In 1958, the average lifespan of a company in the S&P 500 was approximately 61 years. By 2017, however, that figure fell to about 18 years. So, what could have caused companies to wink out of existence, not at retirement age, but before they’re old enough to have a J&B on the rocks at Bobby Van’s down the road from the New York Stock Exchange?
The answer: technology. As increasing advances in digital capabilities drive an exponential acceleration of tech adoption across every industry, companies are being disrupted out of their industries faster rate than the line for the guillotine during the French Revolution.
As in nature, when faced with changing environments, redistributed resources, and new competitors with shinier, pointier teeth, it not the strong or the quick that survive, but the most adaptable.
According to a new report released by international consulting firm Capgemini, companies that want to survive need to not only do ‘agile’ methodologies, but genuinely be agile.
What is agile?
Agile is a mindset and operational style that relies on breaking down complex tasks into smaller iterations that can then be constantly adapted and altered in order to compensate for change. According to the report, agile methodology usually involves self-governing, crossfunctional teams working on a ‘product’, which could be software, a customer product, a process improvement, or a marketing campaign, and so on.
“SAAB’s Gripen fighter jet was developed in carefully coordinated, three-week iterations at just 18% of the cost of the F-35 jet. Using these Agile-inspired techniques has helped make it the world’s most cost-effective military aircraft.1 During show production, Netflix relies on the Agile principles of fast feedback and iterative changes via deep data analytics. As a result, Netflix Originals have a 35% higher success rate than other TV shows.”
Capgemini’s new report has broken down the results from a series of in-depth interviews with more than 45 organisations that can be considered ‘agile frontrunners’, that have scaled agile beyond IT or at a program or portfolio level. From this data, Capgemini identified four key characteristics of an agile company operating successfully at scale:
• Experiment: Start with customer-focused initiatives; scale gradually
• Orient: Change culture by changing behaviors and focus on developing T-shaped skills
• Govern: Link Agile portfolio planning and operations with business strategy
• Accelerate: Modernise IT with DevOpsi and microservices
Companies that are pursuing an agile transformation of their operations should, it would seem, seek to instil these values from the top down. Bryan Campbell, Agile Transformation Coach at Exxon Mobil, said in the report, “Effective Agile transformation starts at the top and executive leadership needs to maintain accountability. Each functional leader needs to establish an agile transformation group with named coaches and champions – these individuals will be directly responsible for applying agile in their area. However, it is important to place the ownership on the executive leaders to demonstrate the benefits of their agile adoption. The transformation groups cannot own the success metrics – that has to be owned by the leaders.”