AGILIZATION (Book) 2023_Jake
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AGILITY THEBOOKON ORGANISATIONAL DESIGN IAN. C. TOMLIN
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This book is one of a series of books and instructional guides written by Ian C. Tomlin, a management consultant and tech innovator, published by Newton Day Publishing in eBook format. His books help to short-cut the learning time needed for executives to master subjects that impact directly on their business and career success. In this series: THE EXPERIENCE IS EVERYTHING—The Little Book of Organisational Behavioural Design (Due Sept 2023!) KYBERNAN—The Little Book of Big Business Decisions Published date: July 2023 CUSTOMER VALUE—Marketing Growth Hacks Published date: March 2007, Updated AGILIZATION—How to Design and Agile Business Published date: March 2007, Updated Other books and guides written by Ian Tomlin include: Cloud Coffee House (Management Books 2000) Published date: June 2008 Social Operating Systems (Management Books 2000) Published date: October 2009 Above And Beyond OrgDesign First published date: August 2014, updated 2019 Above And Beyond Growth First published date: May 2015, updated 2019 Above And Beyond Brand First published date: March 2012, Updated 2018 Above And Beyond YOU First published date: March 2016, Updated 2019 Above And Beyond Business Intelligence Published date: August 2019 Above And Beyond Conversational Marketing First published date: November 2018 © Newton Day Publishing 2023
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Every effort has been made to obtain the necessary permissions concerning copyright material, both illustrated and quoted. We apologise for any omissions in this respect and will be pleased to make the appropriate acknowledgment in any future edition. All trademarks and trade names mentioned in this document remain the property of the respective owners. Ian C. Tomlin has asserted his rights under the Copyright, Designs and Patents Act 1988 to be identified as the author of this work. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without the prior permission of the publishers. Copyright © Ian C. Tomlin 2023 All rights reserved. Write to Ian C. Tomlin at: Newton Day Ltd 3rd Floor, 86-90 Paul Street London EC2A 4NE www.newtonday.uk
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QUOTESANDTESTIMONIALS “I find myself agreeing with many of the ideas in this book.Like Kaplan, Tomlin injects ideas but leaves leaders to consider how to apply the learning lessons.” Lowell L.Bryan, McKinsey & Co. “Plenty to grip the reader.Ian has a writing style that appeals to experienced businesspeople and newcomers to the business world alike.” Dr.Martin Vasey, Director of Global Knowledge, Energy, Chemicals and Utilities, Ernst & Young (now retired). “Makes sense of complex organisational change issues in a way that anyone would understand them.Business leaders that don’t take time out to sit and read this book will wish to heaven they had.” Jane Ling, Director, Ling Turner. "This is a must for the bookshelves of any manager wanting to ensure their organisation can survive in the complex adaptive system which is the reality of the business world of today.The book is both insightful and pragmatic: insightful as it redefines business agility and paints a picture of the successful organisation of the future, or indeed of today; pragmatic through its "how to" examples and stories of experience which bring the subject to life." Peter Franklin, CEO, enstra consulting. “It’s a book that encourages leaders to adopt a more thoughtful, externally focused management philosophy that is coming to define successful corporations.” Mike Clargo, CEO, Inspirometer.
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“This book is the innovation manual to revitalise managerial thinking.It provides a convincing direction and enthusiasm to act beyond what has become conventional. This is a chance to put on a good race with inspiration for a solid game-plan yet with room for lots of creativity.The reward is a gratifying business existence in the new society the emergence of which most of us already sense.Perfect timing.A refresh button for the business world that we take for granted.” Tonis Haamer, CEO, Overall Eesti. “Implementing less than half of the lessons in this book would make most corporations leaders in their industry.” “Implementing less than half of the lessons in this book would make most corporations leaders in their industry.” John Taylor, PA Consulting. “Many organisations haven’t changed the way they think and work in decades.Exposing these issues and finding a route to greater levels of agility is something most corporations can benefit from.” Bob Kiley, Transport for London (Passed) “A thought provoking valuable read for any business leader" Nick Dodds, CEO, CWP Consultants.
