Is agility the latest management fad?
As a business school professor who deals with top management thinkers and senior executives day-in and day-out, all I hear about these days is “we need to be more agile,” “Agile is the new digital” and other various praises of agile management.
For those of us that have been in the world of business for a long time, once something gets this popular, it is healthy to be a little skeptical that the bubble might soon burst, and we’ll be on to the next new trend.
What makes something a fad?
A management fad is a collective belief, disseminated by trend setters, that a management technique will lead to progress. In the last 20 years, we have seen many fads ranging from business process engineering (BPR), balanced scorecards, knowledge management to ambidextrous organizations. While many of them have created buzz, they were often cyclical phenomena and reactions to external events. For example, in the 90s, business process engineering which focuses on rethinking and redesigning the way we work came about as a reaction to the economic crisis.
Agility seems to be THE hot topic in management right now, but it is also somewhat reactionary. New entrants and companies from emerging markets are arriving on the scene and challenging once dominant players. Tech sector companies are moving into all industries and increasing the speed at which traditional competitors need to respond.
Let’s look at a few statistics that illustrate these changes:
• A third of Fortune 500-companies in 1970 were gone by 183. And many of those that were in the top-10 in 2015 didn’t even exist ten years before that.
• The “topple rate” at which big companies lose their leadership positions has more than doubled, suggesting that “winners” have increasingly precarious positions.
Work priorities are changing. Companies are hiring a project-based, temporary work force. And digital challenges are diluting both the time and space of work engagements. Another important reason behind all the hype agility is getting is partly created and reinforced by those who stand to benefit the most from it — management consultants. Today, nearly every major consultancy firm has something to say about agility.
Does that mean we are all trapped into believing that the business world needs agile management practices while we should be less susceptible to the crazy ideas hatched by gurus and consultants?
If your organization is exposed to fast cycle times with a heavy level of digitalization and software development efforts across multiple functions, then agility may actually be core to your survival.
This requires adopting not only agile methods but organizing using agile structures and developing leaders to exhibited agile behaviors.
Bettina Büchel is Professor of Strategy and Organization at IMD. Copyright: IMD.