What is Organisational Agility and What Can Leaders do to Cultivate it?

What is the 'agile organisation' and what can we learn from the successes and failures of major organisations in attempting agile transformations?

When leaders think about organisational development, they often focus on near term improvements - doing things we do now, but better. However, given how many transformative technologies and new ways of working are available to us today, and their potential to significantly improve operations, sometimes it is good to zoom out and try to imagine what our future organisations might really look like.

Several archetypes have been discussed as ideal organisational models in recent years, but these should be seen as design patterns to learn from, rather than complete templates that leaders should seek to replicate in their entirety. All organisational development should be specific to the mission, culture and context of a particular entity, its people and culture.

What do new organisational models have in common?

We have written often about the Rendanheyi model of a platform-based ecosystem of entrepreneurial micro-enterprises and how this reverses the traditional hierarchy and puts intelligence and decision making closer to customers, whilst maximising accountability and autonomy. The team at Corporate Rebels this week shared a long list of 50 organisations they believe exhibit the key characteristics of Rendanheyi (zero distance to the customer, focus on autonomy, shared rewards), which shows how this approach is gaining traction.

Previously, the Spotify model (or better said, an idealised version of it) used to be a beacon for companies trying to implement more agile and fluid team and project structures to become less bureaucratic.

We also recently wrote about Kyocera, whose amoeba philosophy is close to other cellular organisational models that Valve, Zappos and others have experimented with over time.

As a half-way house between hierarchy and agile team models, some organisations used to build on the dual operating system popularised by John Kotter to develop new functions in a more networked way whilst preserving a core ‘line organisation’ in a traditional hierarchy to manage the administration.

But what do all these models have in common?

• the goal of increasing agility, responsiveness to change and general adaptability as a key attribute of the organisation;

• a focus on small, autonomous agile teams as a unit of delivery; and,

• a more laterally connected and fluid system for connecting agile teams and their outputs.

We have seen agile methods used more and more widely in software development and technical project management within firms, but business agility - the application of agile principles to managing non-technical teams - has proved a more difficult challenge.

So what does an agile organisation look like and what can we learn from the experiences of early adopters about what works and what doesn't?

Photo by Murilo Viviani on Unsplash

Common agile transformation pitfalls

Developing agile business practices within individual teams, for example internal finance, HR or customer service teams, is not particularly difficult if you stick to agile principles and don’t try to enforce the kind of methodological rectitude and ideological language that some “agile” technical leaders are guilty of enforcing. Keep it simple and adapt ways of working to the goals of the team.

But where things get more difficult is in the spaces between teams where collaboration and alignment are critical, especially when we need teams to balance their own task completion goals with the wider goals for the organisation. Silos can easily re-form between teams, preventing the cross-functional communication needed for agility.

Also, when agile teams intersect with the traditional line organisation, tension sometimes arises as agile processes emphasise autonomy and rapid decision-making, while hierarchical structures rely on top-down control and slower approval processes.

At the intersection of structure and culture, even the best-designed agile frameworks can fail if the organisation’s culture is resistant to change, risk-taking, or continuous improvement. These failures typically stem from misaligned incentives, poor communication, and conflicting mindsets that create friction, preventing organisations from achieving true agility across all levels.

Without integration and collaboration at these critical points, business agility initiatives are often undermined.

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Further reading on business agility and creating agile organisations:

• How to Run a (Better) Agile Digital Transformation Programme

• On being agile, not just doing agile

• Principles and Patterns over Dogma and Rules

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Four dimensions of business agility

Many organisations begin their agile transformation by reorganising their structure - "moving boxes on the org chart" in an attempt to streamline operations and create a more flexible operating system. However, this approach only takes them so far. While a new structure can clear a path for agility, it doesn't automatically translate into the kind of deeper transformation needed. The real challenge arises when structure meets culture, creating friction between new frameworks and entrenched ways of working.

Organisational structure alone can’t change the underlying behaviours, mindsets, or leadership approaches that are crucial for success. We need to see this dimension within the context of its relationship with other challenges as well:

• Organisational agility helps enable rapid adaptation to market shifts, fostering a flexible and responsive framework.

• Team agility also needs to be a starting focus — enabling teams to work autonomously, make quick decisions, cultivate a culture of continuous improvement, and collaborate effectively across functions.

• Leadership agility is also important, as leaders need to shift from top-down control to fostering an environment of empowerment, trust, and continuous learning. It is essential for guiding teams through uncertainty, promoting a culture of innovation and resilience.

• Product agility is also required to ensure that teams can innovate quickly and respond to customer needs, but without the right leadership and culture to support experimentation and fast-paced change, teams may struggle to adapt.

In essence, while structural changes can be a first step, real transformation happens when agile practices are embedded into the culture, aligning leadership, teams, and products toward a common goal of adaptability and innovation.

Read on for some success stories and failures among leading organisations that have tried to address these four dimensions of business agility.