Tuesday, January 05, 2010

McKinsey on Agility

A recent McKinsey quarterly has a piece on organizational Agility, “Competing through organizational agility” by Donald Sull. It s a reminder that “agile” means something outside of the software world.

That said, the piece is a little disappointing. The piece doesn’t say anything particularly new. The only insight I gained from it was separation of agility into: Strategic agility, Portfolio agility and Operational agility. It would have been nice to know if you can have one without the others.

The main article also contains a sidebox which suggests some companies are centralizing decision making to improve agility. Personally I find that idea a little crazy. As far as I am concerned centralized decision making runs counter to agility for two reasons.

First it moves power away from those closest to the action. Those who deal with the customers, market and problem are the best place to make decisions. Moving decision making to the centre is disempowering and adds several layers of message passing.

Second centralized decision making is too often slow, bureaucratic or politicized. It takes time for the centre to realise a decision needs making, time to gather the information, time to make the decision and time to send out the decision.

Interestingly some of the examples given in the piece (e.g. Zara) are the same example cited by the Lean guys. More evidence that Agile is Lean by a different name.