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The Role of Agility in Digital Transformation

Updated: May 16, 2023

Chances are 65% to 85% that your Digital Transformation (DX) is going to fail. When GE, Ford, P&G failed at DX, their CEOs had to step down. Focusing on technology is one of the reasons for failure because technology is only 20% of the issues. -Siemens Advanta 2019

According to Dr. Corrie Block, PhD, DBA, a member of Forbes Coaches Council, putting coders or expert engineers in the front seat is the recipe for disaster. DX program requires 80% soft skills rather than 20% technical skills. Clearly, the central issue of DX failures is the human factor.


Companies are experiencing VUCA double strikes while implementing DX. The technology disruptions in many industries strike from the outside. Many leaders hastily jumped into the race where the new startups have the agility advantages of being small. Your big business organization is losing its velocity in the race of DX.


The second strike is from your internal. Your business organization is losing its productivity because many employees are facing volatility, uncertainty, and ambiguity in DX implementation as complexity arises internally. Some of your employees are becoming the internal saboteurs because they are afraid of losing their jobs while the ones who rise to the top are being hijacked by your competitors with less VUCA internal problems.

How can you, as a leader, gain advantage of agility in your organization while keeping in unison? First, let’s fix some misconceptions about agility.


What is Agility?

The term agility comes from Agile Software Development. The concept of fast-paced development has attracted many industries other than software development to implement Agile Methodology in their DX. Let’s have a look at Agile Manifesto. There are four aspects as the basis of a better software development, as follow:

  1. Individuals and interactions over processes and tools

  2. Working software over comprehensive documentation

  3. Customer collaboration over contract negotiation

  4. Responding to change over following a plan

Three out of four are about people, not about the bi-weekly sprints. This is where many attempts to adopt Agile Methodology got lost in translation. Rephrasing Agile Manifesto for your organizational DX needs should be:

  1. Encouraging employees to communicate and interact with DX

  2. Focusing on DX solutions that work incrementally.

  3. Preventing silos by removing barriers for DX collaboration

  4. Building responsive DX team because plan is never a straight line, especially when you are going into uncharted territory.

Agile methodology is not the same as agility. However, why do many industries other than software development adopt it? There are 3 reasons to it.

  1. It cuts down bureaucracy of communication by having the scrum master as the communication hub.

  2. It focuses on the short-term solution that works. It allows companies to change priorities accordingly to market challenge.

  3. It has small teams doing short development cycles.

Even though agile methodologies, such as Scrum and Kanban, provide the aforementioned benefits, it takes more than implementing agile tools to be an agile organization. Being agile goes beyond doing agile. Navigating VUCA successfully requires organizational agility, which starts from the leaders and talents – the people.


Why Agility Matters

In facing VUCA, leaders and talents are in survival mode where fight-flight-freeze mechanism takes control of their brains. Instead of being agile, your business organization may end up being rigid. Prior to taking any DX strategies, your business organization must release your team’s brain from survival mode into growth mode which enables learning, adapting, and sustaining. The followings are stages into organizational growth mode.

  1. Embracing failures, By embracing failures, your business organization can prevent your leaders from presenting pseudo success. Pseudo success will be your time bomb that blows up when you least expect it.

  2. Fostering awareness to manage consequences of failures, Prepare your leaders and talents create transparency culture so that all team members know the consequences of the failure and devise a plan to tackle it together.

  3. Taking action to rebound by rethinking options, There are better options than forcing project completion. The challenge may have changed, and new options may arise.

  4. Completing the cycle by building agile culture, Building agile culture requires an art of leading DX. Leading DX is about developing 360 Rubik’s cube of thinking, behaving, and making strategic decisions at the organization level.


What is Organizational Agility

It is the competency of an organization to adapt to challenges for survival. However, according to David Clutterbuck (one of the pioneer of Coaching and Mentoring), it is more difficult for a business organization to survive for more than 10 years these days. A hundred years ago, 50% of companies that survived the first few years could last for another 30 to 50 years. At the same time, the same phenomenon happens to corporate executives.



4 Key Drivers of Organizational Agility

Source: Vanaya Indonesia

David Clutterbuck called it corporate arthritis. It is when the system that worked yesterday started to slow your business organization down. There are 8 critical aspects of organizational agility as indicators of the health of your business organization. Those aspects are:

  1. Understanding the need to be faster and more resilient

  2. Switching from linear thinking to complex, adaptive systems thinking

  3. Creating a rapid learning culture

  4. Ethicality and authenticity as the drivers of a psychologically safe climate

  5. Systemic approaches to team performance, capability, and capacity

  6. Creating “teaming” cultures

  7. Harnessing the power of diversity

  8. Speeding up the development of new teams and project teams

Should you have your business organization health check-up report now, how would it look like?


Discover more on our Agility and Innovation Solutions.


 

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