Leading into the Unknown | Agile Leadership for Organisational Performance
Dr. Evangelo Damigos; PhD | Head of Digital Futures Research Desk
- Competitive Differentiation
- Sustainable Growth and Tech Trends
Publication | Update: Sep 2020
Rapidly changing business environments require strategically agile leaders, able to quickly adapt to changing situations and with a high degree of cultural sensitivity to make them equally effective across the global span of their business operations.
Savannah Group hosted an event with a panel of experts to get their thoughts and insight into what defines leadership agility and how to identify and develop it within teams and organisations. Here is a summary of the ideas discussed.
Leading into the unknown and navigating through ambiguity
Agile leadership is manifested, demonstrated and described in a number of different ways but they all have commonalities – fluidity, flexibility, collaboration, outcome focused and pace.
An agile leader is able to deal with the current situation, whilst also keeping the business focused on and navigating towards to the future.
What do we need to do to make our leaders comfortable with agile leadership?
According to Lisa Gerhardt, Savannah Group Partner, Human Resources Practice, agile leadership is being comfortable leading in an iterative way rather than an established manner and it is leading towards outcomes rather than through a process.
Agile leadership means accepting that we are in an uncertain place and we don’t know the answers, which is hard. Traditional organisational structures have hierarchical arrangements with command and control style leadership. In these structures the unknown can be an uncomfortable place leading to some leaders feeling at best exposed and at worst paralysed.
A fundamental part of agile leadership is accepting failure as long as failure is seen as learning to help move forward. As businesses become less rigid we are seeing a move away from organisation structure to organisition dynamics, job descriptions to job crafting, talent acquisition to talent ecosystems and culture fit to culture add.
Agile leadership is about working together to get to the best answers, not necessarily the right ones. Organisations need to ensure they are getting the right knowledge from the right people – and this means true collaboration. This does not mean just having someone from each department at the meeting without listening to or taking on board their views – that’s just representation. It’s working together, and taking an enterprise wide view regardless of role, with a diverse range of inputs and ideas.
How do you assess and develop Agile leadership?
The first step is acknowledging that no-one will have all the characteristics and abilities of agile leadership, and not everyone will be able to become an agile leader. Some characteristics are polarised. For example, some people are great at making the right strategic choices, intuiting strategic decisions while others are great at rapid, immediate execution and operational excellence.
It helps to look at the individual’s motivation and the parts of their personality that relate to some of the agile characteristics. This gives a scientific starting point leading to future development. Coach leaders and help them understand the theory and science of agile leadership but let them observe and learn. Assessing and understanding an individual’s agile abilities helps develop areas which are not as strong, so when the pressure is on they are better equipped to make better decisions and respond rapidly.
When recruiting or assessing, look for the behaviours that will block agility as they can be easier to see. For example, if a person is known for command and control, tight leadership and keeping things within their team, they’ll probably find it more difficult to manage and lead in an agile way. However, if a person is known for building great teams, celebrating what other members of their team have done and collaborating with other areas of the organisations, they are more likely to be more suited to an agile leadership style.
The panel created a list of attributes they felt reflected individuals most capable of agile leadership:
- Openminded – curious, open to change and advice, open to different and divergent points
- Acceptance of ambiguity
- Clarity of purpose
- Cognitive complexity
- Diversity – both in own thinking style and people around you
- Learning and growth mindset
- Low ego
- Risk appetite – seeing that opportunity inherently contains risk
- Focus on making progress and making decisions
- Building teams without structure (not building teams that you can control)
- Engage and collaborate (network rather than control)
Agile leadership in pressured environments
How can you maintain agile leadership when the pressure is on?
Many organisations are seeing an increase in speed of operating, creating a greater pull on people to operate outside their comfort zones.
