Here is a brief excerpt from an article written By Aaron De Smet, Michael Lurie, and Andrew St. George for the McKinsey Quarterly, published by McKinsey & Company. To read the complete article, check out other resources, learn more about the firm, obtain subscription information, and register to receive email alerts, please click here.
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To build and lead an agile organization, it’s crucial that senior leaders develop new mind-sets and capabilities to transform themselves, their teams, and the organization.
For many organizations, surviving and thriving in today’s environment depends on making a fundamental transformation to become more agile. Those making the transition successfully are achieving substantive performance and health improvements: enhanced growth, profitability, customer satisfaction, and employee engagement.
More than any other factor, the key to a successful agile transformation is for leaders, particularly senior leaders, to develop substantially new mind-sets and capabilities. This article summarizes our guide, Leading agile transformation: The new capabilities leaders need to build 21st-century organizations (PDF–765KB), to readying leaders for agile transformations.
The agile story
Before we dive deep, it’s useful to take a broader view of agile, and particularly what sets agile organizations apart from traditional ones.
Characteristics of traditional and agile organizations
Simply put, the dominant traditional organization model evolved primarily for stability in a well-known environment. It is based on the idea of an organization as a machine, with a static, siloed, structural hierarchy that operates through linear planning and control to execute one or very few business models.
Agile1 organizations, viewed as living systems, have evolved to thrive in an unpredictable, rapidly changing environment. These organizations are both stable and dynamic. They focus on customers, fluidly adapt to environmental changes, and are open, inclusive, and nonhierarchical; they evolve continually and embrace uncertainty and ambiguity. Such organizations, we believe, are far better equipped than traditional ones for the future.
While there are many different forms of enterprise agility, they share some common trademarks. We have identified and enumerated these in a related article, “The five trademarks of agile organizations.”
Leadership in agile organizations
This new kind of agile organization requires a fundamentally different kind of leadership. Recent research confirms that leadership and how leadership shapes culture are the biggest barriers to—and the biggest enablers of—successful agile transformations.
Organizations must therefore begin by both extending and transcending the competencies that made their leaders successful in the past. Leaders need three new sets of capabilities for agile transformations. First, they must transform themselves to evolve new personal mind-sets and behaviors. Second, they need to transform their teams to work in new ways. Third, it’s essential to build the capabilities to transform the organization by building agility into the design and culture of the whole enterprise.
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