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We deep dive into what is business agility and why it matters for a business in today’s modern landscape.
What do Blackberry, Speedy Video, Nokia, Myspace, or even those notorious SS15 bubble tea shops have in common?
They all failed to adapt! Some may still be operational but have experienced a significant decline from their peak. This isn’t an isolated phenomenon. Companies that fail to adapt will eventually fade away.
So it’s not a surprise that 90% of Fortune 500 companies have vanished since 1955, according to a 2015 study from the John M. Olin School of Business at Washington University. That same study estimates that 40 percent of today’s F500 companies on the S&P 500 will no longer exist in 10 years.
In today’s ever-changing and competitive business landscape, it’s essential for businesses to easily adapt to market changes, customer needs demands, and other unforeseen challenges like the COVID-19 pandemic, the Russian-Ukraine war, and the rise of artificial intelligence and automation through software like ChatGPT, in order to not only survive but also thrive.
But the key to staying afloat isn’t just about having a solid business plan or strategy—it’s about having and embodying agility, which in simple terms means being flexible and adaptive to change.
What is Business Agility?
Business agility is more than just a buzzword or a fad; it’s a set of management skills and principles for companies to survive and thrive in today’s modern business environment.
As per the Business Agility Institute, business agility is defined as:
“A set of organisational capabilities, behaviors, and ways of working that affords your business the freedom, flexibility, and resilience to achieve its purpose. No matter what the future brings.” Imagine what having the flexibility and freedom to jump on new market opportunities “yesterday” might be like.”
Business Agility Institute
With agility, companies can quickly spot new opportunities on the horizon, allowing them to adjust with lightning speed, all while not only reacting and responding to changes effectively but proactively anticipating them. It enables teams to adapt strategies, processes, and operations quickly to seize new opportunities, mitigate risks, and stay ahead of the competition.
It’s about fostering a culture of flexibility, continuous improvement, and innovation where ideas, no matter how unconventional, are nurtured. Leaders who practice business agility are transparent with their people, keeping everyone in the loop so they can navigate confidently in stormy seas.
Essentially, companies with business agility are more equipped to anticipate market shifts, changing customer needs, and new technological advancements, and thus pivot swiftly and effectively when necessary. The mistake that Blackberry, Blockbuster, Sears, Nokia, and Myspace made was not keeping up with the times, especially in this digital era.
Why is Business Agility important?
In today’s volatile, uncertain, complex, and ambiguous world, unprecedented global events like the COVID-19 pandemic, the rise of artificial intelligence and automation through software like ChatGPT, and geopolitical conflicts like the Russian-Ukraine war could change the business world in a matter of days.
Businesses with agility skills, behaviors, and practices are best positioned to respond to uncertainty and successfully adapt to the changes that happen in this world. For instance, during the COVID-19 pandemic, when global seating capacity in flights fell by around 50% for the whole of 2020, AirAsia responded by developing its digital and other non-passenger airline businesses. This included the development of its “super app”, combining 15 types of products and services under three pillars: travel, e-commerce, and fintech. However, as of January 2023, AirAsia announced that it has gone back to focusing on its “bread and butter” of travel now that COVID is officially over.
Southeast Asian startup Grab also pivoted, releasing a feature extension within its all-purpose app called Pasar on GrabMart, which was officially launched in March 2020 amidst Malaysia’s peak quarantine operations, when convenience stores, supermarts, and fresh produce markets were seen as high-risk potential infection areas. This enabled users to order daily necessities on-demand like grocery items, stationery, health and beauty products, and other goods and services within the Grab app.
Business agility is important for several reasons as summarised below:
| Competitive Advantage | Business agility enables organisations to promptly respond to emerging opportunities and threats in the market, giving them a competitive edge. |
| Customer Satisfaction | Agile organisations are obsessed with customer feedback and expectations. This ensures products and services meet the evolving needs and preferences. |
| Efficiency and Cost Reduction | Agile practices promote streamlined processes and efficient resource allocation by eliminating unnecessary bureaucracy and reducing time-to-market. This optimses operations and minimises costs. |
Related: Read our article on how agile coach solves the issue of waste in organisations
Benefits of Agility to your Organisation
Business agility is integral to the success of any modern company, with its benefits extending beyond customer service to virtually every aspect of the business environment. According to Business Agility Institute’s 2023 Business Agility Report, continued investment in business agility over the last five years has resulted in growing returns for companies. Sixty-three percent of companies that reported an increase in business agility also saw an average overall improvement of 27%.
The most frequent benefits of Business Agility Ways of Working include:
| Faster Adaptation to Market Trends | Agile businesses can promptly identify these shifts and adapt their strategies, products, and services accordingly, enabling them to stay ahead of the curve. |
| Enhanced Customer Satisfaction | Agile organisations are obsessed with their customers. They promptly respond to customer feedback, aligning products and services with customer expectations. This fosters higher satisfaction and loyalty, driving business growth. |
| Increased Operational Efficiency | In agile organisations, red tape is nonexistent. Streamlined processes eliminate unnecessary bureaucracy and optimise resource allocation, enhancing operational efficiency and enabling faster decision-making and execution. This reduces the time-to-market for new initiatives. |
Related: Crafting a Successful Digital Transformation Strategy for Your Business
Challenges to adopting and sustaining Agility in Business
According to the 2023 Business Agility Report, the top two industry-wide challenges continue to be in the area of leadership and change leadership. Other issues such as unsuitable organisational structures, practices and processes, and mindset and culture are also challenging for organisations.