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Business Agility Definition: AN ORGANISATION ABLE TO SERVE ITS MOST PROFITABLE MARKETS BY HARNESSING INSIGHTS AND APPLY ING THEM TO ADAPT CAPABILITIES, RESOURCES, VALUE, (ETC.,) AND THEREBY DEVELOP NEW BUSINESS MODELS.
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CONTENTS INTRODUCTION WHY BUSINESSES NEED TO BE AGILE MAKING A BUSINESS AGILE LEADERSHIP ALIGNMENT OPERATING APPROACH PROCESS INSIGHT CURIOSITY PEOPLE TECHNOLOGY PROCUREMENT FINAL THOUGHTS 10 16 18 23 34 56 74 80 105 118 132 149 158
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PREFACE his book is about organisational design. It’s a topic that rarely gets discussed outside of the Human Resources department, but maybe it Tshould. If you don’t purposefully design your organisation, its design forms organically and itsfit-for-purpose performance will ultimately define your results. Organisational design is a broader subject than that of how to allocate and manage people. It’s about how you construct an ability to listen and anticipate market and business changes. Sub topics include strategic alignment, of designing cultural behaviours that lead to habits. It’s also about people, process, data, and technology. The termbusiness agilityis frequently raised in management circles but I’m not sure many business professionals or leaders genuinely take it that seriously. There is noOD Department. There is nostrategy for OD. I think leaders should take it more seriously, and this is why: Success in the modern business world comes from identifying what customers want to pay for and rapidly responding to opportunities with best-fit products and services.This single capability separates market leaders from the chasing pack. In this regard small companies have an advantage.They are naturally intimate with their customers, understand fully what they’re capable of, what they’re trying to achieve. As companies grow, they become lessflexible and more segregated, dysfunctional, loose their passion—they become stale and institutionalised in how they think. Consequently, they lose their way. Attend a management school today and chances are you’re going to be educated in many business topics but organisational design is not likely to get more than a mention on the syllabus. My personal experiences told me (two decades ago now) that textbooks on ‘How business works’ were out-of-date and many of the old rules of business had changed.Things haven’t moved on. Education continues to drag at least a decade behind the cutting edge of business thinking. he origins and most of the contentious will read in this book come from AGILIZATION—thefirst book I ever wrote. I began writing when I couldn’t T find a book to describe how businesses could match a rapidly changing opportunity landscape with a similarly adaptive organisational design.I expected tofind on the shelf of my local bookshop a guide with easy-to-read explanations of methods.But I couldn’t. Instead, I wrote this book. To be agile is what any organisation, big or small, should aspire to be: To have the capacity to repeatedly originate best-fit solutions for profitable markets.
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In this book I examine the evolving commercial environment that makes agility— and the adaptive organisational design it infers—thetopic for business leaders. Society is changing, and with it, the relationship between buyers, sellers, data providers and industry partners. Digital living has introduced a new purity to competitive thinking. It exposes the importance of forensically understanding who your customers are, how they think, their habits, passions, the impulses that motivate them to buy, what brand and personalisation means to them—and that’s only the beginning. IN THE DIGITAL AGE, THOSE SUPPLIERS BEST ABLE TO DELIVER THE MAXIMUM CUSTOMER VALUE WIN. This book answersfourimportant questions: 1.Why is agility so critical to business success? 2.What is an agile business? 3.What characteristics go to make a business agile? 4.How can organisations measure their level of agility? LEADERSHIPVISIONANDMINDSETISCRUCIAL Leaders that encourage their organisations to adopt agile behaviours can achieve first mover advantageandprofitfrom opportunities as they emerge. They will be thefirst to develop meaningful relationships with the many new types of organisations that will emerge to embrace consumer preferences and self- expression,first to develop new business models,first to market with products that consumers want to pay for. These market dynamics require that organisations alwaysfind the bestfit between customer demands and their capabilities. In my research for this book I interviewed leaders of organisations and fellow consultants to better understand how agility can be designed into the way organisations work; how it will change the culture, management attitudes and make-up of organisations, and ultimately differentiate the successful enterprise of tomorrow from the archetypal enterprise designs of today. Agile businesses that apply these lessons will enjoy the capacity to react faster to opportunities – and grow beyond the pace of their competitors.
