The top managers are in their first meeting with the CEO. The machinery manufacturer, Precision Perfect Co. (PPC), was recently taken over by MNC American group. PPC was saddled with huge losses, and its family owners had neither the capital nor the managerial ability to turnaround the company. They sold out to the MNC group.
This group appointed an Indian CEO under a new board, andthe board members are all American managers of the MNC. The CEO returned from his two week orientation trip to the US plants of the new owners, with the mantra, ‘Business Agility’.
He talks to the top managers, via a slideshow. His first slide has a single word, ‘Agility’, written in large letters. His second slide has the word ‘Business’, and the third slide, ‘Cash’. He says, “Agility is the key to everything we do,” and clasping his hands, concludes, “Please take this forward,” while lowering in his high back chair. The PPC’s management team mostly has dyed-in-machinery kind of engineers, who watch the new CEO. Their thoughts could well be:
Agility — A cheetah
Business — Sales people with their briefcases
Cash — Their finance manager
They had heard their patriarchal former owner saying that they need to work faster. They didn’t mind it, except that they thought they were taking less than ideal time needed for every activity — designing, manufacturing, and testing. Every step must be done perfectly before the next step can start, was the unwritten code.
The CEO continues to gaze at them, and it makes them uncomfortable. They look hopefully to the factory manager. PPC was saddled with not just losses but also with long and uncertain delivery times and old debts which needed to be collected after finishing machinery installations. PPC also had a pile of obsolete component inventories. The factory manager remains silent.
The CEO gives up and is about to dismiss the meeting when a young man in his early 30s speaks up: “Sir, agility in everything we do, means a lot of things,” he says, in a tone that belies his disbelief in this ‘agility thing’. Everyone is alert now. The CEO motions the young man to proceed.
“To start with, agility means our delivery cycle time must go down; so also the time taken to finish site work and close the contracts. These two things will bring down customer complaints and free up our people,” he continues.
“I presume this is do-able?” the CEO asks.
“Yes sir. If the engineering department doesn’t wait for all details to release procurement lists, a part of delivery cycle time can be cut. Manufacturing too can start work on commonly used sub-assemblies. Intelligently planned parallel activities throughout the delivery cycle can save time. Custom-built part changes can cause waiting time, so only they should determine cycle time. Our customers will see the logic and won’t mind.”
The CEO looks at the heads of engineering and manufacturing. They nod.
The previous owners had recruited this engineer-MBA in their hope of improving things — it seems to be a wise decision. The engineer-MBA continues, “There is scope for technical innovation to bring down time needed for all activities, from engineering to installation,” he pauses, waiting to see what the CEO thought of this speech.
The CEO declares, “Well said young man. Will you back yourself in doing this?” Looking at others, he says, “Please think about it. We shall meet again”. Before leaving, he asks the young man to see him later in the day.
More than just speed
‘Business Agility’ surely needs speed, which can be achieved by simply pushing everyone to physical limits of work hours, and through rewards and punishments to match. But it is wiser and more enduring to let the speed increase as a result of well thought out changes in people, processes and everything else.
You need to perceive environmental and internal changes quickly; change processes quickly; bring in technology; you need people who can imagine these things and execute them; you need to use speed and quality (fitness for use) as the most important criteria for making decisions. For this, you need a flatter organisation and shorter workflows, with less change of hands.
You need people who can directly talk to their colleagues for improving things instead of going through their bosses. You need bosses who know when to step out of their peoples’ way. Your organisation needs to be in a perpetual cycle of conceiving, engineering, prototyping, testing and improving business processes. It can be quite an exciting and unnerving place to be in.
Can you do it?
Business agility isn’t meant for the weak-hearted or for those who are tradition-and-hierarchy bound.
The word agility also comes up in another context — agile software development. Agile development also proceeds with incomplete information, only to come back later, filling in the gaps. It calls for repeatedly configuring specifications and plans, discarding yesterday’s assumptions. It can be resource intensive.
Can you live with such self-generated, self-challenging intentional uncertainty? Can your people handle this? Can your systems cope? You need leaders at all levels to create business agility.
If you are like the young man in the story above, will you accept the challenge? Will you be ready sometime in future, to build such an organisation?