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A new report has shown how an agile transformation of the operating model can benefit companies. According to the study, half of companies that have completed an operational transformation have increased their market share because they are better able to outmaneuver their competitors to capitalize on change.

While companies in the past favored stability as a success factor, the modern world of digital disruption, economic uncertainty and rapidly changing change means that this is no longer a practical basis from which to operate. Instead, companies are increasingly looking to transform their operating models to drive agility and quickly adapt to evolving trends in their market.

According to a new study by consulting firm Gate One, around 87% of senior executives have been involved in transforming their organization’s operating model over the past three years. In a conversation with 300 senior decision-makers at large UK companies, the researchers found that the agility of the organization was one of the main drivers behind these transformations. 57% of respondents cited the need to respond to market conditions and improve the customer experience as the greatest benefit of their operating model transformations.

“Organizational agility is critical to success in today’s rapidly changing world,” commented James Cooper, Client Director at Gate One. “Technology and data are changing every element of business. Customers are becoming more and more demanding and want more choice, more convenience, more value and more control. In the meantime, major world events from pandemics to trade wars to Brexit are destroying the notion of economic stability. Organizations need to be ready to challenge and transform their operating models to adapt to new and emerging realities. “

The agility that companies have enjoyed through their business transformation is manifested in a number of ways. For example, while 60% of companies said they had increased operational efficiency, another 54% said it helped them develop products and innovations faster, while this agility helped 47% gain market share.

In addition to being successful in markets they were already in, 44% said organizational agility helped them expand into new markets. The financial impact of this growth was that around 42% of the transformations had resulted in revenue growth, while just under a third had increased profits and a quarter had reduced operating costs.

Unfortunately, a successful transformation is easier said than done. There is still a litany of obstacles between companies and agile operations. The biggest problem is that many companies struggle to move beyond a “silo mentality”.

Almost half of Gate One respondents said the idea that departments and teams only prioritize their segment’s goals and not the entire company led to a lack of collaboration. Meanwhile, another 40% said the scope is changing rapidly, and around a third named lack of staff skills, poor quality external resources and cultural resistance as the main barriers, highlighting the importance of change management.

According to the researchers, organizations are often poorly equipped to carry out the transformation work for operating models themselves. This means that outside help and a new pair of eyes are essential to understanding the best ways to think about and achieve the transformation. External consultants can demonstrate the benefits of thinking more holistically about an organization, which can serve as an effective remedy against the goofy thinking of executive directors who often struggle to achieve this when looking at the organization outside the confines of their own department.