Agility, 9-28-10, CW-SM rev am - Center for Effective ... · Agility Dimension Shared Purpose...

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Center for Effective OrganizationsUniversity of Southern California

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Upcoming CEO Seminars and WorkshopsStrategic Organization Design WorkshopNovember 2-5, 2010Bethesda, Maryland

Create High-Performing Teams with P f F d R d St t i

Talent Management & Leadership DevelopmentMarch 29-31, 2011Los Angeles

Beyond Change ManagementPerformance-Focused Rewards StrategiesNovember 10-December 14, 2010Online Program

Data Coaching WorkshopDecember 8-10, 2010

Beyond Change ManagementApril 5-7, 2011Los Angeles

Strategic Organization Design WorkshopJune 14-17, 2011December 8 10, 2010

Los Angeles

Strategic Partnership with ImpactJanuary 26-28, 2011Los Angeles

June 14 17, 2011Los Angeles

Data Coaching WorkshopSeptember 21-23, 2011Los Angelesg

Advanced Topics in Organization Design WorkshopMarch 1-4, 2011Los Angeles

Strategic Partnership with ImpactOctober 19-21, 2011Los Angeles

Strategic Organization Design Workshopg

Targeted Analytics: Improving Talent DecisionsMarch 9-11, 2011 (two days total: start at 1 pm on March 9, end at noon on March 11)D ll /Pl T

November 1-4, 2011Atlanta, Georgia


Dallas/Plano, Texas

Certificate in Organization Design

More Information at http://ceo.usc.edu/programs

Upcoming seminars include:

Strategic Organization Design WorkshopStrategic Organization Design Workshop• November 2-5, 2010 (Bethesda, Maryland)• June 14-17, 2011 (Los Angeles)• November 1-4, 2011 (Atlanta, Georgia)

Advanced Topics in Organization Design • March 1-4, 2011 (Los Angeles)

Also of interest:

Beyond Change Management


y g g• April 5-7, 2011 (Los Angeles)

St ateg fo m lation and

Some of Chris’ focuses

• Strategy formulation and implementation

• Organization design• Longitudinal evaluation of

strategic change• Sustainability and how to

d l ll bDr. Christopher G. Worley

design complex collaborations to foster it

CEO Research Scientist


• Widely known for organization

Some of Sue’s focuses

design and effectiveness and large-scale change research

• The design of knowledge-based firms

• Knowledge creating systems• Sustainability and how to

Dr. Susan A. MohrmanCEO Senior Research Scientist y

design complex collaborations to foster it

• Examination of the research

CEO Senior Research Scientist

process itself• How to create

academic/company


/ p ypartnerships to yield useful knowledge

Agility and Strategic LeadershipAgility and Strategic Leadership

Emerging Results g gand

Organization Implicationsg p

Christopher G. Worley, Ph.D.Research Scientistcworley@marshall usc edu


[email protected]

Overview• USC/CEO is interested in the question:

Does agility matter?

• The rhetoric around agility is clear – in a world that is changing faster and faster, organizations must be

i bl d fl ibl bl t t k d t fnimble and flexible, able to take advantage of opportunities that present themselves

• But such rhetoric flies in the face of business models that link performance with scale, efficiency, control over processes, and being “lean and mean.”


What is Agility?Agility is an evolving and emerging capability, a leadership challenge

that is never finished, only approached over time, but which yields consistently high levels of sustainable effectiveness.

Planned Change

AgilityS d

AdaptabilityO i tiChange

• Organization DevelopmentT iti

• Sense and Respond

• Reconfigure and Redesign

• Organization evolution

• Absorptive capacity• Transition

Management• Change Management

and Redesign• Complexity

capacity• Population ecology

Management


Patterns of Performance

0.2000

Consistent high performer

0 1000

0.1500

Consistent high performer

0.0500

0.1000

ROA

Ind Avg Large Food Cos

SARA LEE CORP

TYSON FOODS INC

SO O

0.0000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

CAMPBELL SOUP CO

‐0.1000

‐0.0500

Chronic low performerClassic “boom-bust”


Agile organizations have a set of unique characteristics in major dimensions thatcharacteristics in major dimensions that create a reinforcing system

STRATEGY & PURPOSE

ORGANIZATIONDESIGN

DYNAMICCAPABILITIES

• ADAPTABILITY• SUSTAINED PERFORMANCE

LEADERSHIP& CULTURE

PERFORMANCE

& CULTURE


Research Data• Survey data from 42 firms and business units

– 14 scales on strategy, organization design, leadership and capabilitiesleadership and capabilities

– 74.8 surveys/firm (range = 6 to 1098)– Sample include the top management team, aSample include the top management team, a

sample of firm managers, or functional samples• Performance data from 31 public firms

– ROA over 29 years (mean = 22.5 years; mode = 29 years)“Consistent high performance” defined as– Consistent high performance defined as above average for at least 80% of the years available


Consistently above average performers scored significantly higher than inconsistent performerssignificantly higher than inconsistent performers

