CLUB EXCELENCIA EN GESTIÓN

Transcription

1 THE AGILITY PULSE

2 CLUB EXCELENCIA EN GESTIÓN WE ARE a business association, founded in Spain in 1991, whose MISSION is to help organizations succeed, through the improvement of management. We provide our members, and society in general, the opportunity to improve the management and results of their organizations, connect with other professionals and expand their network, give visibility to their organization and be recognized for their achievements and excellent results. Club Excelencia en Gestión is the EFQM primary partner in Spain since We have more than 230 members from the most diverse sectors and sizes, which currently represents 20% of GDP and 25% of IBEX35. Esta obra está sujeta a la licencia ReconocimientoNoComercial-SinObra-Derivada 4.0 Internacional de Creative Commons

3 Contents Introduction... 4 Summary of Conclusions... 6 The Reference Model... 9 Results of The Agility Pulse Appendix 1 Segmented Scores Appendix 2 Characteristics of the organisations Appendix 3 Declared times for determined actions Appendix 4 Segmentation of participating organisations... 47

4 Introduction Agility is one of the 8 values of excellence because it allows organisations to identify and respond efficiently and effectively to opportunity and threats posed by the business environment. Everyday we see examples where being the biggest doesn t bring with it a guarantee of success, or for that matter survival. Being the best does that. Today, in order to be the best, you must be quick. When Netflix was founded in 1997, the biggest film & TV Company in the world was Blockbuster. The quickest eat the slowest. Netflix built on its strengths and took advantage of the opportunities it saw ahead. Apple surpassed the big mobile phone companies Motorola and Nokia in just 1 ½ years. In order to be agile in the market, it s essential to have strategic awareness, to be internally quick as well as having a powerful and flexible organisation. It s also important to manage resources smoothly in order to transfer them from products or opportunities in decline to new projects with a future. However, all this isn t achieved without a committed workforce. Agility and speed characterise the new age. They require sufficient mobilisation from each and every element and criteria to be able to build an excellently managed organisation. Starting with leadership and going via strategic planning, whose timeframes have been sensibly reduced, the organisation's talent is taken into account when considering the delivery of final decisions, providing any needed technical support and client-centred processes and products. In other words, combining the expectations of all interest groups in a balanced way and producing planned results, all the while being innovative. Agility and speed characterise the new age. They require sufficient mobilisation from each and every element and criteria to be able to build an excellently managed organisation. Starting with leadership and going via strategic planning, whose timeframes have been sensibly reduced, the organisation's talent is taken into account when considering the delivery of final decisions, providing any needed technical support and client-centred processes and products. In other words, combining the expectations of all interest groups in a balanced way and producing planned results, all the while being innovative. These are the reasons why the EFQM and Club Excelencia en Gestión were driven to align with Cegos in order to establish an initial measurement of Agility within companies and organisations. 4 The Agility Pulse

5 Introduction to the methodology The Agility Pulse answers the calling to uncover how and to what degree Spanish and European organisations adopt and instil management systems that allow them to become more agile. Organisations will be able to use the conclusions and recommendations this study identifies as a reference point to improve their own management, and in doing so, improve their competitive edge and differentiation among their peers. This survey has been co-created by the EFQM, Club Excelencia en Gestión (Primary Partner of the EFQM in Spain) and the consultancy and training firm Cegos, who are international specialists in the development of organisational agility as well as change initiatives. The calculation of the Agility Pulse uses replies gathered from anonymous organisations, that have been invited to take part by the EFQM, Club Excelencia en Gestión, Cegos as well as through the partner network. Each organisation participates by completing a simple online questionnaire, where they evaluate the agility of their own organisation, from their point of view. A balance between the amount of information captured and the efficiency at the time of answering has been carefully considered in the questionnaire's design. As a consequence, the information of this study is also presented in an easy-to-follow structure and based on the following aspects: An average score associated to each of the agile management concepts/characteristics (this score is shown in the upper right corner of the questions and corresponds to a global score worldwide). Presentation of the results gained from Management and Director level responses that have completed the questionnaire worldwide, divided into regions or territories taking into account the number of participants. Comprehension and concise interpretation of obtained results. Identification of key points and recommendations for organisational agility improvement. We are confident that the information, data, recommendations and conclusions from The Agility Pulse are valuable for it s users and consequently contribute to improving their organisational agility and their path to improve competitivity and differentiation. 5 The Agility Pulse

