Leadership Agility for Organizational Agility

Why Agility Has Become a Global Imperative

Today’s business environment is dramatically different from that of the late twentieth century. We live in a time of tremendous opportunity and daunting challenges. The economy has globalized. Disruptive technologies abound. Income inequality is fostering political upheaval, and climate change is threatening the natural world upon which we depend.

VUCA (volatile, uncertain, complex, ambiguous) has become a widely shared acronym for the unprecedented nature of this new era. Leaders see that VUCA is not going away and that those companies who can adapt to it will win the future. In a word, to compete in this new world, companies—and their leaders—need to become significantly more ‘agile’.

My ongoing research and work with leaders and their organizations has led me to believe VUCA is generated by two powerful, underlying global trends: accelerating change and increasing interconnection. Not only have we entered an era of continuous rapid change, but change is accelerating. An equally important deep trend is increasing interconnection. With the advent of globalization and new communication technologies, everything is becoming increasingly interdependent. Customer and supplier relationships and business partnerships are more important than ever. Internally, companies are struggling to increase horizontal collaboration. To enjoy sustained success, companies need to develop a level of agility that matches an unprecedented level of change and complexity (Joiner, 2013/2014).

How Organizational Agility Creates Increased Value

The return from investing in organizational agility can be very significant. A body of disparate international studies—including survey research, executive interviews, case studies, and financial analyses—shows that, all other factors being equal, companies with greater agility consistently have higher business performance, measured in terms of various forms of value creation: customer satisfaction, market share, revenue growth, and profitability (Joiner, 2013/2014). In fact, given the broad range of factors that can affect these organizational outcomes, it is striking how significantly agility impacts value-creating performance.

According to a McKinsey study, executives around the world have for some time now believed that, in today’s turbulent environment, agility results in faster time to market, improved operating efficiency, more satisfied customers and employees, and higher revenues (Masia-Lizaso & Kiko, 2006). A global survey conducted by the UK journal, The Economist, found that 90 per cent of executives believe organizational agility is critical to business success (Economist Intelligence Unit, 2009). A recent global, cross-industry study of over 500 senior executives (PMI, Forbes Insight, 2017a) shows that this belief persists, with 92 per cent convinced that organizational agility is key to business performance. Moreover, a global study of over 1,000 business leaders in a range of industries found that these leaders believe that leadership agility is ‘by far the most important characteristic employees must have’ in today’s competitive business environment (OI Global Partners, 2018).

These views held by executives have been confirmed by ongoing research. An international study on organizational agility resulted in two findings especially worth noting. While environmental turbulence generally makes it more difficult to compete and grow profits, companies with higher levels of agility have a distinct competitive advantage that leads to higher profitability (American Management Association, 2006). These findings were subsequently reinforced by a more systematic academic study that came to the same conclusions (McCann, Selsky, & Lee, 2009). Additional studies, conducted more recently, have confirmed the high correlation between organizational agility and business performance (Alhadid, 2016; Bazigos, De Smet, & Gagnon, 2015; De Smet, Schaninger, & Smith, 2014; Langley, 2017).

What are the Key Levers for Developing Organizational Agility?

A useful framework for identifying the key components of organizational agility distinguishes between three key dimensions: strategic, operational, and leadership agility (Joiner, 2018). Strategic agility is the ability to continually adapt a company’s strategies to take into account newly emerging conditions and aspirations (Denning, 2018; Doz & Kosonen, 2007). Strategic agility balances stability and dynamism. Stability is established through commitment to a clear and compelling long-term vision and purpose. Dynamism is activated through rapid iterations of strategic thinking and execution. Companies employing strategic agility are moving away from cumbersome, long-iteration strategic planning exercises. Drawing on Agile principles, they treat goals and plans as working hypotheses to be tested and adjusted by examining results on a more frequent basis (Gadzinski, 2018; Leberecht, 2016).

