Why are companies failing to implement business agility?

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According to the “Business Agility Report 2021” published by the Business Agility Institute, "the main challenge to overcome in implementing agility in organisations is resistance to change", since resetting people’s mindset is hugely complex in the adoption process.

Many organisations fail because there is no leadership qualified for guiding a change of mindset in the members of the organisation.

Decades-long inherited behaviours make change a very complicated affair in corporate environments that have been hierarchical since their initial conceptualisation in the last century.

Change management experts have established that what is required is to shape a coalition of people within the organisation who are properly trained to lead change, with sufficient leadership to allow that change to be participatory and above all well transmitted at all levels.

It is not uncommon for there to be resistance, it is completely normal behaviour in human beings, and there are mechanisms, such as gamification, that allow it to be approached from a more human and less technical standpoint.

Business agility requires a culture of respect, trust, learning and autonomy, an obsession with creating timely experiences for customers that meet real needs, a committed and aligned workforce regardless of the business unit or function, a management with the capacity to catalyse action and aligned corporate objectives, processes and policies.

According to the above-mentioned report, on a scale of 0 to 10 in maturity, the list is headed by Oceania (5.6), Asia (5.4), Europe (5.1), and finishing the list are America and Africa (4.2).

This shows that there is still a lot of work to be done. In general terms, organisations stand at between 4 and 5 in their maturity level, so the adoption of agility is a practice that requires an integrated effort, from the top level (CEO), to the lowest levels in the hierarchical structure, and they are not isolated or brief efforts, they are part of a repetitive, incremental and constant process.

According to the Business Agility Institute, organisations with between 50 and 200 workers present the highest level of maturity with 5.5, while organisations with between 1,000 and 10,000 workers present the lowest level of maturity with 4.5, denoting that the number of people is a factor influencing maturity.

Factors such as talent management and leaders’ growth mindset have been identified as the lowest in the study. This shows that the change to be made is more complex with people than with the processes or tools involved in it.

The agile organisation’s journey is not something you achieve in months.

Organisations that have been working for less than 2 years on this change have reached a maximum maturity level of 5.3, while organisations between 3 and 8 years reach a maximum maturity level of 6.6 and finally organisations with more than 8 years attain a maturity level of 8.32.

This shows that the time required to see benefits for the organisation is 2-8 years, confirming that this is not a quick change; it is constant and repetitive change that succeeds in improving through small victories that impact business productivity over time.

Another failure factor in adoption initiatives is that senior executives want the benefits to be obtained immediately (3 to 6 months), when in reality change requires a longer period of time.

The appropriate involvement of the different departments has been another factor that prevents a complete organisational transformation.

Most organisations initiate their change through the information technology (IT) area, supported by operative areas of the business, sales, marketing, PMO or human resources; however, it is not possible to make a substantial change that delivers tangible benefits for the business until all its members are aware of and actively participate in the agile transformation that is happening.

It is not possible to make a change only in the IT area, as many roles outside IT are required to achieve the expected impact.

After SARS-CoV-2 (2021), organisations realised the importance of variables such as: workforce, happiness, predictable deliveries, quality, response to change, time to market, and delivered value.

All organisations made changes to their operational models to improve the effectiveness of each of those variables in order to survive the pandemic.

All these changes involved the highest level of hierarchy in companies, hence the levels of improvement in variables over time.

Another factor in why companies fail in this implementation is that their highest level (C-level) is not actively involved in generating change as part of the change coalition that leads the transformation.

Finally, it is critical to think about favouring workflow optimisation in the organisation through the value streams and the teams that support them.

One of the main objectives of business agility is to optimise workflow through value flows. This is a key factor in responding to customer and market needs and in accelerating the feedback cycle.