6 Summary of Conclusions Characteristics of Organisational Agility Challenges to improve Agility

7 5 identified characteristics of Organisational Agility Organisations close to Approved in the management of their Agility Orientated towards managing their structure rather than speed More concentrated on launching actions than supplying identification mechanisms for threats and opportunities or for decision making More focused on resource management and people's commitment than a strategic position. Size doesn t matter The biggest organisations are more agile than the smaller ones due to their system development and more advanced management models. As such, they have better organisational mechanisms associated with speed. Clients and employees are the bosses The main reason for organisation to anticipate action or react is the change of client and employee needs and expectation. Action over reflection In general, organisations run very much to start deploying actions while there are few mechanisms to identify threats and opportunities and for the analysis and decision process thereof. People and technology are key for the development of Agility Digitalisation and people awareness are the most developed actions in organisations in order to become more agile. 7 The Agility Pulse

8 5 challenges to improve Organisational Agility Know your true speed 1 in 4 don t know their performance speed and those that do, aren t measuring intermediary lead times (no end to end) or times through the eyes of the client 1 in 2 don t know the speed of their own decision making Develop employees skills and empower them, to make them more agile Employee empowerment isn t widespread and presents a clear path of improvement Increase permeability in order to identify threats and opportunities The responsibility of detection rests mainly on the people in charge at their various levels, without external sources being taken advantage of (suppliers, partners, clients, etc.) Improved data management for decision makers to present path to improvement The use departmental applications and tools as their data source is more common place than tools within a global common environment. On the other hand a significant percentage use manual calculations Evolve the project management approach In general, the most commonly used measurements are for planning phases, responsibilities and budgets although risk management, project communication for key activities are not usually measurement because of their impact on potential project delays 8 The Agility Pulse

9 The Reference Model Study Objectives Reference Methodologies Building The Agility Pulse Content of The Agility Pulse Model

10 Study Objectives The Agility Pulse has been designed and developed with the intention of achieving 4 challenges. Challenge 1 Circulate a model of reference for the management of organizational agility that guides organizations on the aspects that make it easier for them Challenge 2 Suggest key aspects to improve Organisational Agility within the different elements that the Agility Pulse covers Challenge 3 Quantify the level of management for Organisational Agility such as providing comparative information between organisations by way of stimulating improvement growth. Challenge 4 Identify areas of global improvement for the design of training solutions that leverage people within the organisation and develops Organisational Agility 10 The Agility Pulse

11 Reference Methodologies The Agility Pulse has been compiled considering three key references, drawing on their knowledge and experience. This mix has enabled the design of a definite model, which is practical and orientated towards a realistic implementation. Building The Agility Pulse 11 The Agility Pulse

12 Content of The Agility Pulse Model The Agility Pulse Model is based on the combination of three key elements: The attributes that characterise an agile organisation, the sequence that determines the steps for achieving agility and the principles in which change is based on to result in agility. The crossroads of elements determine the requirements that characterise an agile organisation. 12 The Agility Pulse

13 Results of The Agility Pulse Influencers and Obstacles to being an agile organisation Self assessment of the Organisation s Agility level Overall Results Individual Question Results