Operational agility is the ability to quickly change organizational structures, processes, systems, and culture to align with changing strategic priorities (Sull, 2009). But it is equally about the effective management of interdependencies. Operational agility in its full sense takes place when several broad capacities are established both structurally and in the organizational culture. First, Agile management methods (Denning, 2010) ultimately need to be implemented within and between all functions, so work takes place in relatively short, rapid iterations, incorporating feedback from relevant stakeholders. Second, fast flexible IT systems also enhance speed and responsiveness. Third, optimal stakeholder management requires breaking down silos, fostering collaboration across functions, and developing superior external stakeholder relationships.

Leadership agility is the capacity of an organization’s leaders to foster strategic and operational agility (Joiner, 2018), to create an agile leadership culture (Joiner, 2009), and to adapt personally to changing, interdependent conditions and aspirations on a daily basis (Joiner & Josephs, 2007).

The Agility Gap

With all the benefits of increased agility, how are today’s organizations doing in developing this vital capacity? A PMI/Forbes Insight study (2017a) found that only 27 per cent of the executives polled believe their company is really agile. The earlier Economist survey (2009) produced a similar finding, but went farther in identifying what executives see as the key obstacles to organizational agility. If it is such a powerful determinant of business performance and value creation, why is there such a gap? As one would expect, executives identified obstacles in operational areas like structures, systems, technology, and business processes. But taken as a whole, the most frequently cited obstacles to increased agility cluster into two interconnected areas: leadership and organizational culture.

These informal executive assessments have been confirmed in recent years by the Agile community, especially as Agile migrates beyond software development to other management functions. Agilists are finding that leadership and culture change are essential ingredients for organizational agility. True organizational agility requires leaders who not only ‘do’ agile but also have the personal capacity to truly ‘be’ agile (Cardoza, 2015; De Smet, Lurie, & St. George, 2018; Hatch, 2016; Holt, 2016; Joiner, 2009, 2017; PMI/Forbes Insight study, 2017b).

What is Leadership Agility?

This brings us to a key question: What, exactly, is leadership agility? Extensive research on leaders who exhibit different levels of agility, captured in the Leadership Agility framework (Joiner & Josephs, 2007), has generated the following insights:

There is a core practice that lies at the heart of leadership agility.

The Core Practice of Leadership Agility

At the heart of leadership agility is a core practice, ‘reflective action’. This practice involves stepping back mentally from absorption in a leadership task, thereby gaining greater insight into the context surrounding one’s previously absorbed focus. A leader completes the reflective action process by bringing these key insights into action. Reflective action, in essence, is a cyclical process that moves from action to reflection and back to action.

Too often, when under stress, leaders get caught in continual ‘do loops’, meaning they keep moving from task to task with very little reflection. The value of reflection is that it expands awareness and allows leaders to use more of their intelligence. This expanded awareness is crucial for agility. Leaders cannot adapt to changes they cannot see. They cannot innovate, if they remain absorbed in what they already know how to do, without stepping back to consider new possibilities.

On the other hand, it is possible to get caught in reflective loops. Some leaders and some organizations overthink things, leading to bouts of ‘analysis paralysis’. This is clearly not agile either. Leaders become more agile when they develop the ability to move quickly back and forth between reflection and action. As one simple example, a leader may go into a meeting with the intention of leading a robust group discussion. Yet by stepping back mentally during the meeting, this leader might realize that they have been taking up a lot of the air time and some people are tuning out. With this insight, the leader can adjust and take action to shape the group dynamic to match their original intention.

All leaders employ some degree of reflective action in their work. But to become truly proficient and actually develop their agility, leaders need to adopt reflective action as a practice (Cashman, 2012; Torbert & Associates, 2004). To undertake this practice on a sustained basis, the leaders with whom we have worked have found it helpful to have a framework that guides them applying it to their everyday initiatives.

Four Types of Leadership Agility

The Leadership Agility framework has three dimensions. The first identifies four types of agility, each of which shows how reflective action can be applied in a key dimension of leadership. Leaders are most effective when they use all four types of agility together to accomplish their initiatives. The four types of agility can be arrayed graphically on a ‘Leadership Agility Compass’.

