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.


  1. Doesn't it depend on what you're deciding?

  2. Sorry Anonymous, I don't follow your logic.

  3. Imagine you have ten regional locations. One region's customers are demanding X capability, so that region takes advantage of decentralized decision-making and immediately decides to develop X capability.

    Meanwhile, unknown to them, another region's customers are also demanding X, and that region is busy developing it too. In fact, it turns out that all the regions are independently developing very similar capabilities.

    The regions could talk to each other, of course, but how do they find the right people to talk to? Do they really want to make nine phone calls before making a decision? What if they describe the capability in one way and another region describes it in slightly different way and doesn't realise they're talking about the same thing? What if several regions want to be the one to drive the development? Who decides which one actually does?


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