Pivot or Perish: Why Organizational Agility is Critical for Success in Modern Business

Last Updated January 15, 2020

Change is the only constant in the business world. That’s been true since the dawn of free market capitalism. But with innovative technology, the pace of change has only accelerated in the 21st century.

An organization’s ability to meet those changes and quickly adapt are fundamental to success in the modern business world, according to a thought-leadership report from the Project Management Institute (PMI) and accounting firm KPMG titled, “Achieving Greater Agility – The Vital Role of Culture and Commitment.”

Agility ranks at the top of the list in terms of factors that influence project success, PMI President and CEO Mark Langley notes in an introduction to the report.

“Our research confirms that the most important factor influencing project success rates is an organization’s agility level,” he writes. “Agility is even more important than project approach – the greater the agility, the better the outcomes: financial results, customer satisfaction, project metrics, strategy implementation and benefits realization.”

What is Organizational Agility?

Clearly, organizational agility is important. But what is it, exactly?

Most associate the use of agile project management with the software industry, where it started. Software engineers looking for better speed-to-market for new products created a “Manifesto for Agile Software Development” that became the basis for Agile methodology.

Agile, which focuses on faster development of projects while retaining quality, has been used in tandem with Lean Six Sigma, which focuses on cutting waste and making all decisions with customer needs in mind.

Organizational agility incorporates aspects of both. It refers to an organization’s ability to adapt and respond to changes in external market conditions. This includes not just speed but remaining in touch with the needs of customers.

Agility is about flexibility. Ideally, organizational leaders keep in touch with customer needs, learning and then adapting to changes. According to the PMI report, this involves a focus on “iteration, interaction and collaboration.” It also involves the ability to effortlessly switch priorities and face market changes head on, rather than clinging to a business scheme that worked five years ago but is no longer viable.

Why Organizational Agility Is Important

According to the PMI report: “Agility is no longer optional as customer demands and market trends change more rapidly by the year, with ongoing digital transformation accelerating the process.”

That’s nothing new. In 2008, PMI was advocating changes that would inject “nimbleness and speed into current project management processes.” It’s just that a decade later, it’s more imperative than ever.

The 2017 Pulse of the Profession report from PMI also noted the emergence of Agile, with 71% of organizations reporting they incorporate Agile into projects sometimes or more frequently than in the past.

PMI’s Achieving Greater Agility report states that the time for change is now, not in three or five years. Some organizations, still mired in traditional approaches, face a “pivot or perish” moment, according to the report.

Fostering Sustainable Organizational Agility

Organizational agility starts at the top. Writing for the PMI report, business consultant Tony Scott – who has worked with Microsoft and Walt Disney Company, among others – argued that leadership behavior is the single most important aspect in creating culture.

Part of that, Scott wrote, is consistently recognizing and rewarding behavior by employees that foster an agile approach to organizational goals.

Another critical component to success involves getting everyone involved with a specific business value change working together on agile initiatives. Otherwise, there might be pockets within an organization working on agility, but they go nowhere because they are isolated.

According to the PMI report, organizations should look to:

• Communicate messages from the C-suites in a consistent way
• Enable collaboration across diverse enterprise groups – agile is about people over processes
• Address a whole business value chain at once, allowing end-to-end agility
• Accept multiple approaches that are tried during the transformational phase (in other words, some failure must be expected and accepted)
• Commit to transforming and modernizing current approaches before introducing new ones
• Minimize friction between traditional phase-based delivery and more modern approaches

One way to approach handling all these issues is to run agility initiatives through an organization’s Project Management Office (PMO). Because of their experience working across all areas of an organization to implement successful projects, project managers in a PMO have exactly the experience and relationships needed to foster agile transformation.

Challenges That Impede Organizational Agility

While there are clear advantages to having a more flexible organization that quickly adapts to market changes, getting there takes focus and effort.

Some of the biggest roadblocks to creating organizational agility include the following, summarized from the PMI report.

Lack of executive leadership – Without support and funding from the highest levels of an organization, transformation is not sustainable. What typically happens is that one area will adapt Agile approaches, but the effort fizzles out because it is not supported organization-wide.

Not taking an enterprise view – This includes many factors. For example, not establishing a formalized, centralized program that fosters agility across an organization (such as out of a PMO). This leads to isolated implementation of agile, which can lead to more problems than it solves.

Not considering organizational change – Agile requires organizational change – not just in product development but in other areas that traditionally do not change. The layers of management should be reduced, for example. More focus needs to be placed on talent management, employee training, business technology collaboration and performance management processes.

Not considering transition time – Change takes time. Realistic expectations need to be put in place from the beginning. Rather than an all-at-once approach, change should be made in “waves” that slowly break down traditional barriers.

Organizational agility is not easy to create, nor is it going to happen overnight. But for those trained in the improvement processes inherent in Agile and Lean Six Sigma, it’s an area where they can make a great deal of impact.