IF AGILITY IS KING, CULTURE IS KONG
When it comes to agility, the need to deliver new products/services in response to changing customer demand means businesses have to adapt quickly on their feet.
But becoming fully agile is not just about tools, methods and process. In our opinion, the ability of a business to be agile is directly linked to its coherence.
What do we mean by coherence?
Coherence is alignment. A coherent business not only knows itself well, but its ‘why’, its purpose, is clearly aligned from end to end. It has a strong understanding of why it exists, and its management, systems and employees all work towards the same goal.
Many businesses struggle to create and maintain this kind of alignment. Too much attention is placed on employing agile tools and methods rather than on culture – and culture is a large component of coherence because it encompasses the board, its people and its purpose as an organisation.
Despite their efforts, companies end up with a fundamental lack of coherence. Our judgment is that this is due to a misalignment between the board’s directives and the needs of its customers.
Historically, the way businesses have been managed is that return on shareholder value is the primary objective. If increasing share price is the leading motivation, then those interests compromise an organisation’s ability to focus on its customer. This neglect of culture and misalignment of interests then affects the capacity to successfully deliver new products/services.
The good news is this mindset is slowly changing. A recent gathering of American CEOs brought forth a new argument which states that shareholder return should no longer be the single measure of a company’s success. Instead, what should be upheld is an ongoing commitment to stakeholders.
While this will enrage some and enliven others, what it suggests is a sea change for the corporate mindset such that customers, vendors and employees are given much greater importance.
Amazon boarded this ship early on and managed to achieve a coherent and agile business model by aligning their aim to deliver obsessive customer service across all levels of the organisation. As far back as 1999, Jeff Bezos argued that “in the long run there is never any misalignment between customer interests and shareholder interests”. He adds that shareholders should invest in those companies obsessing over customers, upholding the view that the alignment of a business’s activities should be on the demands of the customer.
To sum up, an organisation’s ability to be agile is directly linked to its coherence. And the road to coherence involves a redirection of efforts towards culture, towards aligning the purpose of the business with the needs of its customers.
Exactly how the landscape will change as these major shifts take shape is unclear. But a collective move towards this alignment could not only mark a fundamental shift in customer focus, but it also has wider consequences for social inclusion, sustainability and environmental impact as companies become more conscious of how these issues can impact on their operations and profitability.
While this process may not be easy, it is necessary. Without coherence, an organisation will lack focus. It will struggle to perform well, and as a result, will fail to retain talent and customers. More than ever there is a need for obsessive customer service to be at the centre-point of a business and aligning it with the aims of the board are essential for survival.