Organizational agility has been a hot success topic for a few years, and it’s more relevant now than ever. As we face COVID-19, a raging global pandemic, many organizations have had to figure out how to pivot to sustain and thrive while business is not as usual.
Agility is an organization’s ability to adapt to changes in its environment or market and address a wide range of consumer demands. Resilience is also a big component of organizational agility. Resilience refers to how quickly and well companies can bounce back after an adverse event or series of events (e.g., COVID).
A 2019 study published in Consulting Psychology Journal: Practice and Research found that businesses with high agility-resilience showed 150% more return on investment and 500% higher returns on equity than those with low agility resilience. While we’re not so concerned with lining our pockets in the nonprofit sector, agility-resilience could lead to an arguably more valuable advantage—greater social impact.
Interestingly, the companies studied did not achieve agility-resilience by the “best practices” that often get thrown around. Most of us have heard about the importance of collaboration and teamwork, continuously driving change and innovation, and conducting formal performance evaluations to be successful. It turns out, we might have some of these “best practices” backward, and these researchers aim to replace them with proposed “better practices.”
Teamwork in Moderation (Versus Constant Collaboration)
There tends to be a “more is better” attitude toward teamwork and collaboration in organizations today. While 90% of organizations are attempting to leverage cooperation, 60-90% of teams fall short of their goals. So, something isn’t working. The authors assert that employees may be suffering from teamwork “fatigue” because of the challenges that come with collaboration (e.g., differing individual experiences, viewpoints, thought processes, etc.).
As an alternative, the authors suggest that leaders and employees consider teamwork on a case-by-case basis, continuously deciding what jobs require collaboration and what projects could be completed more efficiently by individuals.
Real-time Performance Management (Versus Periodic Evaluations)
We’re all familiar with year-end performance reviews — a time set aside for a supervisor to evaluate the employee’s work over the previous year, provide feedback, and set goals for the coming year. However, the research shows that companies that address performance in “real-time” tend to be more agile and resilient.
The key they give to real-time performance management is specific, easy-to-understand, accurate performance metrics. When the data backs up the feedback an employee receives, there’s all-around less disagreement and defensiveness. The researchers give a great example — speeds signs on the side of the road cause real-time speed management by providing the driver the data (i.e., their speed) and allow them to adjust their behavior in real-time. This real-time method is logically more effective than telling drivers how many times the sped during the prior year.
Stability (Versus Constantly Driving Change)
Finally, stability is also associated with organizational agility. This is counterintuitive because most of us associate agility with change and change with instability. However, research shows that stability creates a solid foundation upon which change can occur. In this sense, security refers to a psychological state where employees trust their leadership and the organization and feel safe in their jobs.
The researchers suggest that leaders work to reassure employees that their jobs are secure (to the extent possible), layout concrete plans about how the organization will move forward, and ensure that team members have the resources they need to do their work. Making sure that employees have the resources they need reduces the chance of burnout during times of uncertainty.
It’s important to point out that the study discussed here focused exclusively on for-profit businesses. The researchers chose the for-profit sector because they needed readily available public financial performance data. However, it is not a leap to assume that the underlying themes that surface through this study — simplicity, moderation, focus, and common sense — would also benefit nonprofits during times of change and uncertainty.
Pulakos, E. D., Kantrowitz, T., & Schneider, B. (2019). What leads to organizational agility: It’s not what you think. Consulting Psychology Journal: Practice and Research, 71(4), 305-320. doi:10.1037/cpb0000150