Context-setting agility (north). To practice this kind of agility, leaders step back from a mindset of taking for granted the larger strategic context of their initiative. This brings about a larger perspective that enables the leaders to scan their environment, anticipate important changes, decide what initiatives they need to take, scope these initiatives, and determine needed outcomes.

Three Key Leadership Contexts

The four types of agility add value through application in the real-life action contexts within which leaders are embedded. The second dimension of the Leadership Agility framework identifies three key contexts where leaders need to operate effectively: (1) ‘Pivotal’ conversations, that is, one-on-one discussions where the parties have differing views and priorities, yet important outcomes are at stake and concerted action is needed; (2) leading teams; and (3) leading organizational change.

To be successful, leaders need to shift, move back and forth, between the small-scale dyadic relationships, the somewhat larger system that a team represents, and leading change on an organizational scale. In these different contexts, the underlying principle of each type of agility remains the same, but additional skills are needed when moving to systems of larger scale. For example, a leader may be able to engage in creative problem-solving in one-on-one conversations, but not yet have the ability to effectively orchestrate organizational change initiatives that engage others in a truly creative problem-solving process.

Three Levels of Leadership Agility

Perhaps the most unique feature of the Leadership Agility model is its third dimension, the fact that it maps the stages or levels by which leaders can develop their agility. These levels, which are based upon research-based stages of adult development, are called Expert, Achiever, and Catalyst. At each new level, leaders develop new cognitive and emotional capacities that provide the foundation for a new set of qualitatively more agile behavioural skills. With each advance, leaders become more effective in working in complex, rapidly changing environments.

The Leadership Agility research finds that Expert leaders can be effective in those increasingly rare environments with relatively few interdependencies and a relatively low pace of change. Achievers are most effective in environments where these conditions are moderate, for example, as they were in the last half of the last century. Those leaders who are most effective and least likely to burn out in today’s environment of hyper change and complexity are those with the ability to operate at the Catalyst level. Unfortunately, only about 10 per cent of today’s leaders have developed Catalyst capacities to a significant extent (Joiner & Josephs, 2007). This lag in developing Catalyst leaders is a big part of the reason that the organizational agility of most companies is not where it needs to be.

Table 1 provides abbreviated descriptions of characteristic behaviours of leaders at the Expert, Achiever, and Catalyst agility levels. Note that as leaders move to new levels of agility, they retain the capacities and skills they developed at previous levels. Further, not all conditions require a Catalyst approach. Therefore, part of leadership agility is the ability to sense which level of agility is needed for particular situations and act accordingly.

The research I’ve conducted on ‘leadership culture’ (the part of the organizational culture that sets norms for desired leadership behaviour) has been in partnership with survey research firms in the US and Europe. This research shows that (a) like individual leaders, leadership cultures can be meaningful characterized as Expert, Achiever, and Catalyst, or a mix of these, and (b) those companies with leadership cultures in the Achiever/Catalyst range have greater organizational agility and produce better value-creating outcomes than companies whose leadership cultures fall within the Expert/Achiever range (Joiner, 2009, 2013/2014).

Leadership Agility in Action

I will conclude with a brief example that shows how one Fortune 200 company used the Leadership Agility model as a key global leadership development programme for developing senior leaders. The existing programme had an excellent track record, but needed to be upgraded to take into account the increased degree of environmental and organizational complexity its leaders were facing.

Realizing that their existing competency-based 360 captured what worked well for past performance, but did not provide an adequate picture of the leadership needed for a VUCA environment, the company chose the Leadership Agility model and the Leadership Agility 360 for reorganizing this programme because of its inclusion of the Catalyst level of agility, which went beyond the predominantly Achiever focus of the earlier programme.

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Table 1.

