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Why do companies need to be more nimble? McKinsey’s Aaron De Smet and Chris Gagnon explain what’s driving organizational agility, why it matters, and what to do.

Rapidly changing business conditions are demanding more flexible organizations, say McKinsey principals Aaron De Smet, who coleads our organizational-design efforts, and Chris Gagnon, who oversees our Organizational Health Index (OHI) research. In this episode of the McKinsey Podcast, they talk with McKinsey Publishing executive editor Luke Collins about their work, explaining why agile companies outperform others, how organizations are reacting, and what leaders should do. An edited transcript of the conversation follows.