Agility Dimension t df pStrong shared purpose 2.71 12 0.02Develops robust strategies 2.70 28 0.01Strong future focus 1.23 28 0.23gChange‐friendly identity 2.30 29 0.03Structural surface area 3.12 28 0.00Information is transparent 1 08 29 0 29Information is transparent 1.08 29 0.29Flexible resources 2.05 29 0.05Development orientation 2.30 29 0.03Fl ibl d 2 11 29 0 04Flexible rewards 2.11 29 0.04Top/Bottom communication 0.36 12 0.73Shared leadership 2.68 29 0.01


Encourages innovation 1.85 29 0.07Change capability 2.61 28 0.01Learning capability 2.57 28 0.02

Not at all A littleTo some extent

To a moderate extent

To a large extent

Agility Dimension

Shared Purpose

Robust Strategies

1 2 3 4 5

Strong Future Focus

Flexible Structure

Transparent Infop

Top/Bottom Aligned Communication

Flexible Resources

Talent Development

Flexible Rewards

Shared LeadershipShared Leadership

Change‐Friendly Identity

Change Capability Legend:Consistently High Performer


Learning Capability

Encourages Innovation

Inconsistent Performer



To a large extent

Agile organizations have a different way of

Agility Dimension

Shared Purpose

Robust Strategies

1 2 3 4 5thinking about strategy

Strong Future Focus

Flexible Structure

Transparent Infop


Flexible Resources

Talent Development

Flexible Rewards





Learning Capability





To a large extent

Agility Dimension

Shared Purpose

Robust Strategies

1 2 3 4 5

Agile organizations have maximum

Strong Future Focus

Flexible Structure

Transparent Info

have maximum surface area structures

p


Flexible Resources

Talent Development

Flexible Rewards





Learning Capability





To a large extent

Agility Dimension

Shared Purpose

Robust Strategies

1 2 3 4 5

Strong Future Focus

Flexible Structure

Transparent Infop


Flexible Resources

Leadership is an organization capacity with roots and support in the culture and

Talent Development

Flexible Rewards

Shared Leadership

in the culture and reputation

Shared Leadership



What creates value in agile organizations is the ability to change


Learning Capability


Inconsistent Performerand learn



To a large extent

Agility Dimension

Shared Purpose

Robust Strategies

1 2 3 4 5

Strong Future Focus

Flexible Structure

Transparent Info Scores inp


Flexible Resources

Leadership is an organization capacity with roots and support in the culture and

Scores, in general, are pretty low.

There’s plenty Talent Development

Flexible Rewards

Shared Leadership

in the culture and reputation

of room for improvement.

Shared Leadership



What creates value in agile organizations is the ability to change


Learning Capability


Inconsistent Performerand learn

Best Practice Examples

Agility Dimension

Strong Future FocusStrong Future Focus

Robust Strategy

Maximum Surface Area St tStructure

Flexible Resource Allocation Process

Flexible Rewards

Flexible HR Practices

Change‐friendly IdentityChange‐friendly Identity

Shared Leadership/Power

Change/Learning


Capability

Conclusions• Any organization that survives over a long period of time

has some agile characteristics– Agility can be measured– Agility is not the domain of service, high tech firms -

agile organizations can exist in any industry– Agility matters – Organizations with consistently above

l l f f i ifi l hi haverage levels of performance score significantly higher on agility dimensions

– There’s lots of room for improvement

• Future Research– How best to make the transformation to agility?– Can agility and sustainability be complimentary?Can agility and sustainability be complimentary?– What is HR’s role in agility?


If agility is so cool, why haven’t more organizations joined in?organizations joined in?

• Organization inertia is real – Alignment is the enemy of change. Traditional structures are built to be self-reinforcing. CEO t d k t t ti f t l f• CEO turnover and market expectations for quarterly performance

• Becoming agile requires systemic change – it’s not just change in strategy or structure or R&D or workforce engagement - it’s all of those

• Becoming agile is counter-intuitive – it challenges many of the taken-for-g g g ygranted assumptions we have about managing:

– Growth is stability in change’s clothing – growth invokes a “patina” of change, covers a multitude of sins, and rarely changes anything (other than size)

– To build a shared leadership capacity, change may have to be driven from the topp p y g y p– Slack is not necessarily a bad thing – nor is efficiency necessarily a good thing– Strategy rarely changes and changes all the time– Achieving resource flexibility may mean abandoning investments in traditional

HR practices (e.g., job descriptions, rewards for seniority/promotion) that p ( g , j p , y p )support stability and risk avoidance

– Embracing uncertainty and change as sources of performance feels wrong; reducing uncertainty and increasing reliability and predictability feels right.


Current Agility Profile(Compared to Current World-class Benchmark)(Compared to Current World-class Benchmark)

Agility Factor SAgility Factor S

Change capability

STRATEGY & PURPOSE

Robust Strategy

Shared purpose

Future focus

Change capability

Learning capability

Innovation capability

ORGANIZATIONDESIGN

CAPABILITIES

• Orchestration• Learning

• ADAPTABILITY• SUSTAINED

PERFORMANCE

Agility Factor S

Structural flexibility

LEADERSHIP& CULTURE

• Learning• Innovation

PERFORMANCEResource flexibility

HR flexibility

Information transparencyiliDevelopment orientation Agility Factor S

Shared leadership

Shared power

Change friendly identity


Change‐friendly identity

Agility, 9-28-10, CW-SM rev am - Center for Effective ... · Agility Dimension Shared Purpose...

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