Why organisational agility is vital for business success

05 October 2020 Consultancy.uk 3 min. read
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A new report has demonstrated the many ways in which an agile operating model transformation can benefit businesses. According to the study, half of companies to complete an operational transformations have enjoyed a boost to their market share, as they are more able to out-manoeuvre their competitors to take advantage of change.

While businesses have historically favoured stability as a factor to drive success, the modern world of digital disruption, economic uncertainty and fast-moving change means that this is no longer a practical base to operate from. Instead, firms are increasingly looking to transform their operating models to favour agility, enabling them to adapt quickly to developing trends in their marketplace.

According to a new study from consultancy Gate One, around 87% of senior executives have been involved in transforming their organisation’s operating model in the past three years. Speaking to 300 senior decision-makers at major UK companies, the researchers found that organisational agility was one of the key motivations behind these transformations, with 57% of respondents citing the need to respond to market conditions and enhanced customer experience as the greatest benefits of their operating model transformations.

Top business transformation benefits

“Organisational agility is vital for success in today’s rapidly changing world, commented James Cooper, Client Director at Gate One. “Technology and data are transforming every element of business activity. Customers are becoming ever-more demanding wanting more choice, more convenience, more value and more control. Meanwhile, major world events from pandemics to trade wars and Brexit are shredding the notion of economic stability. Organisations must be ready to challenge and transform their operating models to adapt to new and emerging realities.”

The agility which firms have enjoyed from their business transformation manifests itself in a number of different ways. For example, while 60% of businesses said operational efficiency had been boosted, a further 54% said this had enabled them to develop products and innovations more quickly, while that agility helped 47% gain market share. 

Along with thriving in markets they were already incumbents of, 44% followed this by saying organisational agility had helped them expand into new markets. The financial implications of this growth were that around 42% of transformations had resulted in revenue growth, while just under one-third had boosted profits, and a quarter had reduced the cost of doing business.

Top barriers to effective operating model transformation

Unfortunately, transforming successfully is easier said than done. A litany of barriers still stand between businesses and agile operations, with the biggest problem being that many companies struggle to move beyond a ‘silo mentality.’ 

Just under half of Gate One’s respondents said that the idea of departments and teams only prioritising the goals of their segment – rather than the business as a whole – resulted in a lack of co-operation. Meanwhile, another 40% cited rapidly changing scope, and around one-third cited lack of staff skills, poor quality of external resources and cultural resistance as top barriers, highlighting the importance of change management. 

According to the researchers, organisations are often ill-equipped to undertake operating model transformation work by themselves, meaning external help and a fresh pair of eyes are essential to understanding the best ways to think about and achieve the transformation. External consultants can demonstrate the benefits of thinking about an organisation in a more holistic way, which can act as effective remedy to the siloed thinking of senior directors, who often struggle to achieve as they look at the organisation from the confines of their own department.