What fiduciary responsibility do Boards have to seriously evaluate and monitor corporate agility in 2021 and beyond?
“The pace of change has never been this fast, yet it will never be this slow again.”
These prophetic words were from Canadian Prime Minister Justin Trudeau’s 2018 speech at DAVOS, the annual host city in Switzerland for the World Economic Forum. He went on to say … “You are rightly anxious about how quickly our existing business models are being disrupted.”
I wonder what he would say now in 2021? The pace of change found warp speed in 2020 and has triggered new accelerators for change that will thrust us into an on-going continuum for rapid change. This will surely result in a progressive shakeout as the fragile and slow get passed by the faster and more agile organizations. The law of the jungle will certainly prevail as it is not a matter of being big or small as much as being fast not slow.
The key purpose of boards of directors is to help insure company prosperity while looking after the interests of shareholders. This is an incredibly challenging responsibility these days. In this era of rampant change, a new board standard practice should include examining the inherent capacity of their responsible organizations to be focused, fast and flexible to face the volatile, uncertain, complex and ambiguous (VUCA) world we have today … and tomorrow.
Boards should consider conducting an Organizational Agility Audit to profile current capabilities in the five critical drivers of organizational agility and the 75 associated organizational behaviors as assessed by the organization’s team members. The Agility Audit report highlights the obstacles and enablers that can help accelerate organizational speed, adaptability and resilience. This creates an on-going framework for evaluating and monitoring corporate progress in building more nimble, adaptable and agile enterprise.
The framework for on-going measurement and tracking taps into the five drivers in THE AGILE MODEL® – a globally recognized research based framework for organizational and leadership agility. The diagnostic assessment helps address critical questions such as these:
- What is our capacity to ANTICIPATE CHANGE proactively sensing and monitoring the forces of change that impact success?
- How well do we GENERATE CONFIDENCE through our capacity to actively connect, align and engage with all stakeholders?
- How well do we INITIATE ACTION routinely with a bias for action throughout fueled by empowered decision-making and skillful collaboration at all levels?
- What is our capacity to seriously LIBERATE THINKING with a real bias for innovation in a customer-centric way that truly invites idea diversity and widespread inclusion.
- How well do we EVALUATE RESULTS that really matter with real-time feedback loops using fact based measures of success broadly known and understood by all.
Importantly, this commitment to regularly monitoring agility keystones helps increase organizational health, fitness and engagement to compete better and faster in this VUCA world. Engaging the organization in the process facilitates becoming a learning organization as the survey instrument itself is an agility tutorial helping shape the mindset and skillset to elevate understanding of agility best practices.
I had a recent opportunity to speak with Finance Professor Ken Lehn from the University of Pittsburgh Katz Graduate School of Business about his 2019 Harvard Law School Forum article entitled Corporate Governance and Corporate Agility. Professor Lehn’s primary career focus has been the financial landscape in organizations and with boards yet he is a real champion for the broader responsibility boards must assume for stewardship of corporate agility and has been writing on the topic for several years.
Finally, McKinsey & Company published another article in their continual emphasis on the importance of corporate agility, The Boards Role During Crisis and Beyond. The stark reality is that we must prepare our organizations for a future of what we call LEVEL 5 VUCA, where one crisis or tsunami will be followed by another of a different sort. Fundamentally, it is about increasing our organizational CHANGE AGILITY for everyday adaptability and not just the capacity for linear change management mindset. I have included a link there to a keynote on change agility by my consulting partner Dr. Nick Horney for those who might want a deeper dive.
Agility has become a hot word in the corporate lexicon and rhetoric but many do not know how to define it, measure it or develop it. That is why our comprehensive suite of agility development tools and assessments help corporate boards and leaders start their journeys to creating agility as an advantage and not a failure.
We would love to continue the discussion and hear your success stories and challenges.