Giants can dance: Agile organizations in asset-heavy industries – McKinsey & Co.

The agile revolution is sweeping across industries, and asset-heavy companies are taking note. We explore how and where they can capture the benefits of agility while preserving safety and assurance.

Agility is neither a new concept nor one exclusive to tech industries. Lockheed Martin, for example, established its “skunkworks” teams back in 1943 to drive a radically new approach to the development and manufacture of aircraft. Engineers, technicians, and aviators were brought together in a shed in the California desert, united by clarity of purpose and empowered to get stuff done. And they did, designing and building the XP-80, the first jet fighter in the United States Army Air Forces, from a standing start to a flying production model in just 143 days.1

Yet asset-heavy industries have largely held back from the ongoing agile revolution: sectors such as energy, chemicals, metals, and mining are still at an early pilot stage when many other industries are already implementing agile operating models at scale. This lack of movement is not for lack of potential, because many of the pilots suggest substantial benefits. The reluctance to scale agile stems instead from the fear of compromising safety, technical quality, and the management of risk. Organizations are right to be cautious. A coding error at a software company may raise costs or delay development, but the thought of an oil spill or a mine collapse should lead any sensible leader to think twice about profound operating-model innovations.

Still, it’s time to take a fresh look. Agile is no longer an unproven concept. Done right, it could reduce risk and improve decision making. Some asset-heavy companies have taken the first steps to expand beyond agile pilots and are organizing for agility across entire mines, oil fields, refineries, and production lines.

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By Maria Ordonez
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