Posted: 05 Oct. 2021 10 min. read

Organizational resilience series part 1: Adaptability

Creating an agile organization

By Reed Deshler, Don Miller, Diane Sinti, Maya Bodan, Nathan Mesaros, Yuki Iwase, and Mariana Hernandez

The world is constantly changing. AlignOrg and Deloitte are helping clients prepare for challenges ahead by transforming their organizational structures and ways of working. Our joint blog series explores how organizations can strengthen their resilience.

Though the pandemic has already strained and tested the workforce in once-unimaginable ways, more challenges are yet to come. Now, organizations must be proactive in becoming agile organizations, transforming not only how they work, but also how work drives value for the workforce, marketplace, and society.

Why is there a need to build resilience?

As of late August 2021, 66% of organizations are delaying office re-openings due to COVID-19 variants, according to a Gartner survey of 238 executive leaders. Additionally, an unprecedented number of workers are quitting and migrating to new jobs in what’s been dubbed the Great Resignation, with 3.8 million people quitting their job in June 2021 alone, citing post-pandemic burnout and opportunities to find more meaningful work.

In this three-part blog series, we’ll explore how companies can intentionally build resilience. 

In part 1, we will discuss how companies can increase organizational agility. Previously, an organization’s desire to become more agile as an indicator of success; now, it’s a requirement to survive. What makes an adaptable organization agile?

1. They’re defined by a purpose.

An organization’s purpose is its identity. A clear purpose is at the core of its business strategy, articulating why an organization exists and what problems it’s here to solve. Additionally, an organization’s social purpose has never been more critical, as conversations around racial equity, sustainability, and more come to the forefront. Purpose-driven companies witness higher market-share gains and grow on average three times faster than their competitors, all the while achieving higher employee and customer satisfaction. However, many companies struggle to embody their purpose in their day-to-day operations.

So, how do you integrate purpose in each layer of your organization? First, a company’s purpose needs to be translated into tangible missions across teams and individuals. A mission is a specific objective that is time-bound and comes with a defined set of resources. An example would be to open a pop-up store in Chicago in three months and have at least 10,000 daily visitors; resources from marketing, strategy, operations, and digital would be provided to accomplish the mission.

Mission-based organizations bring people with different skill sets together into multidisciplinary teams to accomplish outcomes. While this is a shift away from traditional functional siloes, avoid the temptation to apply a “one-size-fits-all” solution. Some areas are generally susceptible to frequent market shifts or technology disruption (e.g., product innovation or software development); these areas should be composed of agile teams. Other areas are more suited for efficiency (e.g., financial reporting, compensation and benefits, and operations). Instead of deploying agile teams here, companies should consider improving work through automation.

AlignOrg’s book, Mastering the Cube, introduces the idea that successful transformations are led by alignment leaders: people who are responsible for the setup of the organization so it can achieve results. Organizations should identify the right alignment leaders who will be accountable for keeping their team’s specific mission and activities aligned with the broader purpose.

It’s not enough to declare a socially driven purpose; organizations must also follow through on their strategic purpose. Successful organizations make it clear to their people the connection between their work and the greater purpose. They do this by translating the purpose into missions that each team can realistically accomplish with the time and resources provided. Making this connection enables you to tap into people’s intrinsic energy and the desire to belong to something larger than themselves.

2. They’re simplified.

Companies today are often burdened with cumbersome layers of bureaucracy, matrixed reporting lines, and roadblocks for employees who are simply trying to get their work done. Unraveling complexity is vital to keeping your organization agile.

First, be clear on your proposition to win in the marketplace. Having clarity on what matters to the customer can help simplify how an organization operates. If on-time deliveries are critical for customers, bureaucratic steps—such as policies, approvals, processes, and the like—should be removed to help ensure consistent on-time delivery.

Second, identify the causes of complexity. In addition to scanning organizational hierarchies, processes, and governance models, consider conducting a network analysis with collaboration data. This will help you visualize how people share information and get work done, revealing bottlenecks that aren’t obvious in “sticks and boxes” organizational charts. Use these insights to cut down unnecessary layers, remembering that, in this case, less is more.

Simplifying your organization should make it easier for the right people to make decisions quickly. Eliminating rigid governance mechanisms can accelerate decision-making and response time. Make sure that appropriate decision rights are in place, so these cross-functional teams are empowered to remain focused on achieving the team’s mission enough so that they can adapt to internal and external forces.

For example, a three-sided marketplace organization recently shifted to a geo GM model to enable quicker global expansion. The company clearly defined the roles of sales and marketing, interactions with product and engineering priorities, and supporting operational processes. It simplified decision-making by placing ultimate accountability within the geo leader’s hands whilst ringfencing other roles to innovate around the edge. Senior leaders were brought together to pressure test this model to ensure geo leads are truly empowered to make sales and marketing decisions and drive the associated product and engineering requirements. This enabled the company to rapidly enter new markets and gain local market share more quickly.

3. They’re designed for well-being.

With workers citing post-pandemic burnout as a top reason to resign, protecting workers’ well-being is critical for a company to succeed, let alone function. In the Global Human Capital Trends 2020 survey, we found that while many organizations have focused on individual well-being, additional opportunities exist to integrate well-being into a company’s organizational design itself.

Well-being can be incorporated into work in many ways. For example, it can mean giving workers more control over when and where they work so that they can work at the times and places that they feel most productive. It could also mean structuring work so that business operations don’t depend on any individual, making it possible for workers to take meaningful time off.

To get started, organizations should identify alignment leaders who are accountable for the well-being of the workforce. These alignment leaders should use existing organizational and HR data to gain insights into workers’ needs related to well-being. For example, a global footwear and apparel company analyzed its employee engagement survey results and recognized a need for workers to have more access to rest and recovery. In response, the company introduced a new flexible time-off program to give employees more jurisdiction over their work schedules. Lastly, alignment leaders should engage workers to understand what changes in work practices may have the greatest impact on well-being. To do so, they may need to establish ways to collect workforce feedback on an ongoing basis.

Regardless of what’s in store for the future, it’s critical to be prepared. Adaptability must be embedded as a part of an organization's DNA. In our next post, we’ll continue to uncover how companies can build resiliency by rearchitecting work—by seamlessly integrating humans and technology—to unlock greater productivity while adding value and meaning for people.

AlignOrg Solutions: AlignOrg Solution is a consulting firm that specializes in helping clients clarify strategy, design and align organization systems and choices, and lead transformational change to drive growth and marketplace success. Learn more about AlignOrg Solutions and our work and thinking.

Deloitte: Deloitte’s Human Capital professionals help clients reimagine the work, workforce, and workplace of the future – we make work better for humans, and humans better at work. We work with executives to translate their business strategy into optimal structures with clear roles and responsibilities. Learn more about our Organization Design solutions.

 

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Don Miller

Don Miller

US Leader | Organizational Strategy, Design, and Transition

Don leads Deloitte Consulting LLP’s Organizational Design practice, empowering global clients to design their organization structures based on their best human impulses and aspirations to future-proof their businesses. He has more than 15 years of experience in bringing together diverse leaders to co-create new organization governance and decision rights models to quickly foster their teams’ accountability to organize, operate, and behave differently to stay resilient in a fast-paced world. While his OD industry experience spans all sectors and functions, Don is also one of the leaders of Deloitte’s Human Capital Media, Entertainment, and Sports practice.