Expert, Achiever, and Catalyst Levels of Leadership Agility

Level of Agility	Assumptions About Leadership	Pivotal Conversations	Leading Teams	Leading Organizational Change
Expert (~55%)	Tactical, problem-solving orientation. Assumption: Leaders are respected and followed because of their expertise and authority	Either strongly assertive or very accommodative in dealing with differences. May flip from assertive to accommodative and the reverse. Tendency to avoid giving or requesting feedback	More a supervisor than a manager. Creates a group of individuals than a team. Works primarily one-on-one with direct reports. Too caught up in the details of own work to lead strategically	Organizational change initiatives are focussed primarily on incremental improvements inside unit boundaries with relatively little attention to stakeholders
Achiever (~35%)	Strategic, outcome orientation. Assumption: Leaders motivate others by making it challenging and satisfying to contribute to larger objectives	Primarily assertive or accommodative with some ability to compensate with the less preferred style. Will accept or even initiate feedback, if helpful in achieving desired outcomes	Operates like a full-fledged manager. Meetings to discuss important strategic or organizational issues may be orchestrated to maximize buy-in to own views	Organizational initiatives include analysis of external environment. Strategies to gain stakeholder buy-in range from persuasion to soliciting input
Catalyst (~10%)	Facilitative, capacity-building orientation. Assumption: Leadership means articulating an inspiring vision that includes developing organizational agility, then bringing people together to transform this vision into reality. Feels leadership is about empowering others and actively facilitating their development	Skilled in balancing assertion and receptivity as needed in specific situations. Identifies and questions underlying assumptions, including their own. Genuinely interested in learning from diverse viewpoints. Proactively seeks and utilizes feedback	Intent upon creating a highly participative team. Acts as both team leader and facilitator. Models and seeks an open exchange of viewpoints on challenging issues. Empowers direct reports. Uses team development initiatives as vehicles for leadership development	Organizational change initiatives often include development of a culture that promotes teamwork, participation, and empowerment. Proactive engagement with diverse stakeholders reflects a conviction that this input will increase the quality of decisions, not just gain buy-in

Source: The Authors.

With the help of a specially trained Leadership Agility consultant, they designed a nine-month action-learning programme that included workshops, 360 feedback, plus seven months of coaching and group projects, all primarily designed to help Achiever leaders develop Catalyst leadership capabilities. The results of the programme were carefully assessed using qualitative interviews and post-360s.

The Leadership Agility 360, based on the model outlined in this article, was consistently rated as an extremely valuable development tool. Compared with other 360s, participants said it generates more powerful leadership development goals, makes it easier to visualize future behaviours, and clarifies the path for growth into higher levels of leadership agility.

The company was so pleased with the new programme as a whole that it is now in its ninth year, running two cohorts each year. This is because repeated post-programme evaluations not only have included frequent overall evaluation comments, such as ‘the best I have ever experienced’, but also have resulted in a high percentage increase in agility levels and in new leadership behaviours needed for improved business performance.

Conclusions

Companies that have greater agility are more effective in dealing with rapid change and interdependent relationships, produce better business outcomes, and add greater value for their stakeholders. Yet, for the great majority of today’s companies, true organizational agility remains a rather elusive aspiration. The three most powerful levers that executives can pull to develop organizational agility are strategic agility, operational agility (which includes organizational culture as well as structures and systems), and leadership agility. For the higher levels of leadership agility needed in today’s environment to be realized, leaders need to develop a sustained, proactive practice of ‘reflective action’, applied especially in three leadership contexts: leading organizational change, leading teams, and pivotal conversations. To be successful in each of these contexts, leaders need to practice context-setting, stakeholder, creative, and self-leadership agility. To develop higher levels of agility, leaders need to develop through three stages: Expert, Achiever, and Catalyst. As with organizational agility, there is a significant gap in the level of agility needed and the way in which leaders currently operate. Only about 10 per cent of current managers have the ability to operate reliably as Catalyst leaders, the level that is most effective in a turbulent business environment. Research on levels of agility in the ‘leadership culture’ (that part of the culture that sets norms for desired leadership mindsets and behaviours) shows that companies with Achiever/Catalyst leadership cultures outperform those with Expert/Achiever cultures and create greater value for their stakeholders. Placing top priority on assessments, training, and coaching that focus on leadership agility as described here and that use an action learning approach (putting reflective action at the heart of the development process) are the best ways to close agility gaps in the leadership culture, contributing to the creation of truly agile companies.

Declaration of Conflicting Interests

The author declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author received no financial support for the research, authorship, and/or publication of this article.