Why the future belongs to gymnastic enterprises

Despite being a staple in the past, long-term, rigid plans no longer work well in the business environment that is increasingly volatile, uncertain, complex and ambiguous. To adapt, survive and thrive through disruptions, organisations will instead need to focus on becoming agile.

Recognising this, organisations in Asia are prioritising agility and transformation as they look to chart a sustainable recovery from the pandemic. They reported a 15% growth in business agility last year, up from 7% in 2019, according to the 2020 Business Agility report by professional services firm Accenture.

“There is a greater need than ever for enterprises to increase their business agility at speed and scale — and business leaders are racing to do it,” says Valentin de Miguel, Accenture’s senior managing director, and strategy and consulting lead for growth markets.

He continues: “They commonly ask ‘how do we go faster and manage transformation in multiple parts of the organisation at the same time?’ These are important questions in a post-Covid era, where compressed transformation is the new normal.”

Gymnastic enterprises: The truly agile organisations

Many companies today are most likely using agile methodologies across their product and application development teams to build, test, release and maintain new applications more frequently and efficiently.

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However, agile practices need to be adopted beyond those teams and across the entire enterprise for an organisation to future-proof its ability to rapidly deliver innovations that address disruptions. Organisations that have successfully done so are called “gymnastic enterprises” by the not-for-profit professional membership association Project Management Institute (PMI).

Gymnastic enterprises can flex and pivot on-demand as they focus on outcomes rather than processes and work flexibly, says Ben Breen, PMI’s managing director for Asia Pacific and head of global construction. Despite the pandemic, 72% of gymnastic enterprises in Asia Pacific met their business goals with their most recent projects as they approached challenges with new creativity and freedom, according to PMI’s Pulse of Profession 2021 report.

What should organisations do to become gymnastic enterprises? It begins with transforming their organisational structure and culture.

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Accenture’s de Miguel shares that legacy leadership styles, conventional and rigid mindsets and organisational silos rank among some of the greatest hindrances to business agility today. He, therefore, advises “businesses to adopt an intentional approach to developing an agile culture — one that is founded on a growth mindset, market innovation and experimentation, and the continuous delivery of value”.

To provide clarity on the changes needed, PMI’s report revealed two key differences between traditional and gymnastic enterprises.

Firstly, traditional enterprises operate on rigid structures and ways of working. They either favour extensively planned and methodical approaches, or are strongly skewed towards iterative adaptive approaches. In contrast, gymnastic enterprises can apply any of these ways of working depending on the situation.

Secondly, employees in traditional enterprises tend to be generalists or focus on specialised skills. Gymnastic enterprises, on the other hand, encourage their staff at all levels to build both breadth and depth so that they think and act like entrepreneurs. This means having deep expertise in their roles as well as an understanding of the macro business objectives and implications. They also need to comprehend how other roles relate to their own and how all of them ladder up to strategic goals.

[For agile to be ubiquitous, organisations need to] align the structural, cultural and process requirements for agile teams across the enterprise to work

Professor Aarti Ramaswami, deputy dean of ESSEC Business School, Asia Pacific

She adds: "This includes coordinating with the human resources department to adjust work dependencies, chains of command, and accountability structures. They also need to nurture a workplace environment where employees feel safe to speak up, take risks, fail, and be uncertain.”

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The need for disciplined agile

To be outcome-driven, gymnastic enterprises place a heavy focus on empowering their people to become changemakers. PMI defines changemakers as employees — regardless of their role — who feel personally inspired and equipped to drive change and turn ideas into reality.

Adopting disciplined agile, notes PMI’s Breen, is one way that organisations can effectively transform employees into changemakers. Since every team is different and faces a unique situation, there is no one agile methodology that is effective for all projects. Every methodology has its trade-offs.

Teams, therefore, need to be able to own their process and be enabled to experiment to discover what works in practice for them, given the situation that they face. They can do so by embracing disciplined agile, which is a process decision toolkit that allows them to easily choose the agile methodology and way of work that is most appropriate for their situation.

Disciplined agile provides guidance and the right tools for teams to make the best decisions. Any team can use disciplined agile to identify the intents and activities they should address so they can make context-specific choices [instead of having to] follow a certain agile framework that is ineffective or irrelevant to the situation.

Ben Breen, PMI’s managing director for Asia Pacific and head of global construction

The disciplined agile toolkit.

Democratising decision-making to be more adaptable

Empowering employees at all levels to make decisions is also necessary for gymnastic enterprises to adapt to changes flexibly and quickly.

Businesses benefit from going flat and fast — shifting away from conventional hierarchical structures to strong, networked teams that can act with speed and agility to meet corporate goals while optimising for local performance.

Valentin de Miguel, senior managing director, and strategy and consulting lead for growth markets, Accenture

"By delegating decision-making to teams at the edge, organisations empower employees with the agency and accountability to make the decisions they are best equipped and placed to make,” he adds.