Leaders need to be acutely aware of their own behaviour in a high-pressure situation as others in the organisation will be looking to them for support and guidance. That means being aware of your personal impact – what you say, think, do. Even what your face looks like as these body language cues have an impact on how others will perceive the situation. Control yourself as a leader. Balance your IQ and EQ during a crisis. Align your head, heart and guts. Get to the facts when you need to get to the facts and get to a gut feel when you need to get to a gut feel.
Think about your support system. How diverse is your team?
A more diverse team will be better suited to dealing with a variety of issues and challenges.
Understand the skills and sometimes hidden skills of your teams so you can deploy them quickly to best effect.
Know your limitations; where your abilities are and where they stop.
It’s critical however that underlying all of this there is a bias for action as ultimately decisions need to be made.
Dr. Alan Bourne, PhD in Organisational Psychology and Founder CEO of Sova
David Fairhurst, commented on the different groups of leaders they’ve seen under pressure:
- The first group are the ones doing it – they are leading
- The second group are observing the others doing it
- The third group are struggling to come to terms with what’s happening around them. This group are a watch-out as not only are they often ineffective in a crisis, but they can become blockers for those trying to find a way forward.
He also warns against inaction. In a pressurised situation some people will have a bias for inaction as a starting position but it’s generally better to do something and try to make it work than doing nothing at all.
Simon Linares, Board Member and former Group HRD of Direct Line’s advice is to focus on outcomes. If no one has the answers, some of the traditional blockers to agile working are removed. Pressure is usually seen as negative but can be a positive in terms of driving change. Particularly in speeding up changes and adoption of technology.
Good leaders give people permission to get on with it and good leaders give permission to not get it exactly right. And that’s what creates agile leadership. It’s an iterative way to keep learning and keep readjusting. Be comfortable being uncomfortable and remember that it’s okay that everyone hasn’t got the answers already.
Creating an Agile leadership culture within an organisation
Creating a culture of agile leadership is difficult. Individual assessment and development is arguably easier to implement than organisation wide culture shift and scaling, however there are areas businesses can work on to help them transition to have a more agile working practice.
How do we motivate the performance of people to get the best outcomes, growth and recognition that links to a more agile way of working?
Performance management has a strong correlation with how agile behaviour is developed. One suggestion was to reframe the approach from performance management to ‘performance motivation’ which sees the role of line managers and leaders as being there to motivate the performance not manage the performance. And from an HR perspective, instead of obsessing about defining performance levels the focus should be on supreme clarity of goals and then truly coaching and enabling success.
Give people choices
This could be encouraging a second career, a potential job swap or allowing work in different locations. The panellists note that large organisations often get fixated on ways of working and try to stick with what they think is right. For example, when asking employees of a contact centre whether they would prefer to work at home, the organisation assumed they knew the answer. The covid crisis forced the organisation to ask this question and have reflected and learnt from the varying responses to be more willing to think about what choices are available. If you engage people on choices, you will discover an awful lot of possibilities that could open you up to a future you didn’t think was even possible.
Banning the word ‘culture’?
Culture is a word open to interpretation. Talk about what you want to talk about to avoid ambiguity. For example, referring to culture to one person could mean diversity and inclusion and to someone else it could mean performance management. This variety of interpretation can stall the conversation.
Instead have open and honest conversations to identify causes of why areas of your business aren’t working. It’s often because the wellbeing culture isn’t right, or the performance management system isn’t right and once you can pinpoint those you can work back from there. Although not necessarily endorsing Agile Organisational design, one positive aspect of it is it forces frequent conversations. For example, in daily stand up meetings there is discussion about performance since yesterday providing timely updates and identifying immediate threats or opportunities.
Clarify decision rights
Companies put a lot of effort into organisational design, but not necessarily enough time into clarifying decision rights. This means nobody is exactly clear of the flow of information or who is actually the best person, with the best knowledge to make the decisions. David Fairhurst, Founder of OrgShakers and previously CHRO McDonald’s expands, “Decision making analysis is lacking in many organisations. You’ll often find decisions are not being taken by the right people with the right knowledge in the right way and decisions often get vacuumed upwards in organisations.”
