Uncovering agility the right way
Swami Natarajan asks how larger companies with established processes can become more agile and responsive
Becoming a more agile business takes effort, and for large corporations this is often a difficult and daunting challenge. Meanwhile they must watch young, headline-hitting companies rise quickly while seeming to target trends spot-on every time and experience success after success. There can be a sense of ‘not waving, but drowning’ for businesses that feel bogged down by an innovation cycle underpinned by old, inflexible processes.
This is a problem. We all know that continuous innovation can be difficult for large, established companies where longstanding processes have become difficult to break down and streamline. And while the majority of organisations recognise the need for agility, many struggle to embed it in their operations.
Still, ‘difficult’ is different from ‘impossible’ and there are many points within a business where agile thinking can be used to simplify and speed up operations. Spotting and acting on opportunities for even the smallest improvement in business processes, from resource planning to product and service delivery, can add up to a major contribution to the bottom line.
The first steps to becoming more agile must be taken by decisions makers in the boardroom with the power and oversight to spearhead change. But only the first steps. The innovators that make a difference are frequently found outside the board, and increasingly in finance departments that have gained a more complete view of what’s happening across the enterprise.
Large companies may be tempted to look at what smaller, successful start-ups do to foster innovation but that approach is usually unrealistic on a large scale with the systems they have in place, and also unnecessary. Instead they should be looking to make their existing processes more agile. Few would disagree that larger businesses operate quite differently from start-ups, and it only makes sense that they approach agility in a way that suits their operating model. Forbes contributor Mike Maddock recently argued just this, likening companies to engines and saying that large organisations should focus on fine-tuning and incremental innovation rather than trying to invent new products, services or systems that risk being limited by their often antiquated processes.
Put another way, you can’t bolt an agile process or product onto a system that isn’t agile and expect either to thrive. Established players will be better served by applying some discrete pockets of agile thinking to their operations with a view to making the organisation more agile on the whole over time.
One business we work with had a widely diverse payment and purchasing base that was slowing down transactions, an issue that affected both the company and its customers. By taking a closer look at its payments processes to pinpoint where it could be cut down, the organisation drastically sped up its service and has since put millions back into the business.
There is potential for innovation management to add value for organisations across virtually every industry, from telecoms, to aviation, to retail, to the public sector. For example, the United Arab Emirates is starting an open data policy for citizens, and could benefit from encouraging people to share their own innovative ideas on how to improve government. In the aviation industry, where margins are increasingly tight and differentiation absolutely crucial, those airlines that operate on the innovation edge are best placed to continue modernising while keeping their costs in check.
Enterprise resource planning applications, particularly those run in the cloud, can also play a role in helping companies take a more measured approach to innovation. They allow companies to monitor and assess the impact of any proposed change in near real-time, allowing for the “fail fast” mentality that has become crucial to testing new services. In fact, a bank using our cloud ERP solutions has begun encouraging all its employees to propose ways it can innovate its business. Once these are assessed in the field and costed, the bank can quickly decide whether to commit to a full-scale implementation.
In the modern world every business needs to be agile. The market has no respect for size or status, and both large and small companies can go to the wall if they fail to understand and act on change, particularly as their customers become increasingly fickle.
Swami Natarajan is senior director, business development & strategy leader at Oracle.