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Why agility pays

According to McKinsey, barely 12% of companies worldwide can be considered truly ‘agile’.

 

McKinsey define ‘agile’ companies as organizations that successfully combine speed and stability. In recent research carried out in 161 different companies around the world with 365,000 individual employees, their goal was to discover how rapidly organizations adjusted to changes and to new ways of doing things.

 

Significantly all 37 of the management practices they scrutinized, when combined with speed and stability, generated better outcomes in terms of the overall health of the company concerned. In 4 of the 37 categories - financial management, financial incentives, capturing external ideas, and involving employees in shaping a company’s vision - speed and stability had a particularly striking impact.

Given the significant striking outperformance of the agile companies, they conducted additional analyses to better understand the characteristics and benefits of agility. This analysis showed the following:

 

  • Both role clarity and operational discipline are highly ranked practices among agile organizations. This enables them to balance reactivity and rapid change, on the one hand, with organizational clarity, stability, and structure, on the other.
  • Agile organizations actively promote innovation and learning. Their performance stands out in three of the four management practices - top-down innovation, capturing external ideas, and knowledge sharing.
  • Agile companies seem to be strong at motivation and particularly excel in meaningful values and inspirational leadership.

 

Source - “Why agility pays” (McKinsey, December 2015)