Research Shows Speed is Linked to Organizational Performance

This year has thrown a lot of curveballs, creating a very tough environment for businesses to survive, let alone thrive. Those that have successfully navigated the difficult landscape have done one thing well: adapted, and quickly. 

In a recent McKinsey & Company survey, executives and directors said their organizations were making widespread changes “to increase the speed at which they adjust strategic direction, make and implement tactical decisions, and deploy resources.” They highlighted building faster decision-making mechanisms, improving internal communication and collaboration, and increasing the use of technology as the top three opportunities to achieving these ambitious goals.

A high bar for speed

With so much economic activity moving online, what’s the bar for speed/agility when it comes to the digital side of the business? The Accelerate State of DevOps 2019 report presents research from 31,000 professionals worldwide over 6 years. The data shows that “elite performers” deploy multiple times a day, keep lead time for changes down to less than a day, take less than an hour to restore service, and maintain a 1-15% change failure rate.

Compared to the “low performers,”  that’s 208 times more frequent code deployments, 106 times faster lead time from commit to deploy, 2604 times faster time to recover from incidents, and 7 times lower change failure rate.

It’s a pretty high bar, but if you can achieve it, it pays off. 

Speed linked to organizational performance

The Accelerate report found that the highest performers were twice as likely to meet or exceed their organizational performance goals (including profitability, productivity, and customer satisfaction). 

Meanwhile, McKinsey & Company’s research shared similar findings: “Fast organizations outperform others by a wide margin on a range of outcomes, including profitability, operational resilience, organizational health, and growth.”

When asked about profitability, operational resilience, organizational health, and growth, leaders at faster organizations reported significant outperformance compared with leaders in slower organizations. 

Source: https://www.mckinsey.com/business-functions/organization/our-insights/the-need-for-speed-in-the-post-covid-19-era-and-how-to-achieve-it

Agility on the rise

Because speed is linked to organizational performance, many businesses are making it a priority and seeing real gains. In 2018, only 7% of the sample for the State of DevOps research qualified as elite performers, but in 2019 that was up to 20%.

We predict 2020 will see another big jump, especially amidst the current landscape. While many organizations were on a multi-year digital transformation path prior to the pandemic, this new world demands that businesses adapt now in order to succeed, which will accelerate the timeline for many. It’s not an easy road, but the agility gained will pay off.

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