The COVID-19 pandemic obviated status-quo strategies and made organizational agility an imperative. Companies need to be able to adapt to fast-changing events and move beyond a reliance on static, long-term goal-setting while still meeting regulatory deadlines and providing timely, transparent information to investors, employees, customers, and other stakeholders.
To accomplish that and succeed in a post-pandemic world requires a hybrid approach to business agility, one that combines business agility with traditional management models.
By allowing more autonomy among smaller business units, companies give them freedom to innovate, improvise, and hire as they see fit. But organizations must also preserve a traditional top-down structure that allows managers to effectively oversee the work of employees and meet financial and compliance requirements.
But to understand the benefits of business agility in the current climate requires understanding how companies have traditionally operated, particularly in the time before COVID-19.
The quest for governance and control
Technology organizations typically performed highly structured work that oftentimes required significant investment. Managers set the strategic goals and budgets, mandated and closely monitored the work, and teams focused on delivery and compliance.
The culture of these organizations required regular status updates and emphasized meeting goals like scope, cost, and time versus meaningful business outcomes such as improving customer satisfaction, increasing competitive position, or elevating employee engagement.
The projects required significant investment and planning to define requirements, timeline, and costs. Companies thought of them as singular events, like building a bridge. This lack of flexibility meant teams could not effectively adapt to changing environments.
The movement to agile: delivering faster with less risk
The agile movement started with software development and has become the standard approach for many firms.
Instead of a top-down approach, in which leadership sets goals and direction, agile business processes comprise smaller units of work that are aligned to business outcomes, with less time spent on planning. Small teams of experts perform the work, which the company measures for value creation.
There is no set end date. The work continues until the team achieves the desired outcome.
These groups command significant autonomy in how they work and hire. Teams succeed fast or fail fast. The model, in fact, reduces risk of failure because companies spend less time on planning and delivery. When market dynamics change, teams are able to more easily shift to meet new requirements because they’re not wedded to static, long-term plans.
The pragmatic approach: agility with governance
In today’s environment, businesses need to combine the velocity and customer-centricity of agile organizations with the predictability, governance, and oversight of the traditional management models.
Such different approaches will inevitably create tension. On one hand, the organization needs to deliver quickly and respond to new market dynamics. On the other, it must meet governance and compliance requirements. Transparency is a priority, so organizations must predictably provide investors and regulators with accurate financial and compliance information.
With a hybrid approach, once leadership agrees on business goals, companies use centralized funding to regularly support projects while agile teams continuously adjust decisions to deliver on those business goals. This model eliminates the need for extensive project planning and oversight while ensuring that working groups deliver desired business outcomes.
In highly regulated industries like pharmaceuticals and airlines, the hybrid approach is especially useful. In the airline industry, success depends on delivering new services faster than rivals. Airlines must make prudent investments that benefit customers and their own bottom lines. This requires leadership to make sure that output continually aligns with business goals and meets regulatory requirements.
For these organizations, the hybrid approach provides them the ability to fund, track at the appropriate level, and assess multiple workstreams at the same time.
ServiceNow is honored to be recognized by Gartner as a Leader in the 2021 Magic Quadrant for Enterprise Agile Planning Tools. For more information read the report here.
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