Table of Contents
What is Flexible Organization
It is defined that something is flexible when it has the capacity to change or adapt to external conditions. Moving this idea to the scope of organizations, flexibility refers to the ability of an organization to respond effectively to a competitive environment, environment in constant change and evolution, while maintaining or improving its competitive position.
The scenario in which we find ourselves now requires organizations to react quickly and adequately to constantly changing conditions (personalization, continuous changes in customer needs, increasingly fast deliveries, decreasing loyalty, smaller productive lots and with more varied assortment, etc.)
Organizations that can adapt to the needs of their customers have a common denominator that allows them to do so: they are much more flexible than their competitors.
But what exactly is organizational flexibility and why is it important for companies? What is it that makes an organization more agile?
Four areas can be identified, interconnected among them, in which companies can seek and promote this flexibility: the strategic (active participation in the market), the organizational (distribution of tasks, content of processes, internal communication channels), the productive (adaptation of production without incurring high costs) and labor (adaptation of human resources to the demand for products and services).
Now that we are immersed in the internationalization of companies, it is worth emphasizing that it is not possible to enter new markets if there is no productive flexibility to adapt the design of the products and the quantity produced to the needs of this new market. But at the same time, the company must have a staff capable of responding to the productive demands, so that labor flexibility is also essential, and it may be necessary to modify the organizational structure to group the staff in the appropriate way for the new processes.
Given that companies are what their human resources are capable of achieving, their management capacities must ensure that the desired flexibility is achieved and, in addition, that this is integrated in a manner consistent with the mission and strategy of the organization.
Organizational flexibility is achieved by being alert to internal changes and the environment, both opportunities and challenges, becoming the ability to use the available resources of the company in a timely, flexible, affordable and relevant in order to respond to those changes effectively.
Highly flexible organizations are more likely to be leaders in their market or have excellent results compared to their competition.
Every manager should consider, within his daily tasks, how to adapt his company to a flexible organization.
The Advantages of Flexibility in an Organization
Organizational flexibility is one of the main factors of success for those companies that want to enjoy a good position in the market and the conclusions of the study clearly confirm this. The most successful participants, based on their responses to several key performance indicators, are also the most flexible organizations. All organizations with high flexibility index are successful.
European organizations have understood perfectly the importance of the flexibility of the organization for their business and the future attitude towards growth and profitability. As is logical, the vast majority do not feel satisfied with their current degree of flexibility and intends to increase it:
Respondents who are successful and more flexible generally show better results than their rivals in most key performance indicators. For these, the important factor that allows us to succeed has been to have responded quickly to changes in the market.
There are interesting differences in European countries according to geography. The Scandinavian organizations (Denmark and Sweden) are considered the most agile in Europe, followed by the Swiss. In contrast, British, Dutch and German companies are considered the least agile.
In addition, the study concludes that highly flexible organizations are more likely to be leaders in their market or have excellent results compared to their competitors. According to the results obtained, one of the reasons for its leadership in the market or excellent results is that they are flexible and can continue to be so.
However, the dynamics of the environment sometimes require other skills that are not simply flexibility. For example, in environments that present few changes and are less complex, operational excellence is the most indicated focus of attention, thereby achieving maximum efficiencies.
However, if the dynamics of the environment move quickly, but still not very complex, then more entrepreneurial competition is needed to adapt to changes without being overwhelmed by complexity.
- In a slow but complex movement environment, it is usually necessary to plan with a strategy that can model complexity and allow time to design future scenarios.
- Finally, if the dynamic of the environment moves quickly and is complex, flexibility is the most necessary capacity. Even so, this does not imply that organizations should not focus on a certain degree of standardization and process efficiency.
Anyway, the conclusions also determine that, in general, the current environment and the one we will have in the coming years will be quite complex and dynamic so that this environment is becoming “the new normality” in all countries. the sectors.
How is organizational flexibility achieved?
Organizational flexibility is achieved by being alert to internal changes and the environment, both opportunities and challenges, becoming the ability to use the available resources of the company in a timely, flexible, affordable and relevant in order to respond to those changes effectively.
ACE (Allied Consultants Europe), together with the participation of Improven, has designed an index that allows determining the degree of flexibility of an organization. This index is based on six dimensions that are essential to ensure that organizations are flexible. These would be:
- Leadership and flexible management : It is the style of leadership and its adaptation to strategy, strength and speed in decision-making, the clarity of communication and the degree of confidence it generates.
