Agility and Organization Design:: A Diagnostic Framework

O rganization design is a cornerstone of a firm’s competitive advantage and performance. Research is clear that even the most cunning strategy will not reach its potential if an organization’s structures, processes, and systems do not support it. However, the complexity, unpredictability, and instability of environmental change seem to have outpaced our traditional organization design approaches and concepts. Executives are struggling to design firms that are efficient enough to drive performance in the short run and flexible enough to sustain performance over the long run. The ‘‘new normal’’ requires organizations to have an amazing amount of agility just to survive, let alone thrive. Agility is a dynamic organization design capability that can sense the need for change from both internal and external sources, carry out those changes routinely, and sustain above-average performance. The final characteristic – sustained above-average performance – is the sine qua non of agility. Many firms are able to push their performance to above average in the short run; the real issue is dynamically aligning structures, processes, and systems to sustain it. This article describes a comprehensive agility framework and then applies the framework to diagnose an organization’s agility capability. We begin with an overview of agility and the proposed framework and then describe its application.