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Agile firms develop management systems that allow them to move faster than competitors

John Lehmann/The Globe and Mail

Becoming Agile

By Christopher Worley, Véronique Zardet, Marc Bonnet and Amandine Savall

Jossey-Bass, 165 pages, $22

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Agility crept into the management discourse without most of us knowing what it meant. On the surface, of course, it seems quite simple and an attractive concept. But how do we achieve it? Indeed, what exactly are we pursuing?

Four European academics who studied the Brioche Pasquier Group, a French family-owned baked goods company, advise that agile organizations can make timely changes because they are better able to perceive short-term and long-term demands on them from the environment in which they operate.

The authors stress that agility is more than having a good innovation process, nimble leaders or flexibility in allocating resources. "Being agile means having all those things and above-average profitability more than 80 per cent of the time for a long period; it means you have implemented a variety of significant changes and not lost a beat," Christopher Worley, Véronique Zardet, Marc Bonnet and Amandine Savall write in Becoming Agile.

They note that three views of organizational change have dominated management thinking in recent years. The ecological or biological perspective sets out a life cycle for organizations similar to the seasons of life in which small, upstart companies grow to overtake large, successful, but now lagging, firms. Those aggressive companies in turn become bureaucratic and start to wither, to be overtaken in time by newer competitors. The overall business environment, which is increasingly turbulent, plays a role, as the younger companies adapt and the older companies don't.

The transformation perspective suggests that, while such turbulence is real, organizations only need to change occasionally to survive and thrive, making quick, sharp breaks from the past. Behind this model – and the ecological version – the authors say is the belief that technology, regulation, and social expectations change relatively slowly until at some point there is dramatic disruption in a relatively short period.

The third school of thought – the dynamic capabilities or learning perspective – sees the economic environment as continuously being disrupted and that firms therefore must, and can, change constantly. They need dynamic management practices and processes, learning from and adjusting to what is happening. Henk Volberda, a Dutch organizational theorist, has promoted the idea of embracing both stability and change, which is now called ambidexterity. Companies must unlearn old habits and be open to changes.

The authors note that most management theories encourage organizations to preserve, protect, and defend their existing strategic positions. That might involve raising switching costs – so it costs customers more to shift to a competitor – or protecting intellectual property, or fine-tuning the required skills the organization seeks in employees to strongly support existing operations.

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"Too many energy companies become experts at coal or nuclear power generation and are ill-prepared to make the shift to wind and solar. The cruel joke is that, in attempting to preserve the advantage, organizations can overcommit to institutionalization, becoming more inert and vulnerable to environmental shifts," they write.

Agile firms are different, but that means, the authors advise, they are engaged in "a dangerous game." They must drive above-average performance today by differentiating themselves from competitors and building the requisite strengths, but they can't overinvest in capabilities that won't serve them in the future.

Agile firms develop management systems that allow them to move faster than competitors, changing easily, while delivering effectiveness as it's defined today. They need flexible methods for allocating people, money, time and other resources to their most important uses. They need to balance the short and long-term.

The authors note that organizations can succumb to the TFW Virus, taken from the surnames of three noted influencers of modern management practices who promoted specialization and bureaucracy, Frederick Winslow Taylor, Henri Fayol, and Max Weber.

"Taylor, Fayol and Weber were trying to improve the functioning of organizations. At the same time, and perhaps unintentionally, much of their work resulted in dehumanized organizations, focusing on maintaining the status quo," the authors state.

Broche Pasquier Group, which traces its history back to 1936 and has spread in recent decades to other areas of Europe and the United States, embraces the "socioeconomic" approach to management, which challenges many of the primary assumptions of the TFW trio. It's aimed at pursuing the human potential of all employees. In particular, it assumes that all employees – regardless of their level in the hierarchy – are capable of innovation.

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It pays attention to hidden costs resulting from organizational dysfunction, putting a dollar figure on them before trying to eliminate or, at least, reduce them. In 1984, hidden costs per person per year at the company were calculated at $32,600 owing to absenteeism, work accidents, occupational illness, employee turnover, quality defects and productivity gaps such as idle time owing to bug-laden software and wasted effort because objectives were not clear.

This is a fascinating, important issue but the book is less than fascinating, as the academics provide a dreary, detailed account of the company's evolution, although the summary did help clarify the lessons on agility and the socioeconomic system.

POSTSCRIPT

Richard Peddie, former president of Maple Leaf Sports & Entertainment, shares 21 Leadership Lessons (Milner & Associates Inc., 220 pages, $23.95) drawn from his experience in business and sports.

X: The Experience When Business Meets Design (Wiley, 246 pages, $36) by digital analyst Brian Solis probes how to shape the customer experiences at the root of your brand.

Millennials Who Manage (Pearson Education, 159 pages, $43.99) by academics and consultants Chip Espinoza and Joel Schwarzbart offers a step-by-step guide for a new generation of leaders intended to help them overcome workplace perceptions.

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Harvey Schachter is a Kingston, Ont.-based writer specializing in management issues. He writes Monday Morning Manager and management book reviews for the print edition of Report on Business and an online work-life column Balance. E-mail Harvey Schachter

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