In today’s organizations, agency can stand out as a cornerstone for driving innovation, decision-making, and problem-solving. But I find that all too often, it doesn’t.
Agency, as I define it, is when team members are empowered to make decisions and take action that results in positive outcomes. This empowerment is a pivotal lever for bolstering organizational agility and adaptability in today’s rapidly changing world.
Haier Group, a global leader in consumer electronics and home appliances, provides us with some insights. Haier has championed the Rendanheyi Model, a unique approach that underscores employee autonomy and entrepreneurship. Employees operate as independent units or micro-enterprises, steering decision-making, innovation, and even overseeing profits and losses. This strategic approach has thrust Haier to the global forefront of the home appliances industry, with its 2022 global revenue having increased by 5.4 percent year-over-year, reaching $52 billion. Its global total profit also rose by 3.7 percent.
A 2022 study by Wockelberg and Ahlbäck Öberg explored agency within organizations in Norway and Sweden. The findings are illuminating. Organizations that bolster more horizontal interaction (collaboration across different parts of the organization) tend to yield more successful outcomes than those entrenched in vertical exchanges (top-down decision-making).
In layperson’s terms, when employees across levels feel they have a voice and can collaborate, it leads to enhanced results. That is at the heart of agency. The study also highlighted that Swedish firms, renowned for their robust emphasis on agency and autonomy, reported more frequent and fruitful interactions and collaborations. This insight debunks the notion that heightened autonomy dampens interaction. On the contrary, organizations that empower their team members witness increased collaboration and better outcomes.
This insight underscores the overriding importance of nurturing agency within the organization. It’s not merely an employee experience move, like free fruit or casual Fridays – it’s a strategic imperative. Crafting an environment where individuals feel valued and are empowered to make decisions fosters a more innovative, collaborative, and performing organization.
In business, cultivating agency is a potential pathway to organizational excellence. It’s about creating an environment where individuals are not just contributors but decision-makers, actively participating in the journey towards positive outcomes. This aligns with the definition of agency: being empowered to make decisions and take action that results in positive outcomes.
Atlassian is known for its “ShipIt Days,” a quarterly event that has been running for years where employees are given 24 hours to work on any project they choose, as long as it is related to Atlassian products or processes. Team members from all departments, not just engineers or developers, are encouraged to participate, fostering a culture of innovation, autonomy, and cross-functional collaboration.
During ShipIt Days, employees are free to make decisions, take action, and work on projects they are passionate about, aligning with the concept of agency. This event has led to the development of new features, improvements, and innovations that have benefited the company and its customers. As the company says, “It embodies our culture of innovation and puts weight behind a sacred company value: ‘Be the change you seek.’”
Consider another example, this one from Supercell, a Finnish mobile game development company known for its organizational emphasis on employee agency. At Supercell, small teams, known as “cells,” operate like independent small enterprises. Each cell is empowered to make decisions and take actions that they believe will lead to the most significant success. This organizational model has shown Supercell to be one of the leading mobile game developers in the world, showcasing the power of agency in driving innovation, creativity, and success.
The research by Wockelberg and Ahlbäck Öberg highlights the importance of agency in organizational interaction and collaboration. Their study reveals that organizations with more horizontal interaction tend to yield more successful outcomes. This finding is mirrored in the operational model of Supercell and the Atlassian “ShipIt Days,” where the emphasis on horizontal interaction within and between team members fosters a culture of collaboration, innovation, and shared success.
Cultivating agency is about entrusting individuals with the autonomy to make decisions and take actions that align with organizational goals and values. It’s about dismantling hierarchical barriers and fostering a collaborative environment where diverse perspectives and ideas converge to drive innovation and solve complex challenges.
The tangible benefits of promoting agency within the organization are manifold. It enhances innovation, improves problem-solving capabilities, and boosts employee satisfaction and retention. It can also position the organization as a leader in the industry, driving growth, excellence, and long-term success.
However, the onus is on leaders to recognize and harness the power of agency. It’s about strategically committing to fostering a culture that not only introduces it but also supports it.
Agency: it’s not the weirdo philosophical term you think it once was. It’s one of the more essential concepts for organizations in 2023 and beyond.
_______
Pre-order my next book, publishing in November, Work-Life Bloom: How to Nurture a Team That Flourishes, (You won’t want to miss digging in.)
Read the full article here
