Be an Agile Company

How agile is your company? That may sound like an unusual question, but it was prompted by another’s thoughts. I just read an article in CFO magazine encouraging small and mid-size companies to consider moving budgeting, planning, and forecasting to the cloud. Actually the article was an interview by CFO magazine.

Something Else

As mentioned, this interview revolved around using the cloud to increase agility for companies. But, let’s look at agility as it relates to some other things that impact the ability to be an agile company.

Organizational Simplicity

The term organizational simplicity is not a new one. At the heart of it I think is encouraging companies to avoid excessive complexity and the rigid inflexibility that comes with it. Essentially it encourages minimizing the number of layers in an organizational structure and increasing the flexibility of employees. A simple example of flexibility of employees is cross-training. The implementation of cross-training not only provides coverage for when an employee is sick or on vacation, it also allows a company to move human resources around to meet ever changing needs. See Why Cross-Train Employees for more on this.

Structural Simplicity

The reference to minimizing the layers in a company is really to draw attention to the waste and inefficiency created by excessive management levels and the communication difficulties this creates. You’re probably familiar with the game of telephone. If so, you know that the game is played by having someone whisper something (a word or phrase) into the ear of the person next to them. The second person in turn whispers it to the next person and so on. If enough people are involved it can be quite interesting and humorous to hear what the last person in the chain thinks the word or phrase is. For example, the message may start with the phrase “Big Cat” and by the time it gets to the last person it is heard as “Bigot”. Quite a change, wouldn’t you say? This is important because it demonstrates the difficulty of clearly communicating when too many layers are involved. I once knew of a person who said to another employee, “Let’s start a rumor and see what kind of shape it’s in when it gets back to us.” Okay, I don’t suggest doing that, although it might be fun.

Planning Simplicity

There is a tendency in many companies to get overly complicated when planning, whether it is budgeting, forecasting, or introduction of a new product. My previous blog The Business Plan – Hold On to the Napkin dealt with this from the perspective of a business plan, particular with start-ups or younger companies. Essentially, the idea is that it really is more important to have a basic structure of a plan to hold onto. This is because so many detailed plans are largely guesswork and quickly fall apart, whereas the basic concept may well be unchanged. It may be that the perceived market is not the correct one or that the marketing methods need revising. Regardless of what changes, operating with a basic structure of a plan makes it easier to adjust on the fly. See Business Plan Framework for more explanation.

So What about Agility?

All of the ideas above are just some of what makes for an agile company. A flat organizational structure improves communication, cross training makes for an agile workforce, and a basic business plan structure makes changes easier. In fact, all three of these make changes easier and faster to implement and help keep employees engaged.

Do you have an agile company? If not, what can you do to make it happen?

If you want to know more, contact AimCFO – Contact

As always, your comments are welcomed.

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