In the face of overwhelming geopolitical, ecological, demographic, and technological change, many organizations are considering incremental or radical transformations to agility. Hallway conversations, board meeting discussions, leadership retreats, and corporate value statements regularly include references to organization agility and its synonyms, resilience, adaptability, nimbleness, and flexibility. However, the term is rarely defined and is often confused with software development processes, leadership characteristics, and other related perspectives, and there has been little discussion about the relationship between agility and organization development (OD). This essay describes how OD and agility are complementary concepts that work together.
Agility is an advanced organization capability that allows an organization to respond in a more timely, effective, and sustained way than its competitors when changing circumstances require it. My colleagues and I created the Agility Pyramid to operationalize the capability. An agile organization requires a set of interdependent agile routines, differentiated capabilities, and management practices.
At the top of the pyramid, the routines of agility represent a learned ability to do different things or do things differently when and where they create a performance advantage for the firm. They include strategizing in ways that keep the organization aligned to marketplace demands over time; structures and processes that support accurately perceiving changes in the organization’s external environment; testing new ideas, products, and processes; and implementing a wide variety of organizational changes.
The capabilities level in the pyramid describes the ability and capacity of an organization to get certain things done. Organizations that can identify, develop, and implement ways to be better, faster, or cheaper than their competitors are able to achieve above-average profitability.
At the base of the pyramid are the familiar “good management” practices associated with, among other things, being able to set goals, structure productive activities, develop capital and operating budgets, and reward employees in a systematic manner. Agile organizations have management systems that are fit, flexible, and (appropriately) fast. They not only fit and support alignment to the strategy, they are also designed to operate at a faster “clock speed” and change easily, even as they contribute to effectiveness. For example, goal-setting processes occur as necessary, resources get allocated flexibly, and incentive systems reward execution, change, and behaviors that align to the corporate mission, purpose, and values. Importantly, leadership is defined as an organization capability rather than as an individual trait or position in the hierarchy.
However, knowing the elements that make up an agile organization — knowing the structures, systems, and processes — does not make it agile. Becoming an agile organization is a process of organization development. Organizations that want to make the transformation to agility must engage in a process of planned, strategic change.
The Agility Pyramid represents a different way of thinking about OD. It helps OD practitioners answer the question, “What’s the next, best, right thing that needs to be done to make this organization more effective?” First, the Agility Pyramid represents a diagnostic framework that replaces traditional notions of effectiveness, such as efficiency and stability, with adaptability and change at the core. Diagnosis is a hallmark feature of OD, and it allows the organization to understand its strengths and weaknesses vis-à-vis agility. Are speed and flexibility designed into the organization’s fundamental management practices and processes? Are the organization’s strategies and capabilities effectively differentiating the organization? To what extent does the organization possess the routines of agility?
Second, the pyramid implies a developmental sequence and change strategy. The transformation to agility initially involves helping organizations to build fit, flexible, and sophisticated management practices, including the ability to implement change. Partnering with professionals in the strategy function, OD practitioners can then help to develop and build the capability sets that will differentiate the firm from competitors. OD practitioners are uniquely suited to help organizations develop the skills, systems and processes, and learning mechanisms associated with organizational capabilities. Over time, strengthening management processes, building and rebuilding differentiating capabilities, and aligning these toward change will result in strong agility routines.
OD always has been and should continue to be about developing adaptable organizations. Designing strategically appropriate change processes and interventions is OD’s strength, and OD practitioners should continue to leverage their understanding of process. But in today’s world, they cannot overly rely on it. For OD to contribute to the development of agile organizations, practitioners must devote themselves to developing the skills and knowledge related to the principles and frameworks of strategy, organization design, and capabilities. By returning to its original purpose — the transfer of knowledge and skills to client systems so they possess the capability to change themselves — and by returning to its original methods — the integration of human process and organization design — OD can be a relevant contributor to agility.