Study: Agile organizations are 2.7 times more successful than competitors
1st European Agile Performer Index: agility is a competitive advantage for organizations
Munich, April 19, 2017 – Agility stands for success: in a comparison of a 10-year period, the most agile organizations in an industry are 2.7 times more successful than their competitors. That’s the takeaway of the first European Agile Performer Index, conducted by advisory firm goetzpartners and NEOMA Business School. The study with managers from 285 European organizations is the first to investigate in detail how an organization’s agility and performance are correlated, how widespread agile approaches are, and which measures enable organizations to progress in the dynamic economic landscape of today. The results underscore an urgent need for action on the part of non-agile organizations: only 5 percent of organizations investigated manage to be more successful financially than their competitors despite low agility.
“In today’s turbulent economy, the question for organizations isn’t whether to become agile – it’s how,” states SEBASTIAN OLBERT, partner at goetzpartners. “The Agile Performer Index is striking testimony that agility and financial performance are correlated. However, agility can only contribute fully to business success when it embraces all the dimensions of an organization’s design: from clearly communicated corporate goals, flat hierarchies and simplified processes, to open, engaging communication, and leadership styles that encourage development.”
Digital = agile?
In a comparison between sectors, Travel & Transportation and Professional Services lead the agility rankings, both scoring 73 percent. The lowest scorers are Energy with a score of 66 percent, the Public Sector (65 percent) and – lagging well behind – Financial Services with 62 percent. Nor does the Telecommunications, Media and Technology sector do particularly well: despite undergoing years of digital transformation, it still only ranks in the lower midfield (68 percent). Contrary to expectations, the digital maturity of an industry is not necessarily a driver of high organizational agility.
There is also considerable disparity between the levels of individual organizations. Top managers rate their own company’s agility much higher than do middle managers. With disparity on the various aspects of agility ranging between 6 and 15 percentage points, agile thinking at C-level does not necessarily equate with agile action at operational level. Decisions at top management level might indeed set the stage for aligning the organization to agile principles – but only an actively managed transformation process that embraces every aspect of the organization will ensure that agility is cascaded through and institutionalized within the entire organization.
“Agility is more than just being able to respond ad-hoc to new situations,” explains Prof. Dr. Christopher G. Worley of the NEOMA Business School. “In fact, it’s a whole new capability for an organization: the repetitive capability to adapt promptly, effectively and sustainably to achieve performance advantages.” The study authors used four “agility routines” as a basis for appraising the agility of participating organizations. Highly agile organizations achieved high scores on all four aspects:
- Strategizing – factors such as the corporate purpose, strategy, identity and sustainability
- Perceiving – a good internal and external network, information flow and future orientation
- Testing – factors such as innovation, learning and targeted resource deployment
- Implementing – change management, leadership, personnel development and incentives
“The four routines form an agility paradigm that ideally embraces the entire organization,” explains Sebastian Olbert. “The study demonstrates that the more deeply agility and agility routines are embedded into an organization across all design dimensions, the more successful it is.” Based on more than 60 transformation programs goetzpartners, developed not only measures packages, but also derived an approach which addresses strengths and weaknesses of every company on its way to an agile transformation. Thus, a clear starting point for every company regarding agile action can be defined.
Europe ahead of USA
The Agile Performer Index also draws a comparison with a similar study of 80 organizations conducted in the USA, also led by Prof. Dr. Worley. The result: whereas 38 percent of respondents in the USA already deploy three or four agility routines, the figure in Europe is 46 percent. So in terms of agility, European organizations are more than able to hold their ground against competitors in the USA.
About the Agile Performer Index
For the Agile Performer Index, goetzpartners and NEOMA Business School surveyed 285 executives from European organizations. On the basis of an extensive questionnaire, the authors evaluated the agility of participating organizations, and investigated correlations with data on financial performance.
In addition to the detailed analysis, the study report also provides organizations with a scientifically-backed set of measures to raise their own agility.
You can download the complete Agile Performer Index study HERE.
goetzpartners is an independent advisory firm for all key issues of entrepreneurial activity: Strategy, M&A, Transformation. With more than 350 professionals operating out of 14 offices in 11 countries, we advise clients worldwide in all key industries.
The company ranks among the 10 best-performing German advisory firms (Lünendonk®). goetzpartners has received awards three years in a row as part of the “Best of Consulting” contest by the renowned German magazine “WirtschaftsWoche”, most recently in the “Project Excellence” category (2016).
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