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1. INTRODUCTION Were you to sit back in your armchair and design the perfect business organisation, what would that slick corporate machine look like? ow should a 21st century organisation be engineered?Would it have a small centre, harness the skills of specialist individuals and partners to stay Hsmall and nimble? Be a caring employer and have motivated people, embrace innovation? Be more responsive to markets than competitors? Agility is so often mentioned today.The term has become the new ‘black dress’ of business.Every now and again organisations appear compelled to meddle with departmental structures, with no clear outcome. This has a huge negative impact on staff, sometimes, customers—but rarely does it appear to surface any great business benefit. The ambition of business improvement should not be to move from one rigid organisational structure to the next.Don’t be this kind of leader. You don’t want to be a leader who focuses on making change with too little thought about why. hange is a constant.It necessitates afluid structure so your business is always able tofit profitable markets at any point in time.That’s the C difference betweenbusiness adaptability, i.e., the ability of a business to adapt from one state to the next, and anagile businessthat has a mind-set and behaviour that results in an organisation able to repeatedlyfit profitable markets. Designed an agile business demands a new way of thinking about how your enterprise is structured and how it behaves. AN AGILE BUSINESS SENSES AND REACTS TO NEW SOURCES AND FORMS OF DEMAND TO THEN ENGINEER ORGANISATIONAL STRUCTURES AND BEHAVIOURS TO MEET THIS DEMAND.WITH THE STRUCTURE OF MARKETS CONSTANTLY CHANGING, AGILITY IS THE ‘X-FACTOR’ THAT DIFFERENTIATES 21ST CENTURY BUSINESSES AND ENSURES SUCCESS AND SUSTAINABILITY.
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BUILDATEAMTHATCANDOANYTHING Being part of a customer-focused, fast changing business is exhilarating. It’s great to be part of a successful team with people performing at the top of their game, given the head-room to try out new things.One person’s success motivates another and people are always learning and growing. Visualise a place where people feel they’re doing something meaningful with their lives.Fast growing organisations are great places to be. Profitable.Fun.So why isn’t every business agile? The fundamentals of business don’t change. Companies must create customers and grow their profitability, manage costs and keep customers happy.In the past, companies could achieve these ambitions by adopting business models that remained more or less the same for years.It’s no longer possible.The pace of change in global markets is unprecedented. Don’t think either that there’s a threshold or that at some point the pace of change will slow.It won’t.We’re entering a new era of social interaction with forms of communication catapulting our society into ‘something different’ that we cannot comprehend.In response, leaders must challenge assumptions about how they run their businesses and the operating models they choose – not every decade, more like every quarter. A survey by the Economist Intelligence Unit of 336 senior executives, one quarter of whom were CEOs, found that 47% of respondents anticipated major changes to their business model within three years.Hyper-competitive global markets of the 21st century demand a kind of organisation that thinks and behaves differently. ABOUTBUSINESSAGILITY The idea of business agility is nothing new.I remember it was also big news in the eighties.Back then, I remember thinking at the time, “It makes sense to me that organisations should be able toflex and change rapidly but how USEFUL is agility?And what does an agile organisation look like?” The commonly-held view of agility in business is that it’s about processes and how they adapt to changes in the business environment.If you don’t define your organisational design, it will design you. Business processes are often shaped by inflexible organisational structures and institutionalised behaviours that evolve over time and echo ‘static’ management thinking, probably formed around priorities that once met a prevailing market need. Business agility is about more thanflexible processes.An agile business always fits its most profitable markets and is the sum of a number of characteristics:
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‘It’s about timing’.Some businesses always appear to know when to enter a market and what customer value they need to deliver when they do. Tesco introduced a catalogue shopping service in the mid 2000’s.It meant going toe-to-toe against the UK’s king of catalogue retail, Argos.But they didn’t choose to emulate Argos.Instead they exploited their capabilities in e-commerce, customer insight (through their excellent Club Card customer incentive scheme) and remarkable logistics infrastructure.Combining these capabilities they could provide a value-differentiating service that gave customers the ability to browse through products in a glossy printed catalogue or purchase online, spend Club Card points on new purchases and have goods delivered to local Tesco store with free delivery. ‘It’s about knowing’.Tesco operates one of the most sophisticated