To survive and thrive today, many organizations are undertaking the fundamental shift from a traditional organizational model designed for the industrial economy to an agile model designed for today’s digital economy. This paradigm shift heralds a new form of organization that enables innovation, collaboration, and value creation at unprecedented speed, scale, and impact. Agile organizations can develop products five times faster, make decisions three times faster, and reallocate resources adroitly and quickly.
Making this shift can be exhilarating.
As one senior leader of a global healthcare company told McKinsey, “I’ve been in business for 25 years, and this is like nothing I’ve ever done. We’re needing to develop a whole new way of seeing the world, our business, and even ourselves. I’ve never been more excited about what we’ll be able to create—and terrified about my ability to do this.”
To form and lead an agile transformation successfully, leaders need a new approach. The mind-sets and skills they have carefully honed over years of experience are necessary but not sufficient to lead 21st-century organizations. By evolving their ability to lead, executives can transform their organizations into agile enterprises engineered for the digital economy.
While this paper is written for senior leaders (typically defined as the top three to four levels of leaders), much of it applies to leaders at every level across your organization. It has the following five parts, each of which concludes with a box of summary takeaways:
- Part 1 summarizes the emergence of agile organizations (for readers unfamiliar with this field) and links to McKinsey sister papers for more detail.
- Part 2 presents McKinsey’s latest thinking on the mind-sets and practices you need to lead an agile transformation successfully.
- Part 3 focuses on how you can bring a distinctively agile approach to the team, the core unit of agile organizations.
- Part 4 sets out the capabilities you need to enable agility throughout the organization.
- Part 5 discusses how your organization can build and embed these capabilities among leaders at every level, starting with senior leaders.