In our experience at Ekipa – any sustainable change of a business requires focused leadership and personal discipline to sustain the continuing evolution of the organisation.
Principles to Implementing Business Agility in the Workplace
We reference business agility coach and Sooner Safer Happier author Jonathan Smart in our simple five-step guide. In his book, Jon explains how businesses can change their ways of working by adopting Agile to deliver better value, sooner, safer, and happier.
Here’s our simplified five-step guide based on his book:
1. Leaders go first
Leaders (at all levels) lead. The origins of the word ‘lead’ are ‘to guide on a journey’. That means going on the same journey. Leaders is not ‘them’. Leader is you. Everyone is, or can be, a leader. #BVSSH pic.twitter.com/OCMC0MOHpR
— Jonathan Smart (@jonsmart) March 22, 2021
According to Jon, for businesses to change their ways of working, the change must first come from the top. Jon says, “Leadership behaviour will make it or break it” and that leaders must act as “servant leaders” to support and remove impediments from teams while showing the way. Change, as he puts it, is a social activity, and it hinges on how people are inspired, empowered, and aligned to a shared purpose with autonomy and agency. Thus, leaders must act as role models, and exhibit courage and vulnerability to their teams. Managers who sit back with their arms crossed and demand that everyone, but them, change, will create cognitive dissonance because changes that happen at the grassroots, according to Jon, will quickly hit a “grass ceiling.”
2. Invite over inflict
Popularised by Everett Rogers, the Innovation Curve of Adoption (above image) classifies the entry of users into various categories, based on their willingness to accept a new idea or technology. Jon uses this model to explain how adoption occurs in organisations—first by innovators, followed by early, and then late adopters, and lastly, laggards who are usually waiting to pivot due to not wanting to be the odd ones out. He emphasises the importance of “inviting over inflicting” which encourages participation without mandating a one-size fits all approach. Also, when people understand “What’s In It for Them,” they are more likely to respond to the change.
3. Focus on delivering value and do so by building the right things
In traditional project management, the approach often focuses on delivering projects on time and within a set budget rather than ensuring that the right products or solutions are being developed to meet customer needs. Jon emphasises the importance of shifting the focus from output to outcome and doing this by building the right things and prioritising delivering value to customers, continuously and quickly, adapting the approach based on customer needs, feedback, and iteration on product development to ensure that the result provides maximum value to users.
4. Build Agile Capabilities within the Team
In his book, Jon stresses the necessity of cultivating agile capabilities within organisations through a holistic transformation that encompasses cultural, structural, and process changes. This involves fostering a collaborative culture that encourages experimentation and continuous learning, empowering cross-functional teams to take ownership of delivering outcomes and adopting agile practices such as iterative development and prioritisation based on customer feedback, regular reflection, and improvement. Leadership support is vital in championing Agile transformation and creating a safe environment for teams to innovate and learn (back to point 1). Start with small pilot teams to demonstrate the benefits of agility. Scaling agile across a company hinges on the outcome of the smaller pilot teams.
5. Focus on outcomes
Traditional business metrics that focus solely on output, such as the number of tasks completed or features delivered, may not accurately reflect the success of an Agile transformation. Instead, Jon advocates for outcome-driven metrics that align with organisational goals and customer value, such as customer satisfaction, time to market, and business impact. It’s by measuring progress using relevant and meaningful metrics via methods like Objectives and Key Results (OKRs), that organisations can gain insights into the effectiveness of their Agile transformation and practices, identify areas for improvement, and ensure they are delivering value to customers in a timely and efficient manner.
Related: Understanding Objective and Key Results (OKRs) and The Benefits for Your Company
6. Go slower to go faster or you will end up going slower
Lastly, the authors of BVSSH stress the importance of taking the time to build strong foundations in an organisation’s Agile journey, and establish effective practices before accelerating delivery. He explains that it requires monumental resilience to deliver continuous improvement across an organisation while acknowledging that impediments are not in the path, but are the path. By viewing impediments as opportunities rather than roadblocks, organisations can cultivate a mindset of resilience and adaptability, ultimately strengthening their Agile practices and capabilities.
Ready to Embrace Business Agility?
In today’s ever-changing business environment, standing still is no longer an option. Companies that fail to embrace Agility in their businesses risk being left behind or even disappearing altogether in today’s increasingly competitive landscape.
If you’re ready to ensure your company’s survival and unlock its full potential, consider enrolling in our Business Agility Foundations training course to gain a foundational understanding of business agility principles, learn practical implementation strategies, and empower your team to thrive amidst the turbulence of today’s business world.
Sign up here to begin your journey toward greater agility, innovation, and success!
