Wednesday, February 24, 2021

How start-ups can stay agile

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Digital business agility and agile leadership 

Startups are born agile. But agility decreases as the organization grows. To actively and sustainably counteract the creeping loss of agility, agile leadership is needed. 

Digital business agility as a formula for success

According to the HIF model of the IMD Business School, the following three behaviors of an organization are what make digital business agility:

HYPERAWARENESS 

Developments on the market and in technology are constantly monitored. This enables innovative and highly topical products. It also prevents obsolete or outdated products, as the monitoring continues during production and implementation. It is constantly reevaluated whether a product needs to be discontinued, adapted or expanded in order to be align with evolving customer needs or trends. 

INFORMED DECISION-MAKING

Collecting and evaluating information and data is key for informed decision-making. Different channels and sources are identified, and new ways of data collection are explored. The data is systematically and consistently included in decision-making processes. Data decide. 

FAST EXECUTION 

Hyperawareness and informed decision-making will only fully benefit the company, if the organization implements quickly. Speed goes before perfection. Feedback must be responded to and adjustments to new developments must be made immediately. Short decision-making processes and flexibility, but also courage, are needed. 

Dealing with the inertia of masses

Digital business agility is what makes startups emerge. There it is, the idea that hits the nerve and is perfectly tailored to customer needs. The flexible organization that focuses its power and implements it quickly. Success is the result. It goes from the idea generation to the implementation phase. Efficiency is increased, a standard is secured through processes and structures. The company grows and with it the framework that holds it together. Stabilization. 

However, this is no place to lean back and relax as you pay the price: decreasing flexibility and less innovative strength. Be alert: Do you constantly question and adjust the strategy and search for new ideas? Or new customers or markets? Are there still resources allocated to explore? Is it still possible to react quickly to feedback? Are you – being honest – still open for change? 

Maintaining agility in the long term through agile leadership 

While stability automatically results from the inertia of the masses, agility requires effort. It must be continuously stimulated and strengthened. According to the HAVE model (IMD & metaBeratung) that resulted from a global study conducted by the Global Center for Digital Business Transformation, this requires four competencies.

ADAPTABILITY

It is about the willingness and capacity to react immediately to changing circumstances or evolving customer needs. Obtain and use feedback in a targeted manner, e.g. on the business case. Plan on sight. No one should shy away from questioning decisions that have been made and changing their mind. 

HUMILITY

Business agility requires the involvement of all minds. This requires equal footing. The amount of information and the complexity alone lead to the fact that the best solutions are developed in cooperation. The ability to react quickly to new situations is not achieved through command and control, but through empowerment and self-organization where the value creation happens. 

VISIONARY

A strong vision draws the attention to the long-term goal of the organisation and prevents too much satisfaction with the status quo, with what has already been achieved. It is the vision that gives orientation and focuses all energy on advancement. Adjustments to and changes to the strategy thus become course corrections. 

ENGAGEMENT 

Collaboration is the key. Not only to develop the best and creative cross-linked solutions. Engagement also means to gain information and ideas through exchange and interaction with internal and external stakeholders.

In the end, 9 out of 10 start-ups fail because the business case is no longer right or because the start-ups have difficulty in winning customers. This is where the competency model helps start-up entrepreneurs to understand what is expected of them: to call up and integrate feedback from customers and on the business model at an early stage and continuously. To establish the right culture early on, the TEC-model (in: The agile culture code, BusinessVillage) can provide a guide to a future-proof company culture that supports and fosters business agility. 

Further reading: Puckett (2020). THE AGILE CULTURE CODE – A guide to organizational agility. BusinessVillage.

Puckett & Neubauer (2020). Agile leadership. Leadership competencies for the agile transformation. BusinessVillage.

Picture pixabay

Stefanie Puckett: The Agile Culture Code- A guide to organizational agility

The Author

Dr. Stefanie Puckett, director at metaBeratung is a psychologist with about 15 years of international experience as consultant, coach and HR manager. She is a certified executive coach, agile coach and agile practitioner and author of “The agile culture code”. 

Statements of the author and the interviewee do not necessarily represent the editors and the publisher opinion again.

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