To build and lead an agile organization, it’s crucial that senior leaders develop new mind-sets and capabilities to transform themselves, their teams, and the organization.
For many organizations, surviving and thriving in today’s environment depends on making a fundamental transformation to become more agile. Those making the transition successfully are achieving substantive performance and health improvements: enhanced growth, profitability, customer satisfaction, and employee engagement.
More than any other factor, the key to a successful agile transformation is for leaders, particularly senior leaders, to develop substantially new mindsets and capabilities.
This article summarizes McKinsey’s guide, Leading agile transformation: The new capablities leaders need to build 21st-century organization, to readying leaders for agile transformations.
The agile story
Before we dive deep, it’s useful to take a broader view of agile, and particularly what sets agile organizations apart from traditional ones.
Characteristics of traditional and agile organizations
Simply put, the dominant traditional organization model evolved primarily for stability in a wellknown environment. It is based on the idea of an organization as a machine, with a static, siloed, structural hierarchy that operates through linear planning and control to execute one or very few business models.
Agile organizations, viewed as living systems, have evolved to thrive in an unpredictable, rapidly changing environment. These organizations are both stable and dynamic. They focus on customers, fluidly adapt to environmental changes, and are open, inclusive, and nonhierarchical; they evolve continually and embrace uncertainty and ambiguity. Such organizations, McKinsey believes, are far better equipped than traditional ones for the future
While there are many different forms of enterprise agility, they share some common trademarks. McKinsey has identified and enumerated these in a related article, “The five trademarks of agile organizations.”
Leadership in agile organizations
This new kind of agile organization requires a fundamentally different kind of leadership. Recent research confirms that leadership and how leadership shapes culture are the biggest barriers to—and the biggest enablers of—successful agile transformations.
Organizations must therefore begin by both extending and transcending the competencies that made their leaders successful in the past. To lead an agile transformation successfully, you need to develop three new sets of capabilities.
First, you must learn to transform yourself, by evolving new personal mind-sets and behaviors.
Second, you must learn how to transform your teams to work in new ways.
Third, it’s essential you learn how to transform your organization by building agility into the design and culture of the whole enterprise.
To fully transform yourself, several shifts will be necessary—and leaders will need to make these changes in a disciplined way.
Shifting from reactive to creative mind-sets
Changing our mind-set—or adjusting it to the new context—is no easy task, but developing this “inner agility” is essential in releasing our potential to lead an agile transformation. It is clear from the work of Robert Kegan and many others that leaders of agile organizations must, above all, make a profound personal shift in their mind-sets from reactive to creative.