Global management consulting firm Hay Group has identified eight characteristics of organisational agility that are essential for the financial services industry's battle against market volatility.
The annual Focus report released by the group has provided insights into how Australian organisations can combat the challenges presented by volatility and capitalise on the opportunities that result from shifts in the market.
"It's particularly relevant to financial services because of the structural change in the industry with the 'new normal', which means a new way of operating," Hay Group consulting manager Victoria Ben Haste told InvestorDaily.
"It's a very large and complex industry with a lot of legacy in their businesses so organisations in the sector have some work to do in terms of ensuring they are agile to respond effectively in these volatile times, but they are not a laggard by any means."
Organisational agility was the ability of a business to accurately read and quickly respond to changes in the market, where more agile organisations are better placed than their peers to make decisions, reinvent their models and redeploy its efforts to the needs of the market, the report said.
The eight characteristics which underpinned successful businesses in the new market challenges were market intelligence, enterprise-wise perspective, decision making, leadership, performance focus, flexible reward, simplicity and culture.
Mr Haste said the Hay Group's discussions with its financial services clients were much more around performance, simplicity and reward.
"The performance focus is getting a more performance based-culture, having flexibility around performance management and measures of performance," he said.
"Simplifying from the customers' perspective makes it easier for them to do business with organisations in the sector, rather than just taking cost out."
He said decreasing costs by growing the high-level staff of the organisation, but cutting out too many people from the bottom, was not the right approach and resulted in missed opportunities.
Financial services businesses also need to think less about the quantum of reward and more around the appropriateness and responsiveness of performance measures, he said.
