 35-plus transformations—people are just adopting this organizational agility for the sake of it because their neighbor is doing it. But the key thing they need to realize is the “why” in it—why they want to do it. And once they realize it, it’s extremely critical that leadership walk the talk. They show the commitment consistently, not just supporting to start the transformations. That’s very, very essential.

Everybody starts the transformation in IT, but that is not going to give the maximum benefits or ROI. You need to enable HR, sales, marketing, finance, business teams, technology teams, so when all the parts of the organization are combinedly doing the agility builds, changing toward new ways of working, then they are going to achieve the overall organizational agility. The organizations really become the nimblest to respond faster to the market and reap out the maximum market share and grow the customer base.

HANNAH LABELLE

Say an organization is actively working to build agility into its culture. What are some things teams executing these efforts should keep in mind?

AMOL PRADHAN

The first is about communication, and what I always say is there is no such thing as overcommunication in transformation and building the high-performance team. And especially after the pandemic, when the teams are all distributed, still we are struggling [with] people coming back and continuing from the office. So clarity of the communication is extremely critical.

Then, second, is how we build the capability as well of the people so that they are ready for the change because just mandating the change is not going to help in the long term. Mandating it can have a short-term impact, but what we are seeing [is] people feel different kind of threats. They feel suffocated. They feel a lot of pressure that the change is pushed on them, and I mean, it happens, people leave the organizations. So, in the long-term, [an] organization doesn’t get the benefit if they lose the critical people. That’s why the capability-growing is quite important.

And a third aspect: Enabling all functions of the organizations is critical so that [the] CFO can understand what is the benefit of this change. HR should understand how [it] can treat teams or individuals when doing the appraisals or compensations, etc.

HANNAH LABELLE

Tell me about a project where you helped a team boost its agility. What problem was the project aiming to solve, and how did it help the team deliver value faster moving forward?

AMOL PRADHAN

We changed how our HR operates. We have 400 staff based out of Philippines and Malaysia. It was taking a little longer time to address the queries. So it is all about eating our own medicines while we help our clients to transform faster, adopt new ways of working. What we have changed is the cycle time. We have changed from the way we are operating in a siloed way; we adopted Kanban.

The first thing is what we can remove out of the process. What are the waste? Identify those first, and just fixing those things. We have seen that some people are [geographically] distributed. They are working in pretty much silos. So we’re organizing teams in such a way, and we suddenly saw that there is a great amount of collaborative communications happening and that itself has changed the cycle time.

The second thing, we looked at the systems, what we were using, and we have changed the systems toward the technology software where we can have the more transparent dashboards around the pending queries. And instead of one of the leaders assigning the tickets to the teams, it is visible how many tickets are still open, and people can go directly and pick those. Instead of having APAC [Asia-Pacific], U.K., U.S., because they are only focusing on those markets, but if they see sometimes a ticket is there, some other region, also could pick up the tickets. So we removed those siloed ways of operating as well in that. Third thing is with this transparency, we have seen happier teams as well, and they got [a] little bit better work/life balance as well because that is also important. While you are changing the pace of the systems or product, it’s quite important to ensure the team’s happiness is not compromised while we look for making our customers happy.

HANNAH LABELLE

What has been the response to these changes? Are they helping the HR team be more agile?

AMOL PRADHAN

The most important thing is they do not see now this previous just Excel sheet or PowerPoint dashboards. Leaders are extremely happy that they can see the live reporting of where we are. It doesn’t require the weekly reports. It is a live dashboard; anybody can just go and see the real status. People are happy about the clarity of communication and transparency. They feel more empowered. They feel more accountable.

HANNAH LABELLE

What’s your advice to a project leader who is looking to increase agility on their team? How can they nurture their team members to have a change-ready mindset?

AMOL PRADHAN

What we have heard many times is the growth mindset, and for me, it’s all about how we can better manage the resistance to change. Because for the change agents, their job starts with resistance to change. Some guys are always leapers; they’re ready to start early. Some just follow the crowd, which is a majority. And the third kind of people is more about laggards who do not want to change unless they really see the benefits, that somebody else is realizing that and they do not want to be left behind.

My experience here is to make sure there is no harm in trying. Let’s give it a try for a couple of minimal viable products, let’s say for 12 weeks or so, and if it doesn’t at least harm, let’s just try out with the new ways of working and try to get rid of the old, traditional habits, which slow down the speed. Because survival is not mandatory. The market is going to move. We have to move faster than the rest.

Second is about being transparent, how they can apply and encourage transparent reporting and especially avoid the “watermelon reporting,” which is about showing the green outside, even though it is red inside. So use the tool, live reporting, which is fit for purpose, rather than just a traditional Excel sheet or PPT [PowerPoint] where you can manipulate the numbers and the data. So go with the real[-time] dashboards.

And the third one, I would say, is listening to everyone’s ideas and not overshadow by powerful or louder voices. These three things can inspire the team’s success with this strong collaboration and growth mindset. That’s what I mean overall, and it will instill the feeling of collaboration [rather] than [the] team feeling the competition, because our competition is with the outside world, not within the team.

MUSICAL TRANSITION

STEVE HENDERSHOT

Teams that function with agility are more resilient, better equipped to respond to changing circumstances and moving targets, and able to iterate and adapt in ways that ultimately deliver more value. Building that culture and capability takes real work, but agility is worth the effort. For more information on how companies are actually turning that concept into reality, check out PMI's new report on organizational agility.

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