14 Influencers and Obstacles to being an agile organisation The main areas that influence or cause a barrier to organisations are related to each other, in most cases through people, leadership and, on a much lower scale they are connected to the strategy or resource management of the organisation. Although people and leaders are key in the development of an Agility Culture, it s essential that these are characterised by their attitude, have information and knowledge available to them as well as channels and processes in order to become more agile. All these aspects should be focused from a holistic perspective going beyond it being just a responsibility for Human Resources cover, and involve all areas of the organisation. Self assessment of the Organisation s Agility level In general the organisations consider they have an acceptable level of Agility and also that are equal to or more agile that other organisations in their sector. Having a clear and real view of the organisation s agility is important. In general Agility is associated with speed; although this relationship is correct, it s incomplete. When defining agility, it s essential to include the organisation as well as where the Agility is being developed. In other words, the Agility Pulse Model represents a possible starting point to then deploy the same Agility concept within the organisation, and by doing so, make use of a more balanced viewpoint regarding the organisation s situation. 14 The Agility Pulse

15 Results of The Agility Pulse 15 The Agility Pulse

16 How is the performance speed of your current organisation measured? Approximately, 1 in 4 organisations don t measure their performance speed. Overall, organisations use 1 or 2 measurement procedures. The most common are focused on measuring department response and client or employee perceptions through the means of surveys. Comparative studies per sector and Client mystery Shopping are minimal Response speed is key for the client or employee and represents one of the value proposals normally proposed but organisations. Because of this, it s important to have ways of measuring speed available through a scorecard that includes, for example: Interest Group observations (client or employee) Response time measurements (This figure could be associated with the previous observations) Response time measurements of the different processes that generate a finished product for either client or employee On the other hand, making comparisons with other organisations is important in order to have a reference and with that, calibrate other possible alternatives for the client. 16 The Agility Pulse

17 Are response speed-related objectives being considered by your organisation? Approximately 1 in 3 organisations don t establish objectives associated with speed. Proposing objectives taking into consideration either Interest groups or strategical requirements is exceptional. The most common objective proposal is made using indicators or results from surveys. Improvement in speed should be based on, among other aspects, confirming objectives for improvement. These objectives should be proposed: Considering client expectations. These can be identified through a Focus Group and interviews using the corresponding quantitative calibration. Considering which aspects of speed could be more important for the client, ie: Telephone assistant, issue resolving, warrantee replacement, etc. Taking into account strategy content and the necessary speed needed for achieving it. Considering the route map, defining in the Strategic Plan, is also important to identify the need for a speedy deployment and, as a consequence, objectives associated with speed. 17 The Agility Pulse

18 What is your organisation doing in order to be more agile? Digitalising key processes and awareness actions and communication are the main actions being developed by organisations, although these priorities are not the same in all territorial segments. Overall, Organisations are developing a mix made up of 2 actions. The digitalising of key processes should accompany measures towards improving the digital skills of their staff. In doing so, there s a guarantee that the benefits of new digital elements are made use of daily. On the other hand, Awareness actions and communication to staff of the organisation are more successful if they are accompanied by process changes or changing in the way of working (ie: reducing hierarchical levels). 18 The Agility Pulse

19 What causes reactive or anticipatory action within your organisation? Around 3 in 4 organisations activate changes driven by changes in client or employee expectations. Diverse sources of change activation are used on a grand scale. In order to efficiently detect changes in the needs of clients or employees, it s important to make observations that include the following measures, among others: Questionnaires in person and virtually. Tracking usage patterns of products and services through objective data (not perception). The analysis of competitor products and services as well as those of similar sectors to the one in which the organization operates. In the case where a organization has several business units (or several customer segments) they must develop this dynamic through a standardised methodology or, where appropriate, through a single management area. 19 The Agility Pulse

20 Who identifies the opportunities and threats within your organisation? Overall there are 2 sources used by organisations. Director level is the main area in charge of identifying threats and opportunities along with Directors for each department. On the other hand, external sources are not found to be used on a wide scale. The fundamentals of effective threat and opportunity detection is that it should be quick, reliable and about relevant issues or questions, etc. These attributes have more value when the permeability of the organization is greater, establishing formal channels so that the people effected, as well as their partners and suppliers, can inform or participate in the identification itself. On the other hand, the entire hierarchical structure of the organization, at its different levels, must have aligned criteria in order to identify threats and opportunities (What they re about, where they are..) and to make a decision (when is it necessary to act). 20 The Agility Pulse

