WORLDWIDE corporate governance is shifting from top-down command and control structures to a networked organisation of empowered teams. This is the agile model: better aligned to customer needs and more relevant to the aspirations of the knowledgeable workforce of the 21st century.
As the new government looks for ways to improve the results of Pakistan’s public-sector companies, the agile model should be an area of interest for any restructuring plan. For the Boston Consulting Group, the agile model is “a new way of thinking that’s more collaborative, more open, more creative, and much more efficient than other business models”.
The history of agile began in the technology explosion of the third industrial revolution which harnessed information technology to automate production. This made software a key component of all important business functions, but in the 1990s, software development practices were too process-centric to keep up with changing customer requirements in a constantly evolving business environment. By the time an application was finally ready to be deployed, business needs had either evolved or changed.
Organisational structures are changing.
It was against this background that leading software developers started looking at more simplified ways to develop software than the sequenced methodology of the ‘waterfall process’ which, at the time, was the dominant approach.
So in February 2001, 17 software developers, many of whom had pioneered their own versions of ‘lighter’ development processes such as Scrum and Extreme Programming (XP) among others, met in a mountain resort in Utah and issued the ‘Agile Software Development Manifesto’ which consisted of four core values:
All four values were targeted at meeting customer requirements: the process drivers were an environment of regular communication, quick and continuous delivery of completed stages of software, constant customer engagement and the explicit recognition that if customer requirements changed, the changes would be accommodated.
The manifesto, which has been translated into more than 60 languages (including Urdu), immediately became a global movement that has revolutionised software development and delivery. But an equally remarkable outcome over the last decade has been the adoption of the agile philosophy as the foundation for a customer-centric organisation design that stimulates strong employee engagement. According to McKinsey, it is “a fundamentally different and higher performing kind of organisation designed for the complex and constantly evolving markets of the 21st century”.
Every industrial age has had its own paradigm of the business organisation’s structure relating to the distribution of its resources, decision-making mechanisms and how work gets done. The organisational structure that emerged after the second industrial revolution was perfectly suited to the technologies of its time and the nature of its workforce: a governance system of hierarchy and authority that broke down jobs into small, specific tasks and work was directed by managers and supervisors.
The distinctive characteristic of an agile organisation is a two-tiered structure — one represents the primary ‘home’ of employees consisting of traditional and stable functions such as finance and human resources; and the other a dynamic, mission-based non-hierarchical structure built around a network of empowered teams.
For the last five years, Deloitte has conducted global surveys of thousands of executives for their Human Capital Trends report. In the 2016 report based on more than 7,000 responses to a survey in over 130 countries, the number one trend was designing an organisational model built around networks of highly empowered teams; redesigning the organisation was ranked number one in importance for 92 per cent of respondent companies.
And that is how we must understand the quest for, and necessity to, forge organisational models that are simultaneously stable and dynamic and can respond effectively to the challenges of the fourth industrial revolution. The number one trend in Deloitte’s 2017 Human Capital Trends report, based on a survey of more than 10,000 HR and business leaders across 140 countries, was actively building an organisational model around the networks that dominate today’s workplace.
Agile is not a methodology of management practices. It is a mindset that places the customer at the centre of the company’s universe, an idea that has now regained its place as the primary driver of business success.
The writer is an independent consultant and founding president of NEW-G, an entrepreneurship platform.
Published in Dawn, September 12th, 2018