I posted on enterprise agility before, but recently I came across some very interesting research data, so I decided to give this topic a different angle, taking the present economic conditions into consideration.
The ups and downs of our economy are enough to make any executive dizzy. Just look at U.S. Steel (X). In the second quarter of 2008, the company achieved record profits, yet in November, executives laid off 675 workers and postponed the construction of a new $450 million plant.
When the economy weakens, leaders are forced to link expenses to revenues. To accomplish this, they instinctively impose top-down, across-the-board solutions. Unfortunately, the latest research shows that this common strategy results in a 50-50 chance of damaging the company’s long-term ability to thrive.
Nevertheless, there are organizations that shine in changing financial conditions. The most agile companies that are able to quickly shift resources and employees to meet changing demands find millions of dollars in savings and often emerge stronger.
The meaning of “agility”
First of all, what does it mean to be “agile”? Enterprise agility (business agility) is a company’s ability to rapidly and cost-efficiently recognize changes and adapt to them. In short, to be “agile” means to be able to make the right decisions and implement them fast. Making the right decisions is impossible without having real-time visibility into your company and the complete picture of your projects. Without this visibility, it would be like driving in the fog. You’re not sure what’s ahead of you, but you have to keep driving. That’s why you need the information that is in the minds of the employees dispersed across the organization. You need the knowledge coming from bottom-up. A constant dialogue between leaders, team members, stakeholders and clients is crucial. This fact is proven by the research conducted by Joseph Grenny, the co-author of three immediate New York Times bestsellers: “Influencer,” “Crucial Conversations,” and “Crucial Confrontations.”
During the last quarter of 2008, in the thick of the financial downturn, Grenny and his colleagues studied more than 2,000 managers and executives from more than 400 different companies. The results were remarkable. The researchers found that teams that foster focused, unified dialogue are 250% more likely to survive. Less agile teams are 360% more likely to miss millions of dollars in lost opportunities.
Is bottom-up the right solution?
So if an enterprise wants to be agile, should it use bottom-up management? Indeed, besides being a great way to get knowledge from the experts at the team level, the bottom-up approach to management on the whole, and to project management in particular, has a number of advantages. One of them is that it empowers team members to think more creatively. They feel involved into the project development and know that their initiatives are appreciated. The team members’ motivation to work and make the project a success is doubled. Yet, we all know that the bottom-up approach is often criticized for a lack of clarity and control. To be able to execute your decisions fast, you need to keep a tight, top-down control on operations. Otherwise, you may miss an important opportunity.
What’s the right solution then? The best way is to find a balance between the two and take the best practices from both of them. I once wrote a post about taking the best from the two approaches (bottom-up and top-down) to project management.
So to be agile, you need to be able to blend top-down control with bottom-up agility in a “Ying and Yang” style. Later in this blog, I’ll continue to develop my ideas on how this can be done by upgrading your project management practices to “Project Management version 2.0.” Now, I’d love to hear your thoughts and answers to the following questions:
- Is agility important?
- How can we make a company more agile?
- Do project management practices influence the overall enterprise agility?
- Have you tried blending top-down and bottom-up in project management?
Jump into the comments section and share your vision.
(Guest post by Andrew Filev, Founder & CEO of Wrike, a Project Management 2.0 startup. Andrew is a frequent speaker and recognized expert in project management disciplines, and he blogs @ Project Management 2.0)