Why human-centric metrics are essential to business agility

Profile picture for user Chris Pope By Chris Pope February 4, 2021
Summary:
What is the secret to a genuinely agile business? ServiceNow's Chris Pope shares five essential metrics for success in navigating choppy waters

Paper boat and large boat on the sea at dawn © S. Hermann & F. Richter - Pixabay
(© S. Hermann & F. Richter - Pixabay)

A year into a global pandemic, it's safe to say that many of us have never experienced such extensive disruption - whether it's at work, or in our personal lives.

But as difficult as this kind of disruption can be, it's certainly a driver to get our priorities straight.

Indeed, the past twelve months have clearly distinguished those businesses that are agile and proactive from those that simply aren't.

This latter group is finding it much harder to cope with market disruptions in the present and will struggle to seize new opportunities in the future, too.

Agile organisations prioritise human metrics

So what exactly is the secret to a proactive, agile business? How are some organisations thriving in this period of change, while others are just surviving?

Part of the answer is shifting to human-centric metrics - that is, looking beyond budgets and conventional measures of profitability.

While budgets are useful on a balance sheet, elsewhere, business leaders need a far broader spectrum of metrics against which to gauge their performance.

After all, quarterly targets are essential, but they're not as important as the long-term ability of an organisation to truly understand and empathise with its customers. While sales forecasts and export quotas are fundamental, they're not as fundamental to long-term operational agility as talent, skills and employee experience.

These ‘human' factors play a far more significant role in forming agile businesses - businesses that can demonstrate organisational agility in a cohesive chain that stretches from the warehouse right up to the boardroom. 

The key pillars of a human-centric business

To get a clearer idea of which factors matter most, we sponsored an IDC White Paper on the topic.

This paper identifies five core pillars critical to achieving organisational agility: leadership vision, structural agility, process agility, portfolio agility and technology architecture.

The paper also points to five key metrics that are key to agile companies: customer experience; talent acquisition and retention; customer loyalty; market share; and time to market.

Beyond these pillars and metrics, the study also reveals the characteristics senior leadership need to adopt to encourage this kind of agility in their businesses. It found that, instead of planning, directing and controlling the organisation, agile leadership is all about envisioning, architecting and coaching.

In addition, leaders themselves need to adopt a more cross-functional approach, with all C-Suite personas pulling in the same direction.

From the C-suite into workflows

How, then, do these factors translate into actual business operations?

A key operational characteristic of agile businesses is their willingness to look beyond traditional hierarchies and turn to more meritocratic systems and processes. (By ‘processes', we mean the sets of actions needed to complete a complex task, such as onboarding a new employee or providing break-and-fix support for an external customer.)

By dissolving archaic management silos, meritocratic businesses open the door to self-regulating teams which flourish in the absence of arbitrary restrictions. This leads to flexible and fluid business with self-forming diverse teams, knowledge sharing, collaboration, and a capability to rapidly scale up talent and skills to meet upcoming needs.

To get an overall sense of how many businesses meet this definition of ‘agility', IDC also developed a survey model designed to measure progress against five types of organisational agility; leadership, structural, process, portfolio and technology.

The results are food for thought. A survey of CEOs across Europe has revealed that only one in five (21%) businesses are in the top two tiers of agility readiness. Almost half (45%) of businesses are categorised as ‘in motion', while 34% sit in the lower tiers (named ‘static' or ‘disconnected').

So, what does the future hold?

From big ships to schooners and speedboats

It's a common idea – the image of big business as a huge oil tanker that's tough to steer, and even tougher to turn around.

To expand the metaphor a little, today's captains of industry aren't always the ship captain. After all, a leader is no longer someone with a title – a leader is someone who shows action, champions empowerment, and drives innovation. Our next generation of leaders will earn their stripes based on their ability to listen, learn and act, rather than their length of tenure.

The survey results above show that today's businesses are in the midst of a refit, so to speak. They're moving away from the oil tanker model, and a counterproductive insistence on perfection, to a more nimble model. We might see them instead as schooners: agile, prioritising action, and willing to fix what doesn't work on the go, rather than get it right first time.

The future promises an even bigger transformation. Our end goal should be to become speedboats – easily manoeuvrable entities capable of switching direction and changing tack rapidly, as well as performing a complete about-face where necessary.

The waters we find ourselves in at present are choppy, and they may be for some time yet. But the more agile our businesses can be, the more comfortably we can ride the waves.

The IDC Organizational Agility Benchmark Survey (October 2020) conducted with 873 large European organisations looked at the link between organisational agility and key performance indicators. Learn more about the IDC Organizational Agility Evolution Framework, and the five key foundational dimensions of agility in the white paper: Agility: The strategic imperative to survive and thrive in volatile times.