Agility in business, especially in times of crisis, improves the company’s operational performance. The latest report by the McKinsey Institute (The journey to an agile organization) shows a 30% to 50% increase in operational performance among companies designated as “agile”. One way to achieve an agile organization is to use feedback (reviews), both client and collaborator.
This increase in efficiency is even more important to withstand current economic fluctuations.
Which Indicators Are Used To Measure Operational Performance?
In the McKinsey report, indicators used to measure operational performance included:
- time to market. This is the length of time a commercial offer is developed or the length of time between the design and launch of a new product. Shortening this duration is crucial to outperform competitors and increase profitability.
- issue-resolution speed. It is simply the speed of problem solving within the company. This is a strong indicator, because the higher it is, the more “agile” the company can be considered – it adapts quickly to changing circumstances.
- Predictability: This indicator, which may seem abstract, is to assess whether the company has a clear and accurate view of the period to come. The more the company is able to predict changes in the market, the economic context, etc., the greater its operational responsiveness.
Bonus : To assess the three points below, one can rely on a field survey of employees. For more information on HR satisfaction survey solutions, click here !
- gross product, or rather its quality. The quality of the product (or service) sold is also important. A quality product, whose customers are satisfied, is a reflection of a good internal organization and a company that is both agile and efficient.
Bonus : Measuring customer satisfaction is also possible through surveys, which thanks to software like I Feedback Now can be highly accurate, with easily interpretable results. Discover for example our Client Case on SNCF by following this link !
In short, operational performance is divided into three families of indicators: the speed of adaptation, the ability to achieve its objectives (particularly with the TAR, target-achievement rate), and other industry-specific data (gross product…).
We can also add here the goal of reducing costs, because it is also about optimizing the profitability of the company.
To analyze operational performance and detect problems quickly, feedback is a truly relevant solution.
The Effects Of Feedback And Agile Method
Thus, feedback, an integral part of the “agile method”, mainly allows:
- to increase the speed of decision-making, and by the same product development speed
- reduce the time it takes to market as a whole.
Among the companies scrutinized by McKinsey in the report mentioned above, a telecom operator has seen its time to market reduce by 70% by applying different agility methods, including the use of feeback. On average, the Institute estimates that agile practices reduce time to market by 40%.
In addition, there is a direct consequence of the company’s increased efficiency: a boost in financial performance. McKinsey estimates the latter to be 20% to 30%.
Of course, Rome was not built in one day, and a company does not become agile in a snap of a finger.
Transforming Through Customer And Employee Experience
Changing your business in depth is never easy. But implementing solutions for collecting and analysing opinions (customers or employees) can be an accessible first step to improving the company’s performance.
McKinsey has modelled 3 transformation archetypes in its report: what is your way of transforming?
- Step-wise: This is a slow transformation, which leaves a lot of room for analysis, without haste. The downside is that it may not be fast enough.
- All-in: like poker, it’s about “betting everything” on the transformation of the company. One strikes hard, only once, rather than relying on waves of successive changes. The transformation is therefore very rapid, but can be quite brutal.
- Emergent: Here, the transformation is special. It does not intervene after the creation of the company, but from the design of its business plan. This is of course the easiest, because the company is thought from the beginning as agile, and there is no need to change the processes along the way.
In short, no matter what kind of agile transformation you envision, it will take either time or energy and a great organizational capacity. However, improving the operational performance of your company, and thus its resilience, becomes increasingly necessary during the time of the coronavirus (economic and social crisis).
So why not start with feedback? Contact us here to learn more about our personalized offers !