21 How are detected opportunities and threats communicated? Overall, organisations use 2 communication channels to channel detected opportunities and threats. The main mode of communication is group meetings, although collaborative platforms or remote systems are used less frequently. This observation in their behaviour could imply a bottleneck buildup, which is a very important aspect when detecting threats and opportunities quickly and with a likely frequently The level of threats and opportunities is very variable, ranging from strategic, tactical to operational aspects of day to day operations. As such, the communication of these aspects could be structured using the following points: 6 monthly communication of new threats and opportunities regarding the Strategic Plan and the corresponding action plan. This communication should be done in face-to-face and filter down involving the hierarchical structure. Monthly communication of threats and opportunities in the tactical area of business, which could be carried out digitally, for example through newsletters or bulletins. Daily communication of threats and opportunities in daily operational life. This information (normally related to current competitor movements) could be shared quickly to a greater number of staff and using Social Media channels would be recommendable. 21 The Agility Pulse

22 How are technological advances relevant to your organisation identified? Overall, 2 in 10 organizations do not develop a system to identify technological innovations. On the other hand, in general, organizations use two inputs to detect of technological innovations, the most repeated sources being the new technologies offered by technological suppliers, trade fairs and meetings. More than half of the organizations consider that the technology used allows them to be agile How much do you think the technology used by your organisation allows it to be more agile? It s important to have mechanisms to detect new technologies (especially considering its impact on the agility of an organisation). With this in mind, it s essential to: Implement a proactive mechanism that does not depend exclusively on visits or external meetings; for example, identifying which can be relevant technological areas in relation to the strategy and profile of the clients thus establishing an observation plan. Include the observation of the technologies used in other sectors, that could be used in the organization, in this plan. 22 The Agility Pulse

23 In general, how are decisions adopted in your organisation? Overall, decisions are adopted through 2 ways. Most organisations use a hierarchical structure to implement new actions, where the consultations have a more long-lasting effect and are more in-line with clients, staff or the use of tools and data Making decisions should be based on having the best possible information available, as a result, amplifying the viewpoint is interesting. As such, considering the opinion of clients and staff is important in order to calibrate, for example: Their interest in the proposed change How much the change would affect their level of satisfaction Possible improvements for users On the other hand, applying the use of data to make decisions is important. For that it doesn t just add value to know the data history but also to propose simulations and predictions based on clear hypotheses. 23 The Agility Pulse

24 What is the main data source for decision making in your organisation? La Most of the data comes from databases and applications specific to areas. Also, the manual calculation of data represents a minimum but significant percentage In an organization in which departments use their own data, it is necessary to develop uniform concepts for those potentially common indicators (eg, client, employee, product reference, etc.). Among others, the relevant aspects to develop are The Indicator definition, considering what to consider and what not. The data source. The segmentation data regularity. The person in charge of capturing the data and distributing it. 24 The Agility Pulse

25 To what extent do organisation staff have the power (delegation responsibilities) to make decisions about the development of their work? Practically half of the organizations do not have an empowerment model of empowerment for staff, this entailing the definition of powers and responsibilities in how decisions are made. The definition of functions and responsibilities is one of the minimum requirements for developing the activity of an organization. Although it is important, limiting oneself exclusively to these functions can slow down the pace of processes and decisions. Therefore, it is essential to empower staff in the organization so that, under a specific model, they can go beyond the established responsibilities. In other aspects, this model should contemplate: The reach of the groups of people to give empowerment to The reach of the empowerment The application and tracking formulas 25 The Agility Pulse

