This post, part of a series, was adapted from APQC’s “Strategic Planning and Implementation Best Practices for Achieving Organizational Agility” best practices report. View an overview of the study findings or download the full report.
This post was written by Holly Lyke-Ho-Gland, a research program manager at member-based nonprofit APQC, the world’s foremost authority in benchmarking, best practices, process and performance improvement, and knowledge management.
As we have noted throughout this series, strategy implementation and organizational flexibility are both related to organizations’ ability to execute initiatives effectively and in a timely manner. When we broke down agility into the two component parts, strategic responsiveness and organizational flexibility (Figure 1), we found that most organizations are less confident in their ability to execute plans quickly and effectively. Hence, the largest gap in agility is related to organizations’ ability to execute their plans.
Agility competency level
This tendency is not particularly surprising because, since it’s not usually the plans where things go wrong, but the execution. Hence, the biggest challenge organizations face in their journey to improve agility is understanding:
- What’s underpinning organizations’ inflexibility?
- What can organizations do to improve their flexibility?
What’s underpinning the gap?
To understand what characteristics were the root causes, or at least enablers, of organizational flexibility, we tested several characteristics, ranging from employee tenure to geographic footprint. We found there was one primary culprit that influenced organizational flexibility: the number of management layers in the hierarchy (Figure 2).
Number of management layers and organizational flexibility
As the number of management layers between front-line workers and the CEO increases, organizational flexibility decreases. In fact, organizations with eight or more layers are almost four times as likely to indicate their organizational flexibility is “underdeveloped” as their peers in organizations with three or fewer layers of management. Does this mean all organizations need to move to a flat organizational structure?
The simple answer is, “no.” However, organizations need to stay cognizant that more hierarchal layers require more effort and organizations need to focus their efforts where agility makes sense for their business. The more layers of hierarchy there are in the organization, the more engagement and steps will be necessary to change directions or implement an initiative.
Typically, implementation is defined as the act of conducting the activities and tasks to execute a strategy. However, there are many vital components bundled into that simple concept, such as: accountability, governance, timing, monitoring, resources, buy-in, and change management. Given all the moving parts within any implementation, is it really so surprising that it is not only where things can go wrong but also the hardest point at which to bake agility into the organization?
For most of the study’s participant organizations, managing the implementation is either within the purview of the strategy department or a cross-functional implementation team (Figure 3).
Common implementation practices
The typical team meets once a quarter to review progress, revise, and address any obstacles, for the implementation plan and meets twice a year with senior management to review the progress and revise the implementation plan as needed. Regular reviews are best practice for any strategy implementation; reviews provide organizations with a structured process to understand performance and adjust the implementation plan and associated resources as needed. But what should the cadence be?
Some lessons from Agile project management
Though in the first article of this series, we caution you not to confuse organizational agility with the Agile methodology. We found that there are key characteristics of Agile that help organizations improve flexibility, namely combining the “right” cadence of reviews and short cycles of implementation (or a phased approach). Generally, most organizations are not conducting reviews at the right cadence.
As illustrated in Figure 3, most organizations conduct quarterly reviews by the implementation team and biannual meetings with senior management. We found that the frequency of reviews, both of the implementation team and with senior management, directly relates to organizational flexibility. Specifically, organizational flexibility is at its highest when the implementation team meets monthly to review and revise the plan and meets quarterly with senior management for reviews.
Though counterintuitive, research on transformational change also indicates that using a phased rollout during implementation helps improve the organization’s ability to stay flexible. When combined with regular reviews, short cycles or phases during implementation allow the organization to make real-time course corrections and keep the plan flexible to changes in the businesses or external environment. Furthermore, using phased rollouts help alleviate common roadblocks to implementation like loss of momentum and high levels of resistance from the organization’s divisions and business units; all of which slow down execution.
Execution of resources
Organizational flexibility relies on the organization’s ability to change directions quickly and reallocate resources (e.g., budget, staff, and time) to support changes in the organization’s initiatives. Generally, organizational flexibility improves as the organization’s ability to reallocate staff to support changes in the strategy improves.
Even more important, of all the factors tested, increasing the responsiveness of staffing changes had the greatest net effect on organizational flexibility, improving the median value from “underdeveloped” to “very strong.”
Taking a flexible approach to staffing is one step that organizations can take to increase agility. Hence, implementation teams need to work closely with HR and management in the affected business units to assess qualifications and capacity of needed staff. Other ways to make staffing more flexible include proactively recruiting talent in advance of need, developing an inventory of internal workforce capabilities, and promoting internal talent mobility.
Organizations can reap some benefits from improving their ability to execute changes quickly, such as improving their ability to implement strategic plans. Organizations that want to improve their organizational flexibility should consider the following recommendations:
Move to a monthly schedule for implementation reviews and quarterly reviews with senior management. Monthly implementation reviews allow the implementation team to monitor the performance of implementation activities and identify and develop responses to roadblocks in a timely manner. Quarterly reviews with senior management keep plans flexible and allow organizations to adapt to new opportunities and changes in their business environment.
Build phased rollouts into the implementation plan. When combined with regular reviews, they helps the organization keep plans flexible and adapt to new opportunities and changes in their business environment.
Think proactively about staffing resource allocations. Implementation teams need to work closely with workforce planning to anticipate and prepare for a variety of potential staffing changes.
In the next article, we will explore how to maximize the benefits of incentives and communication practices during implementation for improved organizational flexibility.