What Does It Mean To Be Truly “Nimble” As A Business?
It’s funny, isn’t it? Why is it that startups with practically no money seem to be the companies that change the world while large companies with all the resources in the world stagger on as they always have, doing things the way they’ve always done them until they get displaced by someone else who does things better?
Part of the answer comes down to being nimble. Being nimble in business means being able to change and adapt to different circumstances. It means having the ability to adjust organizational structures, leadership practices and techniques to meet new market needs and fend off competition. But it’s also something that is devilishly hard to do, and most large organizations fail.
The reason for this has to do with incentives. Although it might be better for the firm as a whole to adjust the way it operates, there are always losers who will miss out if things change from the status quo. There’s an enormous incentive for people in the company to keep doing things the same way. Change is difficult and financially painful. And what most people in an organization care about isn’t the overall health of the company but their financial reward. People don’t want to admit that their roles are surplus to requirement so they’ll do everything they can to resist change until new companies pop up and displace them, forcing the business to fail.
How do you build an agile culture? It’s tricky, and there are no easy answers. Being nimble relies on a range of leadership and technological capabilities that enable a company to transition away from old business models while at the same time side-stepping problems with inertia.
Spinning Off New Enterprises
When organizations try to create change from within, they usually fail for the reasons discussed above. That’s why so many large firms create spinoffs which are independent and autonomous from the main company. One of the best examples of this is Google’s Calico – a firm dedicated to improving human using the parent’s data technologies.
Setting up a separate company – or new company arm – gets rid of many of the problems of trying to change the existing business. Nobody gets fired directly, and nobody has to change the way that they work. But over time, the original core of the company should naturally decline, and staff who lose their positions can then, in some cases, be reallocated to the new firm under the new structures.
The original operational core of the firm becomes less important over time while the new experimental section continues to grow in proportion to its market success. The new firm succeeds because it already uses innovate managerial and technological structures.
It might seem like cheating, but many companies, including Google, have proven that this strategy works. The key is to give the new company arm as much independence as possible, after having established the rules at the start.
Choosing Adaptive Technologies
Being nimble is also about being able to adjust your technology stack in response to changes in business needs. Orchestrate Technologies, a cloud computing firm, shows how this is achieved. Companies no longer have to lock themselves into fixed IT resources but can now scale with their requirements.
Scaling occurs along multiple dimensions. Not only can firms increase the number of users who access a given cloud-based program (for an additional fee), but they can also enhance other things, like capacity and bandwidth. Also, the cloud makes it possible to switch between software solutions quickly and cancel existing subscriptions when they’re no longer economically beneficial.
Creating A Better Culture
In some businesses, each person tries to create a mini-fiefdom which enables them to extract resources from the people around them, elevating themselves at the expense of colleagues, customers, and the final product. In others, people work together towards shared goals and are willing to take decisions which may not benefit them.
The latter is the hallmark of nimble company culture, but how do you create it?
It’s hard and, to be frank, it almost always comes down to the personalities of the leaders of the company. Leaders who lead by transformational example tend to engender fabulous levels of loyalty and motivation, creating teams that are prepared to be self-sacrificing in pursuit of higher goals. Finding these leaders is hard, but if you discover someone who can generate intrinsic motivation in your staff, hold onto them by any means possible.
Being nimble, therefore, is about having a combination of personalities and technologies that allow your firm to adapt to market change.