Map the risk of decision-making risk across an organisation from low risk to high risk and make sure decision makers have access to the right information and people to effectively make those decisions. Diversity and an inclusive environment is key in decision making and if the right information is not getting through, you won’t make the best decisions. You need to gather the right people who may not have the biggest voice but have the facts and the knowledge.
As organisations have been forced to see the benefits of agile leadership in recent months the need for a change of gear is apparent. By looking at decision making across the organisation, assessing for and hiring diverse agile leaders, enabling open and honest conversations, organisations can empower the right employees to make decisions and in time create a culture of agile leadership across the organisation.
Although whether organisations will fully adopt an organisation-wide agile approach – across agile leadership, agile organisations and an agile culture is yet to be seen. A paradox exists about wanting to be more agile but continuing to run the business in the way it has been set up.
Anna Capitanio, Director of HR for BT’s Consumer Division summarises this well, “After trying to understand hard how to make it work, I think we are coming to the conclusion that we need to become somehow comfortable with this paradox, as we will never be just one or the other”. Which in itself is agile. So perhaps, the best immediate approach should be one of ‘And’ leadership.
Virtual Event: July 14th, 2020
Panel: Dr. Alan Bourne, PhD in Organisational Psychology and Founder CEO of Sova
David Fairhurst, Founder of OrgShakers and previously CHRO McDonald’s
Anna Capitanio, Director of HR for BT’s Consumer Division
Simon Linares, Board Member and former Group HRD of Direct Line
Host: Lisa Gerhardt, Savannah Group Partner, Human Resources Practice, has nearly 20 years executive search experience and leads the global HR practice. This breadth of knowledge enables Lisa to assist clients with complex global talent and resourcing challenges across all functions. With her depth of expertise in international HR appointments she brings significant added value to organisations as they plan their overall talent and resourcing strategies.
Objectives and Study Scope
This study has assimilated knowledge and insight from business and subject-matter experts, and from a broad spectrum of market initiatives. Building on this research, the objectives of this market research report is to provide actionable intelligence on opportunities alongside the market size of various segments, as well as fact-based information on key factors influencing the market- growth drivers, industry-specific challenges and other critical issues in terms of detailed analysis and impact.
The report in its entirety provides a comprehensive overview of the current global condition, as well as notable opportunities and challenges.
The analysis reflects market size, latest trends, growth drivers, threats, opportunities, as well as key market segments. The study addresses market dynamics in several geographic segments along with market analysis for the current market environment and future scenario over the forecast period.
The report also segments the market into various categories based on the product, end user, application, type, and region.
The report also studies various growth drivers and restraints impacting the market, plus a comprehensive market and vendor landscape in addition to a SWOT analysis of the key players. This analysis also examines the competitive landscape within each market. Market factors are assessed by examining barriers to entry and market opportunities. Strategies adopted by key players including recent developments, new product launches, merger and acquisitions, and other insightful updates are provided.
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We leverage extensive primary research, our contact database, knowledge of companies and industry relationships, patent and academic journal searches, and Institutes and University associate links to frame a strong visibility in the markets and technologies we cover.
We draw on available data sources and methods to profile developments. We use computerised data mining methods and analytical techniques, including cluster and regression modelling, to identify patterns from publicly available online information on enterprise web sites.
Historical, qualitative and quantitative information is obtained principally from confidential and proprietary sources, professional network, annual reports, investor relationship presentations, and expert interviews, about key factors, such as recent trends in industry performance and identify factors underlying those trends - drivers, restraints, opportunities, and challenges influencing the growth of the market, for both, the supply and demand sides.
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The future outlook “forecast” is based on a set of statistical methods such as regression analysis, industry specific drivers as well as analyst evaluations, as well as analysis of the trends that influence economic outcomes and business decision making.
