7.1.5 Increasing organisational responsiveness and agility
It is well over a decade since Stalk and Hout (1990) first advanced the notion that speed and responsiveness were crucial in competitive markets. In spite of this, the adoption of new systems and practices has itself been a slow process.
Organisational design, or the way roles are defined within organisations, has a significant impact on organisational agility. Rigid organisational structures and procedures emphasise certainty of outcomes for participants and efficiencies in processes, but they have shown poor capacity to produce innovation. Innovation and organisational agility are stifled by stratified organisational structures conceived in functional terms, where work is defined in terms of procedures and processes, and positions in terms of reporting roles. Such structures are increasingly inappropriate to workplaces where technology is used to perform routine tasks, while non-routine tasks are contracted out to knowledge workers.
Some organisational structures provide greater agility than others. Networks, which are the most dynamic and adaptable of organisational designs, have been gradually replacing traditional structures. At its extreme, the dynamic network consists of a number of market relationships brokered by a 'core' unit. Car manufacturers, for example, are no longer large, hierarchical factory-centred organisations. They now outsource component production, sales and marketing; the result is a network of partners, all centred on manufacturing and selling a vehicle. A more extreme example is online exchange companies, which maintain their virtual presence with a small cadre of administrative staff and mainly coordinate how partnering businesses sell products and services. In this case, conventional notions of organisational boundaries must be discarded.
Networks are more flexible and innovative than traditional structural relationships, and more responsive to changing conditions in products and markets. They are also less constrained in the way they source skills and take advantage of external opportunities.
The main concern in the development of network organisations is their comparative lack of stability and the difficulty of securing commitment from individual participants. Agile organisations not only compete on current strengths and competitive advantages but also nurture the capacity to respond to future opportunities. In network organisations , adaptability may be achieved either by enhancing staff capabilities or by sourcing knowledge outside the organisation. A network organisation may 'graft' on new capabilities by engaging contract employees or outsourcing critical functions. While these tactics can supply performance competencies, it still takes time to build collaboration and instil shared meaning, a sense of purpose and a culture that underpins the desired organisational identity.
Another alternative organisational model is the workplace community . This is a more holistic approach in which community-based values formed within the organisation can change along with the organisation's needs. A third possibility is developing networks of knowledge , which value individual knowledge advancement both by employees and by people outside the organisation. All three of these approaches offer greater flexibility and more permeable organisational boundaries, which are of particular importance in assisting organisations to attune themselves to a changing environment.
Agility must be conceptualised as extending beyond the 'walls' of the organisation. This is not, however, a simple matter of separating out 'internal' and 'external' factors. Organisational knowledge and responsiveness are shaped by many and varied elements - business relationships, relationships with local communities, involvement with other business groups, and actions by government and other corporations (Rigby et al. 2001: 180-4).
The fit between the organisation and the environment is referred to as 'environmental attunement'. For an organisation to survive, it must be compatible with its environment. Increasing complexity and competition, combined with growing interdependence within and beyond the organisation, lead to a need for adaptation and change.
For organisations to achieve environmental fit, their values, norms, processes, reward systems and performance must recognise the importance of people. Agility is achieved above all through the development of capability in individuals, who are thus able to acquire new frames of reference while still achieving current performance outcomes.
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