Agile: The One Fundamental Thing Many Organisations Are Missing
Restructuring 100 years of management culture? It’s all in a day’s work for Sam Bunting, Global Head of Agile at PA Consulting
In this age of unprecedented technological change, businesses must adapt or risk becoming obsolete. Whilst this may seem like a daunting prospect, there are positive sides to disruption. The pursuit of innovation can make businesses more profitable, more productive, and lead to much happier employees. Following his recent talk at Disruption Summit Europe, we spoke to Sam Bunting, Global Head of Agile at PA Consulting, to find out how he is using agile business management to turn disruption from a threat into an opportunity.
A journey back in time
Sam Bunting first began exploring the principles of agile in 2008, when the term was still relatively new in the business world. Although popular with the tech startups emerging from California, agile was yet to register in more traditional corporations. When Bunting began his foray into agile, however, he found that it harnessed significant productivity increases. How? By solving a problem that has endured since the early 20th century.
“The problem we are trying to solve goes back to Taylorism [from the economist Frederick Taylor] and Fordism [from the car manufacturer Henry Ford],” says Bunting. “These ideas are the foundations of the way we run companies today. These guys should be praised for what they did, which was to create a system of work for large organisations for the first time. They created fantastic productivity gains that are really the foundations of the western world and our economic society.”
Unfortunately, whilst the principles of Taylorism and Fordism led to impressive gains in productivity, they simultaneously caused the disenfranchisement of individual workers.
“The system was based on considering businesses as a machine,” notes Bunting. “If you have all the cogs in the machine whirring around, interfacing correctly and working in the right way, then all you need to do is oversee the machine from the top. The people in the machine just do their specific tasks, which they become experts in, and this generates huge productivity gains. The problem was – even at that time – that workers began to feel disconnected from the finished goods. Where they used to make a car, they now only made a tiny piece of the car.”
Under this new structure, workers no longer felt connected with their product or with their customer in the same way. The economic manifesto of specialisation in mass production was also seen to generate inequality of wealth creation across management and workers, and a worrying risk of the concentration of power at the top of an organisation.
Agile solves problems
Why is any of this relevant today? Well, these historical management techniques continue to underpin the way businesses function – even in our current digital age. For Bunting, the overall result of this is a lack of connection between individuals in a corporation, who work in specialist departments and within highly defined job roles. Perhaps most importantly, with specialisation there also comes the complete dissociation between the employee and the customer.
“If I walk up to most people in business and ask them ‘who is your customer?’ they will say, ‘no – I work in audit’ or business analysis, or security,” he says. “The reality is that most people in business can’t tell me. That’s a problem.”
“We still need a system of work – that’s the revolution that Taylor came up with – but we need a new system. This is agile. It’s not agile as in software development or technology, this is agile across the entire organisation. It is taking the kind of elements that have made organisations such as Google world-beaters, and embedding them into business end to end. There are five elements to this.”
The five elements of organisational agility
1) Total customer centricity
“The first thing that an agile organisation seeks is total customer centricity,” says Bunting. “In the organisation, every single person – instead of being organised by what they do – is organised by the customer they are serving. What this boils down to is that when you are asked the question, ‘what do you do?’ instead of saying something like ‘I’m a business analyst at a bank,’ you would say ‘I serve small business customers at a bank.’”
2) Shorter time to value
“Most organisations unfortunately have lost track of the cost to them of delaying getting products out. The result of a complete lack of focus on time is that organisations become very slow. What’s more, if you are delivering to customers but you are organised in your Taylorist silos, you have to go across every single one of those silos to create one tiny thing for the customer. So if we reorganise by customer, and focus ruthlessly on time, we can get products and services out faster to those customers,” Bunting notes.
3) A start-up culture
“Having a start-up culture means keeping that entrepreneurial spirit. Most people are entrepreneurial, they are creative, and they like solving problems. The problem with today’s system again is that there is very little ability for them to innovate, because their job role involves doing a task and giving the result back. It is difficult to have an entrepreneurial culture in a big organisation, but it just needs some focus and work. One of the ways we do that is instead of giving people tasks, we give them outcomes. This is much more motivational.”
4) Greater responsiveness to change
“Most of today’s business processes sadly are still run at a glacial pace. A classic example is business planning and budgeting. A strategy is often out of date a few months after being written because you can’t predict what’s going to happen in the future. There’s no FD or CFO, no finance person or accountant, who would ever defend a point of view that you know what you’re going to be doing in December next year. And yet,” Bunting adds, “when we do financial planning up to 18 months in advance, that is how we run our businesses. That builds rigidity in; what you instead need is a continuous approach to budgeting and strategy, which centres around quarterly milestones.”
5) The simplified organisation
“It turns out if you empower people and give them outcomes and objectives instead of tasks – you need a lot less management. So you can completely de-layer organisations. Some of the world’s biggest organisations which had 15 layers have gone down to 7 or 8 with no difficulty. If people have better situational awareness they can manage themselves much better. This is the self-organising element of this approach.”
The one fundamental thing many organisations are missing
For Bunting, one of the most important aspects of agile is the way it reformulates organisations, putting people – customers and workers – back at the heart of business. This was the crux of his talk at Disruption Summit Europe.
“At the Summit,” he says, “we articulated a future where profit and people are not opposed to each other. That is the major issue that Taylorism and Fordism have created, as big organisations can generate great profits at the expense of their people. What we are advocating is more profitable companies, more productive companies, but happier people – who are actually valued equally across the organisation.”
This is the innovation that Bunting has already implemented with his team and his clients at PA, and which is beginning to spread throughout the corporate sphere.
“The message for businesses is that people are part of your success story now, they don’t exist in spite of it. That’s what motivates me. We spend 60 per cent of our time at work, imagine if we enjoyed it three times more. Think of the impact on people’s wellbeing, family life and ultimately society. The reason I come to work is that I make people enjoy their work more. This is extraordinarily motivating.”
You can watch Sam Bunting’s talk, The One Fundamental Thing Many Organisations Are Missing, from Disruption Summit Europe 2018 here –
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