Organizational Agility: How Can It Help Advisory Firms?

Gain a key competitive advantage for your wealth management firm by transforming your business into an agile enterprise.

Mohan Sawhney is a globally recognized management consultant, author, and academic. He is the McCormick Foundation Professor of Technology and the Director of the Center for Research in Technology & Innovation at the Kellogg School of Management. Prof. Sawhney has written seven management books as well as dozens of influential articles in leading academic journals and managerial publications. His most recent book, “The Sentient Enterprise: The Evolution of Business Decision Making,” was on the Wall Street Journal bestseller list. A pioneer in online executive education, Prof. Sawhney has created courses covering topics such as digital marketing strategies, product strategy, artificial intelligence applications for growth, and the Kellogg chief product officer program.

Each year, our SPDR® MasterClass program draws on insights from industry-leading practitioners like Prof. Sawhney to help advisors grow their businesses, keep pace with change, and better satisfy clients’ evolving needs.

The rate of change we are experiencing today is the slowest it will be in our lifetimes. Organizations, however, have a limited ability to absorb and act on change. What does this mean for advisors as leaders and business builders? During a MasterClass session, management expert Mohan Sawhney discussed how organizational agility can improve advisory firms’ capacity to respond, pivot, flex, and thrive in a world defined by disruption.

What Is Organizational Agility?

“Agility is not speed, it’s nimbleness,” noted Prof. Sawhney. “Agility encompasses your ability to adjust, adapt, and change direction. In a business context, it’s a simple idea: Agility means you can detect a signal in the environment — such as a threat or opportunity — interpret it, and act upon it. How long does your enterprise take to go through the cycle? That’s how agile you are.”

Agility is a multiplicative model. If any component is zero, then the result is zero, and all components are equally important. The four dimensions of enterprise agility are:

• Process agility: Built on rapid experimentation and adaptability
• Organizational agility: Defined by organic, flat, self-organizing, client-centric teams
• Strategic agility: Requires shared mission and vision, flexible resource allocation, foresight and insight to sense and seize opportunities
• Infrastructure agility: Characterized by scalable cloud-based systems

Focus on Process: Bringing Agility to Advisory Practices

How can advisors promote agility in their practices? Start by rethinking your processes. When managing projects and initiatives, break away from traditional processes and try agile methodologies. Born in the software development world, agile processes can be translated to the wealth management realm when teams need to implement new ideas, services, and products.

Agile processes seek to improve the speed, predictability, and adaptability of development by moving from “Big Projects” and sequential execution to iterative planning and testing with small collaborative teams. Conventional processes are characterized by big ideas, big projects, and big budgets. In contrast, agile processes are defined by micro strategies, big insights, and rapid iterations. Where conventional processes ask firm-first questions such as, “How do we grow our business?” the agile process puts clients first by asking, “As a client, I want … so that I can …”

Core principles of agile development include:

• Client involvement: Clients should be closely involved in development processes to provide new requirements, prioritize requirements, and evaluate iterations.
• Incremental delivery: Teams develop products in increments, with a preference for shorter delivery schedules, e.g., every two or three weeks.
• People over process: The best requirements and designs emerge from self-organizing teams. Managers should leave team members to develop their own ways of working.

The agile process is iterative and centered around client needs. The main steps are:

1. Framing: Define the problem behind the problem. Is this the right problem to solve? Is it an important problem to solve? What are the costs of not solving the problem?
2. Ideating: Brainstorm possible solutions. Use analogies and metaphors, reverse orthodoxies, and get out of the building.
3. Prototyping: Build a minimum viable prototype and develop a lean experimentation plan.
4. Testing: Validate and iterate. Test with clients, collect feedback, learn, and iterate.

Agility can be a powerful source of competitive advantage. Advisory leaders with the courage to implement agile frameworks can better position their teams to sense and respond to threats and opportunities in a rapidly changing environment.

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