26 How is the budgeting of income and expenditure organised within your organisation? The two most widespread approaches to organisation budgeting are: taking the areas of the organigram as a reference and doing so through strategic objectives. Approximately 1 in 3 organizations associate budgets with key projects and processes. On the other hand, Around 1 in 10 organisations do not have a methodology for budget distribution All organisations should have a methodology for distributing and dividing expenditure. This could consist of the following mix: Area or department provisioning and, where applicable, on a business segment or territorial level. Provisioning specifically associated to strategy development and specific projects and processes that it is developing. 26 The Agility Pulse

27 In general, what are the reasons for changes in the structure of your organisation? Most of the changes are aligned with the Organization's strategy. On the other hand, in almost 1 in 4 organisations, the motivation of the changes is not clear or correspond to specific corrections. Any change, even more so if it is aligned with the strategy, must be accompanied by the corresponding communication actions to the stakeholders effected. It is important to establish a specific communication plan that schedules the different messages, through the different channels, over time. On the other hand, it is advisable to regularly measure the perceptions of Interest groups regarding the communication carried out considering, for example; its clarity, interest, or motivating effect 27 The Agility Pulse

28 How is the speed of decision-making measured in your organisation? Overall, organizations measure decision speed with a single medium. 1 in 2 organisations does not measure the speed of decision making. The rest do not use a predominant pattern or have a source defined. Measuring decision speed is key to be able to improve it. And it s important to establish indicators taking the following into consideration for example:. The expectations of the customer regarding speed and with that identifying the production times of the product or service. It is especially important to establish service level agreements (SLAs) between the different process managers so that speed is guaranteed throughout the cycle. The requirements contemplated in the Strategic Plan. The observation of response times of competitors. 28 The Agility Pulse

29 How are key processes measured in your organisation? The basic measurement of key processes is based on the measurement of performance indicators (eg: surveys). On the other hand, the use of performance indicators to prevent the results of these processes is also significant. Key process measurement must be based on two fundamental aspects: on the one hand, contemplating the measurement of strategic requirements (for example, if the strategy talks about improving the environmental impact of the activity, establishing indicators of environmental consumption) and, on the other hand, assessing the value requirements of the process's stakeholders. On the other hand, it is important that key processes assess their measurement from different perspectives, ie: workload indicators (or input), activity results (or output), dimensions (information on variables that affect the process) or efficiency (considering the individual or economic resource). 29 The Agility Pulse

30 In general, how are projects planned in your organisation? Organizations with projects that do not have a specific method, represent a significant percentage. They usually use 3 of the proposed management measures. On the other hand, the management aspects most used are the identification of personnel in charge and execution dates as well as budget allocation (in any case, even though being the highest percentages, the usages levels should be higher). Projects are one of the "engines of change" within an organization, given that they implement new approaches and, consequently, it is important to manage them in such a way that the probability of success is maximized. The management of these processes (especially if they are projects derived from strategic development) should contemplate: Programming activities as well as the identification of the most critical ones, defined by their impact on potential project delays. Identifying staff and client expectations of the project to avoid repeated work caused by not defining them first. Identifying risks associated with the project, its assessment and defining preventative actions or contingencies 30 The Agility Pulse

31 How frequently does your organisation develop carry out organisation or structural changes? Organizational or structural changes are mainly developed coinciding with the launch or update of the Strategic Plan. Also, approximately 1 in 5 organizations have not made a similar change for some time, a significant number. Once the Strategic Plan is defined, it is important to adapt the organisation and its structures to maximize the options for achieving planned actions. Every strategy implies a level of guesswork, and as such, the organizational change does not foresee 100% certainty of functioning better. Considering this, it s important to reduce uncertainty, for example, through: Observing how similar structures work in similar organisations. Comparing with a selection of staff from the organisation. Simulating results with predictive models. 31 The Agility Pulse

