Agility: The New "Secret Ingredient" of High Performing Teams
By: Nick Horney, Ph.D.
Principal, Agility Consulting
According to 2012 a Boston Consulting Group (BCG) research report, in a volatile, uncertain, complex and ambiguous business environment, teams must be more than high-performing to win in the marketplace, they also need to be AGILE. This is solid evidence for Agility as the new "Secret Ingredient" of High Performing Teams.
The increasing speed, magnitude and volume of turbulence businesses face demands new ways of focusing on team effectiveness. Agility Consulting has been advocating team agility for the past decade, based on data collected through our work with a broad portfolio of industry-sector clients. We have also regularly highlighted the strong impact of leadership and organizational agility on organizational performance.
Boston Consulting Group (BCG) has reported in recently published research in 2012 that adaptive (agile) companies significantly outperform less adaptive companies during turbulence. While the eye of VUCA (volatile, uncertain, complex and ambiguous) storm may have passed, the world continues to be persistently characterized by VUCA. Therefore, the BCG research emphasizes the need for organizations to be agile to thrive. The first part of the research study used growth in market capitalization, spanning a 5-year period, as the key indicator of performance. Using BCG's Adaptive Advantage Index (AAI), researchers assessed 2,127 US public companies. The 0.91 correlation BCG found between the AAI and market cap growth is very impressive! Companies scoring 80% - 90% on the AAI showed an average 20% growth in market cap over the 5-year period. In contrast, companies scoring 0 on the AAI saw an average drop in market cap of around 15%.
High Performing AGILE Teams are most successful
The second part of the BCG study looked specifically at adaptive behaviors in top teams. Researchers used a small sample of 9 successful companies, again dividing these into top-tier, middle-tier and bottom-tier performers. Financial performance was based on averaging net income over a five year period. Companies were a mix of global and single-country organizations and included companies from developed and developing markets.
The study involved an extensive deep dive into aspects of the senior leadership teams of these companies, all intact for the 5-year review period. In all, a representative sample of 93 executives was interviewed and surveyed. As in the first part of the study, agility was strongly associated with performance. The most adaptive senior teams came from the top-tier performers and thus were leading the most successful agile companies. >> READ MORE