customer insight capture systems in the world which is why the company understands so much about what its customers value and what it needs to deliver when it launches a new business line.Nick and I spend most of our time in meetings with business managers advising them on what matters to their customers – because we listen to their customers.You might think it’s incredible that any organisation could do business without understanding how they deliver customer value.Incredibly, many management teams rarely invest time in acquiring customer insight and formalising how this information cascades through the organisation.Tesco knows the strategic value of listening to, and learning from its customers – and embeds this behaviour at both operational and strategic levels.Through this insight it can anticipate where new customer value will come from.Tesco is already agile – it constantly demonstrates an ability tofit profitable markets within its brand reach. ‘It’s about identifying new opportunities’. The march of technology and pace of market change means that windows of opportunity are smaller than they once were.Advanced warning of new opportunities is shorter.Diminishing reaction times create demand for technology that forewarns management teams of weak signals signposting a change in the competitive environment. ‘It’s about contextualising information from the outside world and making sense of it’. The Internet has created an information explosion.How much of this information makes a real impact on business opportunity? Data only becomes information when it is timely, and it only becomes insightful when contextualised for a purpose. ‘It’s about acting’.It doesn’t matter how many ‘signals’ come from customers and markets unless there’s someone paying attention nothing is going to happen.Most organisations do not employ people to listen to what the outside world is telling them.
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‘It’s about being able to act’.How many inventions have failed to reach their market through lack of money or an organisation to support them? Corporations fail to act on insight and turn it into shareholder value for many different reasons.Agility creates an organisation that can roll with the punches. A Fortune® magazine study in the early 2000’s found that “Less than 10% of strategies effectively formulated are executed”. oardroom strategies fail to translate into actionable plans largely because departmental budgets take precedence.Middle managers are Bremunerated for achieving departmental targets and that is precisely what they do.Most corporations do not act in a coherent, logical way. Creating organisational agility demands that people are motivated to work together in a more inclusive, cohesive way. To become more agile, leaders must grasp new ways of working and thinking. Thankfully, most of the challenges facing corporations are already understood. Someone, somewhere has already found – or is working on – a solution. SOCIETYISCONSTANTLYCHANGING A digitally enabled society demands a different way of doing business. A society that is changing rapidly creates a business environment in a constant state offlux. We live in the 24-hour global markets of the digital age.These conditions establish a new dynamic in market behaviours including morefluidity in the structure of markets. In response, operational models are changing ever more rapidly.Sustainable profitability now depends upon the ability of executives to constantly review their methods of operation. Leaders face the discomfort of living in a dynamic business environment they cannot control. Customer demand is no longer without influence on the enterprise, it cannot now be ignored or brushed off. Leaders can ill afford to ignore the influence of changes in the external environment as so many could in the late 20th century. To achieve strategic goals corporate leaders have to reacquaint themselves with the skill of harnessing the prevailing external forces that exert control over their enterprise.
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BUSINESSES must author an agile organisational design that equips them to deliver sustainable profits. In thefirst section of this book I outline the factors driving the need of organisations to change the way they work.Corporations of the Western world desperately need to learn and apply these lessons new approaches if they’re to regenerate their competitiveness. Later, I describe the qualities that will influence the success of tomorrow’s world- class organisations; an enterprise that is able to listen and respond to what matters most to its customers that can think and act faster than its competitors. It creates a driven, outward-looking, loosely coupled organisation that is always anticipating what might come next.It is made up of free thinking, high-performing individuals, given the head-room to constantly question norms of behaviour and encouragement to innovate; an enterprise that repeatedly aligns its strengths to meet market opportunities as they arise—to alwaysfit its most profitable market.
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Seek not the favour of the multitude; it is seldom got by honest and lawful means.But seek the testimony of few; and number not voices, but weigh them. Immanuel Kant