32 How frequently do you consider the Strategic Plan? Approximately 1 in 10 do not have a strategic plan. 2 3 years is the time period most used. Strategic Plans represent the response an organisation has to the external environment that they foresee, considering their strengths and weaknesses. At present, we are in an uncertain and changing environment. Therefore, defining strategic plans in an ample timescale may require continuous updates. Similarly, defining plans for less than a year s time may imply that changes do not reach consolidation. A possible strategic focus would be to establish a 5-6 year vision for achieving goals and also establish cycles twice a year where a series of strategic initiatives are integrated, in which their content is varied according to the situation of the organisation. 32 The Agility Pulse

33 Do you revise the Strategic Plan s validity during this cycle? (not just a compliance revision but a plan update)? The most common cycle is one on a yearly basis. However, a significant percentage of organizations either do not review the validity of the Strategic Plan during the cycle in which it develops or do not do so proactively Strategies must be reviewed in two ways: firstly, through the analysis of proposed goal compliance (both in results and actions) and, secondly, reviewing the validity of the proposed strategies. Although the strengths and weaknesses of the organization are usually stable over time, the external environment (and with it threats and opportunities) changes continuously. It is essential for the organization to ensure that the proposed strategies are updated and in this sense it should: Establish a update period (generally coinciding with the cycle s halfway mark). Develop a simple methodology that doesn t require exaggerated amounts of effort. Communicate the strategic updates to the Shareholders. 33 The Agility Pulse

34 To what degree do you position the following characteristics of your organisation? (more information in appendix 2) Most organizations are located in a central position judging by the characteristics presented. This can be seen as an improvable result since the most agile organizations are characterized, among other aspects, by the transverse nature of the organization chart, a view of the "end to end" processes or an adequate number of meetings Organisations should advance towards: A more transversal organigram, for example through key processes. The design and management of processes with an end to end view (From design right through to commercialisation and client use). Staff function definitions, with a base or working organisation. Developing actions to increase trust between staff members. Narrow down a meeting standard (eg: their format) and some rules of play. Establishing commitments to increase the achievement of agreements that have been adopted 34 The Agility Pulse

35 In what ways does the organisation s staff development make individuals more agile? Almost 1 in 3 organisations do not carry out specific actions to make their staff more agile. Those that do, base their development actions in training, although an evaluation of skills related to agility is not always associated People are one of the obvious, key assets for gaining agility of the organization. As such, their development in relation to agility should be considered as a basic competency, with a "must have" that all people in the organization should develop as a skill. Consequently, the following is recommended: Establish agility as a basic skill Develop the corresponding evaluation mechanic. Activate corresponding development actions, for example: through training or mentoring. Acknowledge staff and teams for agility in their actions. First and foremost, for example: recognition for their skill evaluation, while also for the internal clients perception and the achievement of service agreements (SLAs) 35 The Agility Pulse

36 Appendix 1 Segmented Scores

37 Segmented score by location Segmented score by size 37 The Agility Pulse

38 Segmented score by sector (1 of 2) Segmented score by sector (2 of 2) 38 The Agility Pulse

39 Appendix 2 Characteristics of the organisations 39 The Agility Pulse

40 How would you position your organisation against the following characteristics? 40 The Agility Pulse

41 How would you position your organisation against the following characteristics? 41 The Agility Pulse

42 How would you position your organisation against the following characteristics? 42 The Agility Pulse

43 Appendix 3 Declared times for determined actions The following is a series of questions associated with the time participating organisations spent in carrying out determined actions. Its presented as reference information so that every organisation can make their own comparisons.

44 Hiring of a new CEO Carrying out a survey with lost clients for the first time 44 The Agility Pulse

45 Approval of an unforeseen training budget amounting to 5% of the annual billing Change of supplier for a value chain support service (eg: Security) 45 The Agility Pulse

46 Producing the Strategic Plan for a three-year period Make changes to the price of one of the most successful products 46 The Agility Pulse

47 Appendix 4 Segmentation of participating organisations

48 Segmentation of participating organisations: 48 The Agility Pulse

49 Compartiendo y mejorando juntos