Business Agility: Nice-to-Have or Matter of Survival?
Key Takeaways:
- The many benefits of organizational agility are no longer questioned. As a matter of fact, more and more businesses and organizations worldwide are considering or embracing it.
- As a result, what used to be a desirable plus is increasingly becoming essential to compete effectively.
- However, most organizations are still experimenting with agility. Very few have successfully elevated it to a core strategic driver. And this is precisely where the potential for differentiation lies.
For a few years now, the concept of Agility has been on everyone’s lips and minds. 81% of respondents to a 2019 KPMG survey had started their agile transformation within the last 3 years. Accordingly, business leaders now have greater knowledge and understanding of the results of agile transformation initiatives. With the benefit of hindsight, we can look back on the outcomes of agile transformations in a bid to assess effectiveness and impact on long term value creation and strategic success.
The Expected Benefits of Organizational Agility
The new focus on organizational agility as a management best practice stems from the dramatic acceleration of markets and technology over recent times. To avoid being blindsided by the pace of change, organizations have felt compelled to move faster than their environment. Speedier decision-making, timelier execution, and faster adaptation just so happen to be the business benefits most commonly associated with organizational agility.
More specifically, agility as a management philosophy entails embracing:
- Experimentation and iteration to dynamically adjust to market changes and value drivers;
- Proactive management of the activity based on real-time analysis and forecast of business conditions.
Agility advocates argue that a successful agile transformation will provide:
- Productivity boosts, with a reduction in turnaround time and project cycle time, and faster response to new opportunities.
- Optimal resource allocation and utilization, with the ability to perform real-time adjustments to adapt to complex market conditions and disruption.
- Improved collaboration and teamwork, driving greater operational efficiency across departments and units while improving employee experience and engagement (with positive impact on staff turnover).
- Improved customer experience thanks to shorter time-to-market and increased focus on quality, user experience, and customers’ changing needs.
- Increased flexibility and resilience thanks to timelier decision-making and team empowerment.
Agility as a Competitive Imperative
Against the backdrop of extreme economic uncertainty and market volatility, it can be argued that the benefits listed above are actual business imperatives rather than nice-to-haves. Which is perhaps the reason why everyone aspires to become agile — from tech startups to established corporations in more traditional industries. Over 80% of respondents to a Business Agility Institute survey declared that the COVID pandemic led to the acceleration of their journey towards business agility.
So much so that what was once seen as a competitive differentiator is gradually evolving into a vital requirement. When everyone else around is agile or becoming agile, investing in business agility is no longer an opportunity to outrun market rivals, but rather a necessity in order to keep up.
Unless you find a way to become more agile than your peers.
Agility: A Journey, Not a Destination
While a majority of organizations have engaged in agile transformation journeys, few can claim to have achieved their goals fully. In fact, only 27% of organizations have high business agility maturity. Agility scores vary across geographies (with APAC and Europe in the lead), industries (with Consulting, IT, and Manufacturing ahead), and organization size (with higher maturity in mid-large sized organizations).
Among the impediments to organizational agility is the issue of scaling. Many companies started by applying agility at the scale of their IT department or tested it on pilot projects and are now struggling to generalize it to the whole organization. Barriers typically include resistance to change, legacy architectures with silos and rigid mechanisms, and cultural friction.
The ultimate goal should be to make organizational agility a core strategic tenet — rather than an enabler of the broader strategy. In order for the business to be truly agile, resilience and adaptability should permeate every aspect of the organization and operations. This is about a change in mindset that’ll impact the way the company plans, executes, thinks and acts.
This superior stage of agility is rarely observed these days. This is what you should be aiming for in order to turn business agility into a competitive advantage and differentiator for your company.