He gave the example of Chinese financial services company Ping An Insurance, which spent the last decade transforming its business into an ecosystem of ventures. It also flattened its organisational structure to enable swift decision-making in its ventures, increased the number of employees working closest to their customers, and improved the communication channels between senior executives and workers at the frontline.

“This ‘flat/edge’ structure enabled employees at the frontline — who were most familiar with local laws and conditions — to make and implement decisions in near real-time during the pandemic. As such, the company could stay agile and resilient even in the face of the crisis, improving their profitability well beyond expectations,” he says.

The case for connected planning

To further improve business agility, organisations should consider replacing annual or traditional planning with “connected planning”. According to planning software company Anaplan, connected planning unifies data, people and plans on a single platform to eliminate inefficiencies among financial, corporate and operational planning, to ultimately accelerate business performance.

Karen Clarke, Anaplan’s managing director for Asia Pacific, shares that annual planning is resource-intensive and takes an average of two to five months as employees tend to rely on disparate legacy software systems or spreadsheets to develop those plans. Moreover, such plans are typically tied to a finite calendar, significantly limiting the organisation’s ability to plan dynamically, keep pace, and thrive in a world marked by constant volatility and disruption.

With connected planning, she notes, organisations can create a shareable, real-time model of how the business works. This allows teams to focus primarily on performance analysis and uncovering insights based on the consolidated data, instead of spending time collecting and validating data, maintaining spreadsheets, and developing reports.

Connected planning also enables teams to build and test scenarios to illuminate blind spots and hidden opportunities in real-time. Leveraging artificial intelligence coupled with machine learning, these scenarios and consolidated data provide organisations with a single source of truth that eliminates confusion and siloes when making decisions.

[In short,] connected planning decentralises access to information and empowers more people to make decisions. It also facilitates an agile forecasting approach by sorting siloed information into easily adaptable and real-time insights, allowing data transparency and visibility to forecast dynamically for better business decisions.

Karen Clarke, managing director for Asia Pacific, Anaplan

Infographic: Anaplan

Making connected planning work

Many organisations are recognising that centralised business governance will soon be outdated. Seventy-one per cent of the global executives Accenture surveyed said they have already decided or are planning to decentralise decision-making functions of their business. How can organisations achieve that and successfully adopt connected planning?

“While connected planning is made up of many components, the different functions within the organisation must align on a common end goal. All department-level data must be consolidated into a single place and platform to enhance collaboration, transparency, and data accuracy,” explains Clarke.

As such, she recommends “replacing spreadsheets with cloud-based, collaborative, connected planning platforms with robust memory and the ability to execute real-time modelling with massive volumes of live data”. By doing so, planners can act on the same real-time data and leverage technology to run predictive algorithms, machine learning, and real-time simulations. The platforms should also enable manual processes to be automated to free up planners’ valuable time and reduce the risk of mistakes.

She adds: “A shared planning platform can connect all functions across the businesses, allowing them to forecast a wide range of business scenarios and strategies in real-time and pivot with agility as conditions change. In essence, planning should connect business functions and their data as well as connect the organisation and its plans to reality and the changes in the market.”

Vena Energy, an independent power producer of renewable energy in Asia, is one organisation that has benefitted from connected planning. The company initially built its core financial planning and analysis and consolidations models on Anaplan’s connected planning platform. It later extended its use of the platform beyond finance to include a human resources model for headcount and compensation forecasting, as well as tracking models for sustainability and health and safety data. This enabled it to track key metrics and performance indicators at a glance, which facilitates the deployment of vital resources where they are needed the most.

Additionally, Vena Energy created a project planning model for its capital projects that fuel its business. For each project, the company tracks progress over time against the budget in Anaplan. Planners know when a project will begin contributing to revenue and understand the financial impacts when a project gets behind schedule or approaches budget limits.

The project planning model also tracks project insurance premiums and claims — critical levers for risk mitigation when projects cost tens of millions of dollars — and allocates human resources using a heat map to balance resources and utilities. Consequently, Vena Energy gained a complete and accurate picture of all its capital projects, regardless of where they are in development.

Adapt to survive and thrive

The need to be agile to pivot and adapt to changes quickly has never been greater. However, Ramaswami warns that agility “must not be considered in isolation or as a trendy fad to be force-fitted into an organisation”. “Businesses need to get a good pulse of their needs and anchor agility to their organisational values”, she says.

This calls for businesses to significantly transform their organisational structure, culture, and the way they work. “[Such transformations might be met with] resistance so it is crucial for organisations to identify catalysts for change who can go between various stakeholders, and have the organisational stamina – in terms of resources, patience, time, and people – to deal with the resistance,” she adds.

While scaling agility across the organisation may not be an easy task, it is worth the effort. Becoming truly agile (or a gymnastic enterprise) is no longer just desirable, but essential for organisations in Asia Pacific to remain competitive in a rapidly changing, turbulent, and ambiguous world. As the saying goes: “It is not the strongest or the most intelligent who will survive, but those who can best manage change”.

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