Implementing change. Harley-Davidson has repeatedly demonstrated its capacity for ongoing change. Since the leveraged buyout, it has implemented operational restructurings, a new product development process, new management processes and personnel practices, and expansion into Europe and Asia. In 2011, for example, the company embarked on an ambitious program to develop a full-blown mass customization capability. H-D reorganized and scaled down its manufacturing footprint, streamlined R&D, marketed a wide variety of customization options through dealers and the Web, and restructured the manufacturing process to a flexible system that can produce any custom version of any bike in any plant on any day. To accomplish this, the company engaged its unionized workforce to dramatically change work rules and move from 62 job classifications to five.
By the time Rich Teerlink retired in 1999, his team had transformed Harley-Davidson from an inward-looking, marginal, command-and-control organization to an agile, dynamic market leader permeated with shared leadership and accountability. Curiosity, experimentation, and direct action are explicitly encouraged and rewarded. But it is a controlled chaos, held together by the centripetal forces of a strong identity and shared values.
The Agility Challenge
Some business environments change faster and more profoundly than others, but it is a given that yours will change. The point of transformation is to adapt, and the point of pursuing agility is to become more adaptable. Executives in agile organizations make explicit, system-wide decisions that promote adaptability over stability and flexibility over inertia. Leaders and employees see the ability to change and adapt as the key to long-term success. They do not fear or avoid change; they embrace it because their ability to manage change well is their primary advantage.
Managing agile organizations means being willing to give up the activities that make you successful today but that won’t be appropriate tomorrow—over and over again. By contrast, thrashers often increase their commitment to successful courses of action but miss important inflection points in the market. BP, for instance, continued to emphasize cost performance over process safety and compliance for years, resulting in disasters like the 2005 Texas City refinery explosion that killed 15 and the 2010 Deepwater Horizon oil rig explosion and spill. Toyota was enamored with being the biggest auto company in the world and ignored important safety issues. Outperformers are not perfect, but they make fewer mistakes and, like Exxon, when they do stumble, they are quick to see the error and have the capabilities to correct it.
Perceiving the value of constant change is only the first step. Translating that perception into productive action requires know-how, processes, infrastructure, and resources. Leaders must commit the organization to a new course of action, mobilize resources, and implement changes. Niccolò Machiavelli’s insight is as relevant today as it was in the 15th century: “Whosoever desires constant success must change his conduct with the times.”
- Thomas Williams is a senior executive advisor with Booz & Company. Based in Ridgway, Colo., he specializes in strategy, organization, and management systems for energy and industrial companies.
- Christopher G. Worley is a senior research scientist at the Center for Effective Organizations at the University of Southern California in Los Angeles. He is the coauthor, with Edward Lawler, of Management Reset: Organizing for Sustainable Effectiveness (Jossey-Bass, 2011).
- Edward E. Lawler III is the director of the Center for Effective Organizations at USC; the coauthor, with Chris Worley, of Management Reset; and the author of Talent: Making People Your Competitive Advantage (Jossey-Bass, 2008).
- Also contributing to this article was Niko Canner, former senior partner of Booz & Company; and s+b contributing editor Jim O’Toole.