The COVID-19 pandemic likely exacerbated what we found in our global study, conducted before the crisis: The majority of professional services businesses experience competing challenges moving to real-time planning, including lack of relevant skills, a bureaucratic culture, and inflexible legacy technologies. Professional services organizations are also significantly more likely than other sectors to perceive a bureaucratic organizational culture as a central barrier to updating processes to respond to changing business needs.
Our global survey of 998 executives, “Organizational Agility at Scale: The Key to Driving Digital Growth,” shows the majority recognize that organizational agility is key if they want to drive long-term digital growth. And, perhaps more tellingly, we found that there is a strong relationship between digital revenue growth and organizational agility.
We also found that the professional services industry comes in last among the sectors predicting the highest digital revenue three years from now. This could be a reflection of the highly personal, long-term nature of professional services engagements. Or, it could mean that many professional services organizations need to put their firms into high gear to stay on top. We're currently conducting an update to this study as you read this, and we’d venture to guess that to stay afloat, many more professional services firms have been forced to focus on digital revenue streams much sooner than they’d anticipated.
We identified five key behaviors that are crucial to organizational agility, and then grouped survey respondents based on their level of adoption of these behaviors. “Leaders” (15% of respondents) achieved high performance across all five of the behaviors, while “aspirers” (30% of respondents) achieved high performance in four of them, and “laggards” (55%) achieved three or fewer of the behaviors.
Here are the five behaviors that are necessary for organizational agility:
Continuous planning. They plan in a continuous, real-time manner, which gives them the speed, agility, and dynamism they need to innovate successfully.
Fluid structures and processes. Leading organizations build fluid organizational structures and processes. Nearly half claim the ability to reallocate people quickly to where their skills are needed.
Building the future workforce. Leaders are much more likely than laggards to have plans to upskill the majority of their workforce and push specific initiatives to increase employee engagement.
Informed and empowered decision making. At 80% of leader organizations, all employees have access to timely and relevant data and are empowered to make appropriate decisions.
Measurement and guidance. Leaders have made significant progress in developing tools and metrics to measure the performance of digitally driven innovations. This is giving them a “fail fast” mentality: 94% say they are able to steer away quickly from unsuccessful projects.
Our survey broke down organizational agility by industry. In the professional services industry, 10% were identified as leaders, 66% were identified as laggards, and the remaining 24% were aspirers.
Here are a few key insights from survey respondents from professional services companies:
Growth plans are always changing. 67% said that their strategy for growth by digital innovation is constantly evolving.
Doors are open to upskilling. 68% said that employees in their companies are encouraged to grow through learning new skills.
Frontline workers get the investment they deserve. 65% said that customer-facing employees (the “frontline”) have the power to make decisions to make the customer experience better.
Access to digital tools. 72% reported that they have the tools they need to measure performance of new service lines and digital products.
Though many professional services companies are putting the right pieces in place, it’s not always easy to work toward the five behaviors that make organizational agility, at scale, a reality.
Our new reality is making it more vital than ever to have the ability to plan in real-time. Professional services companies want to move toward real-time, integrated planning, but their most common barriers to accomplishing this are a lack of relevant employee skills, a bureaucratic organizational culture, and inflexible legacy technology.
They also strive to update business processes to respond to the changing needs of their business, but they struggle against similar barriers: bureaucracy, inflexible legacy technologies, and an unwillingness to move away from legacy processes.
48% of professional services leaders said that their firm’s KPIs don’t reflect the current digital era.
Two keys for professional services firms to achieve true organizational agility are setting the right KPIs (especially when it comes to hiring, staffing, and billing), and ensuring that the right data is accessible to relevant stakeholders.
48% of professional services leaders said that their firm’s KPIs don’t reflect the current digital era. That reinforces the idea that a key starting point in the journey to organizational agility is making sure you’re working toward and measuring the right things. When you start in the right place, you start in the right direction toward leading in the digital era.
And the second key to success in organizational agility is ensuring the right people have access to the data they need. Professional services executives shared that when it comes to data, only 40% have access to all the relevant data they need.
So, to make real progress toward the benefits of organizational agility, professional services firms should focus on setting the right goals, and work to ensure the right stakeholders have access to the data they need.
Get an overview of “Organizational Agility at Scale: The Key to Driving Digital Growth” findings or download the full report.