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Building a nimble organization with EDM

Hugh Taylor (no relation), with whom I am giving a webinar on "Agile Compliance" tomorrow pointed me at a McKinsey report "Building a nimble organization" in the McKinsey Quarterly (subscription required). This McKinsey report defines nimble organizations as having agility and speed - agility being about changing direction fast (new strategy, new tactic) while speed is about executing on these. Often business agility is considered the combination of these (for instance Gartner defines it as a set of steps: Sense, Strategize, Decide, Communicate, Act) and certainly I tend to include speed and agility under the heading of "business agility". While the respondents clearly think this is important but are not sure what to do about it. As the report says

Executives around the world overwhelmingly agree that the agility and speed of their companies are urgent business issues
but
There is no consensus among executives on which organizational and behavioral barriers most impede a company's agility and speed.

Interestingly only a tiny 7% think IT is a contributor to this kind of agility, an astonishingly low percentage. As the report says:

State-of-the-art IT is not considered particularly important for addressing the issue.

This contrasted with some of the barriers respondents identified, many of which seemed to me to be ones technology could be used to overcome. Respondents listed barriers like overly centralized decision making, a tendency to refer decisions up and an inclination to over analyze. These three barriers can all be addressed, at least somewhat, with a technology-enabled Enterprise Decision Management (EDM) strategy. For instance:

  • Automation of operational decisions using an EDM approach pushes decision-making authority to the point of contact with a customer, avoiding a need to refer decisions to some central or higher authority.
  • An inclination to over-analyze can be partly addressed by not presenting information to employees but instead presenting conclusions or actions. If I am being given a ton of information about a customer and trying to decide what to do I can spend a long time slicing and dicing the information. If, instead, I get a set of recommended actions to take then I can act more rapidly.

In fact the report identifies one area that got broad agreement that can be delivered using EDM:

A broadly favored mechanism for fostering agility and speed is establishing a clear link between corporate strategy and employee performance goals.

Now I have written before about how EDM drives strategic alignment by linking corporate strategy not just to employee goals but to their actual actions. This has an added benefit of enabling corporate strategy to be linked to automated systems as well as those that involve people, improving a company's consistency (something often sacrificed in a drive to become more agile). It also allows a strategy to be implemented operationally while remaining confidential. Lastly the report did not identify a lack of timely performance information as an issue - perhaps because agility is more about turning your performance management information into useful action.

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» Great article on Agile Compliance from James Taylor's Decision Management
Hugh Taylor (no relation) has just had a great article on Agile Compliance published by Align. Not only am I quoted in it, always a sure sign of a top-flight article, it makes some great points about delivering agility in... [Read More]

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