- Flexible innovation: The degree of implementation of a systematic approach that allows sharing the inputs on market trends and continuously generate new ideas, as well as the possibility of using their internal and external networks to share experiences and knowledge, increasing the capacity of the organization to adapt to the changing needs of customers and technological advances.
- Flexible strategy : It is the way in which the strategy is developed, combining rational and intuitive contribution, fostering the internal dialogue and the clarity with which the strategic intentions are communicated and the degree of demand that is imposed, all of which contributes to the offer flexibility in the way of thinking and aspirations.
- Flexible culture : The way in which employees express their values and opinions through behavior will have an impact on the flexibility of their organization. The culture of the organization can be influenced by policies such as transparency of information and also how your organization recognizes and rewards employees for successfully responding to changes in the market.
- Learning and flexible change : The ability of employees to be aligned with the organization and share their vision, willingness to change and ability to implement those changes, as well as how to address the consequences of decisions made, will have an impact on the degree of flexibility of the organization.
- Flexible structure : The strength and solidity of the operations and processes combined with the degree to which their managers are clearly empowered to make decisions, will allow to determine their capacity to respond to the challenges in the market.
Key drivers of flexibility
Our study reveals that there is no simple solution nor do we know what is the best way to raise the degree of flexibility of the organization.
Some of the key actions carried out by the most flexible organizations that help increase their agility are:
- Cuts in expenses when necessary
- Reacting to the changing market / position in the environment
- Navigate quickly to change
- Successfully launch new products / services
- Attract and retain the best talent
Examples of Flexible Organizational Structure
The flat organizational structure is one of the best examples of flexible organizational structure. , there are very few positions between the junior level employees and the management level of the company. In this structure, There is an active dialog between the employees and the senior management level of the company as there are very few positions in-between. The process of learning and understanding becomes much simpler with the flat organizational structure.
Small businesses may also use a team-based type of flexible structure. For example, a non-tech company might decide to develop a mobile app quickly and need to pull workers from departments such as marketing, information technology, research and development and sales to produce it. A project manager may oversee this temporary team who will communicate and work together and make most decisions on their own. The team would break up once the app development completes.
Another use of a flexible structure would be a larger business that operates in multiple geographic areas. In that case, each region’s branch may need to make decisions in response to different customer needs. So a flexible model that decentralizes control becomes most practical for the business’s success.
The Disadvantages of Flexibility in an Organization
- Certain employees require a structured environment to thrive
- There is no clear distinction between work and home
- In team-oriented departments, it may be nearly impossible to implement flexible working schedules as teams must meet almost daily
- Although unlikely, there is a chance that your employees will take advantage of their new-found freedom and slack off on their work. However, such an instance would be hard to come by, even so, it would make it self-apparent quite quickly
- If you are a serial micro-manager, you may struggle to adjust your management style and find yourself at a loss at how to direct your team
- Juggling clients can become hard, especially when those you are dealing with do not operate in a similar manner, and expect continual 5 day a week service
Conclusions: What do I need to be flexible?
Our study reveals that what is important to improve the flexibility of the organization will be mainly:
- Accelerate dramatically the pace of strategic renewal.
- Make innovation the daily work of all.
- Create a highly committed work environment that inspires employees to do their best.
In short, if you improve the flexibility of the organization, you can be ahead of the competition.
From the study it appears that a new order seems to be emerging in the way leading organizations operate. Traditional thinking is based on two principles: The hierarchical (where each level of the organization plays a clear and defined role in a strategic process that goes from top to bottom, senior management designs the strategy, the middle management staff communicates and direct superiors make sure that it happens) and linear (a logical chain that begins with strategic thinking, then follows the design of the organization and is finally completed with the development of the direction).
However, these well-founded principles seem to be questioned today by the current levels of complexity and the increase in the speed of response required by the external environment. To confront their respective challenges, organizations must nurture and show off in a new set of skills.
This movement requires a change in the way of thinking with respect to the direction, innovation and establishment of the strategies. This approach must also be supported with processes and structures that offer a firm platform to adapt to market changes.
So, where do you start? Thanks to this study, you can know how much flexibility your organization has and we can compare it with the Organizational Flexibility Index, in order to identify the most efficient actions that allow us to be ahead of the competition with greater agility and success.