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Global Study: How Tech Companies Are Building Organizational Agility

Technology companies have many of the right pieces in place for organizational agility. How can they break through the most common barriers to achieving it?

 

This story, written by Jeremiah Barba, originally appeared in English on the Workday blog. We thought our local readers would also find it interesting, and it appears below in translation.

Tech industry leaders know that they must evolve to survive. Whether a startup working to become profitable or an established company striving to keep up with rapidly changing consumer trends, organizational agility isn’t a nice-to-have anymore, it’s becoming a requirement.

Our global survey of 998 executives, “Organizational Agility at Scale: The Key to Driving Digital Growth,” shows the majority recognize that organizational agility is key if they want to drive long-term digital growth. And, perhaps more tellingly, we found that there is a strong relationship between digital revenue growth and organizational agility.

We found that technology comes in fourth among the sectors predicting the highest digital revenue three years from now (the others, in order, are media, hospitality, and higher education). But, there is still some ground to make up in the strategic approach adopted for growth through digital.

We identified five key behaviors that are crucial to organizational agility, and then grouped survey respondents based on their level of adoption of these behaviors. “Leaders” (15% of respondents) achieved high performance across all five of the behaviors, while “aspirers” (30% of respondents) achieved high performance in four of them, and “laggards” (55%) achieved three or fewer of the behaviors.

Here are the five behaviors that are necessary for organizational agility:

  • Continuous planning. They plan in a continuous, real-time manner, which gives them the speed, agility, and dynamism they need to innovate successfully.
  • Fluid structures and processes. Leading organizations build fluid organizational structures and processes. Nearly half claim the ability to reallocate people quickly to where their skills are needed.
  • Building the future workforce. Leaders are much more likely than laggards to have plans to upskill the majority of their workforce and push specific initiatives to increase employee engagement.
  • Informed and empowered decision making. At 80% of organizations that rank as leaders, all employees have access to timely and relevant data and are empowered to make appropriate decisions.
  • Measurement and guidance. Leaders have made significant progress in developing tools and metrics to measure the performance of digitally driven innovations. This is giving them a “fail fast” mentality: 94% say they are able to steer away quickly from unsuccessful projects.

Our survey broke down organizational agility by industry. In the technology industry, 13% were identified as leaders, a rather surprising 58% were identified as laggards, and 29% were aspirers.

 

 

Here are a few key insights from survey respondents from technology companies:

  • Digital revenue streams are here to stay. Forty-four percent expect digital revenue to make up over 50% of their revenue three years from now.
  • Digital innovation takes agility. Seventy-seven percent said that their strategy for growth by digital innovation is always evolving.
  • Tech companies are ready to make the right moves. Sixty-seven percent shared that they’re ready to move people when new opportunities arise or they need their skills elsewhere. But, those that can’t reallocate people when and where needed (14%) say bureaucratic culture is their biggest roadblock.
  • Doors are open to upskilling. Seventy-three percent said that employees in their companies are encouraged to grow through learning new skills.
  • Frontline workers get the investment they deserve. Sixty-six percent said that customer-facing employees (the “frontline”) have the power to make decisions to make the customer experience better.
  • Access to digital tools. Seventy-three percent reported that they have the tools they need to measure performance of new service lines and digital products.

 

Challenges for Organizational Agility

Though many technology companies are putting the right pieces in place, it’s not always easy to work toward the five behaviors that make organizational agility, at scale, a reality.

The changing world of work is making it more and more important to plan in real-time. Technology companies want to move toward real-time, integrated planning, but their most common barriers to accomplishing this are inflexible legacy technologies, bureaucratic organizational cultures, and a lack of relevant employee skills.

They also strive to update business processes to respond to the changing needs of their business, but they struggle against similar barriers: bureaucracy, inflexible legacy technologies, and an unwillingness to move away from that legacy tech.

 

Measuring the Right Things with the Right Data

Two keys for technology companies to achieve true organizational agility are setting the right KPIs, and ensuring that the right data is accessible to relevant stakeholders.

Fifty-six percent of technology executives said their company’s KPIs don’t reflect the current digital era. That reinforces the idea that a key starting point in the journey to organizational agility is making sure you’re working toward and measuring the right things. When you start in the right place, you start in the right direction toward leading in the digital era.

The second key to success in organizational agility is ensuring the right people have access to the data they need. Tech executives shared that when it comes to data, only 46% have access to all the relevant data they need. Over half said their data is often siloed and outdated. And only 18% of employees had access to the data they need to respond to customers.

To make real progress toward the benefits of organizational agility, technology companies should focus on setting the right goals and ensuring the right stakeholders have access to the data they need.

Get an overview of “Organizational Agility at Scale: The Key to Driving Digital Growth" findings or download the full report.