In an environment of rapid technological advances, economic turmoil and changing consumer behaviors, most companies recognize that to be successful, they have to be adaptable. And yet, fewer than half of companies say they are good at making changes, according to a new research report on leadership agility by the Institute for Corporate Productivity (i4cp).
The Organizational and Leadership Agility Survey asks business professionals to report on the stability of their business environment, the ability of their leaders to adapt to environmental changes and the extent to which executive leadership culture has a negative influence on organizational agility.
Over 75% of respondents reported that their business environment is changing or rapidly changing, which is no great surprise. However, only 44% of companies reported being adept at identifying and making needed incremental changes to a high or very high extent, while a scant 40% said their organizations are adept at recognizing and responding to strategic challenges in a timely manner. And less than a third (32%) said their organizations were proactive in anticipating and initiating the changes needed for sustained high performance beyond their immediate strategic challenges.
But these bleak numbers vary greatly when responding companies are looked at based on performance. Those companies that have consistently outperformed competitors in profitability, market share, revenue growth and customer satisfaction - dubbed high-performance companies by i4cp researchers - reported much greater agility than their lower-performance counterparts:
- Almost 60% of high-performance organizations are adept at identifying and making needed incremental changes, versus only 35% of lower performers.
- Nearly the same amount (58%) recognize and respond to strategic challenges in a timely manner, while only 30% of low performers do the same.
- A little under half (49%) of high-performance organizations are proactive in anticipating and initiating the changes needed for sustained high performance, compared to only 20% of low performers.
"In today's 'constant whitewater' environment, the ability to quickly move the raft is imperative," said Kevin Oakes, CEO of i4cp. "Most organizations understand the need for agility; what they don't understand is how to create a more agile culture. Our research and work with our member companies has uncovered some important findings about creating a corporate environment that doesn't just "manage" change well, but instead embraces change as a competitive advantage."
Comparing high- and low-performance organizations also revealed some gaps in practices and cultural definitions. When asked to what extent certain factors in the executive leadership culture pose challenges to increasing organizational agility, 60% of low performers reported that leadership sent mixed messages about the desirability of candid conversation and feedback, compared to only 34% of high performers.
Executives are also more likely to be overly focused on their own department or unit in low-performing companies, 55%compared to 36% of high performers. Of the respondents in low-performing companies, 44% said that agile leadership is not consistently modeled by the top executive group, whereas only 32% of high performers said the same.
Additional cultural and strategic gaps between high- and low-performance organizations are available exclusively to i4cp corporate members. The Organizational and Leadership Agility Survey was conducted by i4cp in February 2010. Download the leadership agility survey findings now.