The Global Economic Model is covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure. We aim update our market forecast to include the latest market developments and trends.
Review of independent forecasts for the main macroeconomic variables by the following organizations provide a holistic overview of the range of alternative opinions:
As a result, the reported forecasts derive from different forecasters and may not represent the view of any one forecaster over the whole of the forecast period. These projections provide an indication of what is, in our view most likely to happen, not what it will definitely happen.
Short- and medium-term forecasts are based on a “demand-side” forecasting framework, under the assumption that supply adjusts to meet demand either directly through changes in output or through the depletion of inventories.
Long-term projections rely on a supply-side framework, in which output is determined by the availability of labour and capital equipment and the growth in productivity.
Long-term growth prospects, are impacted by factors including the workforce capabilities, the openness of the economy to trade, the legal framework, fiscal policy, the degree of government regulation.
Direct contribution to GDP
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Forecasts of GDP growth: GDP = CN+IN+GS+NEX
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All relevant markets are quantified utilizing revenue figures for the forecast period. The Compound Annual Growth Rate (CAGR) within each segment is used to measure growth and to extrapolate data when figures are not publicly available.
Our market segments reflect major categories and subcategories of the global market, followed by an analysis of statistical data covering national spending and international trade relations and patterns. Market values reflect revenues paid by the final customer / end user to vendors and service providers either directly or through distribution channels, excluding VAT. Local currencies are converted to USD using the yearly average exchange rates of local currencies to the USD for the respective year as provided by the IMF World Economic Outlook Database.
Industry Life Cycle Market Phase
Market phase is determined using factors in the Industry Life Cycle model. The adapted market phase definitions are as follows:
The Global Economic Model
The Global Economic Model brings together macroeconomic and sectoral forecasts for quantifying the key relationships.
The model is a hybrid statistical model that uses macroeconomic variables and inter-industry linkages to forecast sectoral output. The model is used to forecast not just output, but prices, wages, employment and investment. The principal variables driving the industry model are the components of final demand, which directly or indirectly determine the demand facing each industry. However, other macroeconomic assumptions — in particular exchange rates, as well as world commodity prices — also enter into the equation, as well as other industry specific factors that have been or are expected to impact.
Forecasts of GDP growth per capita based on these factors can then be combined with demographic projections to give forecasts for overall GDP growth.
Wherever possible, publicly available data from ofﬁcial sources are used for the latest available year. Qualitative indicators are normalised (on the basis of: Normalised x = (x - Min(x)) / (Max(x) - Min(x)) where Min(x) and Max(x) are, the lowest and highest values for any given indicator respectively) and then aggregated across categories to enable an overall comparison. The normalised value is then transformed into a positive number on a scale of 0 to 100. The weighting assigned to each indicator can be changed to reﬂect different assumptions about their relative importance.
The principal explanatory variable in each industry’s output equation is the Total Demand variable, encompassing exogenous macroeconomic assumptions, consumer spending and investment, and intermediate demand for goods and services by sectors of the economy for use as inputs in the production of their own goods and services.
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Demand elasticities can be influenced by several factors. Each of these factors, along with the specific characteristics of the product, will interact to determine its overall responsiveness of demand to changes in prices and incomes.
The individual characteristics of a good or service will have an impact, but there are also a number of general factors that will typically affect the sensitivity of demand, such as the availability of substitutes, whereby the elasticity is typically higher the greater the number of available substitutes, as consumers can easily switch between different products.
The degree of necessity. Luxury products and habit forming ones, typically have a higher elasticity.
Proportion of the budget consumed by the item. Products that consume a large portion of the consumer’s budget tend to have greater elasticity.
Elasticities tend to be greater over the long run because consumers have more time to adjust their behaviour.
Finally, if the product or service is an input into a final product then the price elasticity will depend on the price elasticity of the final product, its cost share in the production costs, and the availability of substitutes for that good or service.
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