Business Agility in a Nutshell
Business Agility is a complex and multi-faceted domain with no simple or easy answers. It is somewhat ironic then, that we present a simple FAQ on the topic. Therefore, please consider these answers a starting point for your journey. Where possible, we’ve provided links to go deeper into each topic. Without further ado…
What is business agility?
Business agility is a set of cultural and behavioral characteristics that span all aspects and interactions of an organizational system. It refers to the capabilities and willingness with which an entire organization is instinctively able to seize emerging and unforeseen opportunities for its customer’s benefit.
Business agility is not defined through standard practices, but rather principles. An actively engaged and aligned workforce; empowering management; unified business processes, policies, and functions; a culture of respect, trust, and autonomy; and an overriding focus on creating positive customer experiences to meet their real needs. The intention of which is to find ways to create an organization best able to fulfill its purpose, no matter what the future brings.
What are the benefits of business agility
We know from our research that business agility, while complex and difficult, bring measurable benefits. Market success is the #1 reported benefit. Yes, agile organizations make more money. « Our revenue is increasing », « our early delivery to market was effective to be a market leader » « revenue and customer KPIs have been improving ». These are some of the quotes we have from our studies.
Customer satisfaction is the next highest reported benefit. And we know, from other studies, that customer satisfaction leads to loyal customers and repeat business.
The next highest reported benefit is employee satisfaction. We know that improved employee satisfaction leads to increased retention, but to be honest, given how much time we spend working, I would also argue that companies have a moral obligation to make work one of the best parts of people’s lives. Work, no matter the job, should bring a sense of purpose and ownership. Anything less is a waste of human potential.
It’s not an easy journey – but it’s a worthwhile one.
What are the Domains of Business Agility?
Achieving business agility is not simple. There is no silver bullet or single framework, method, or system that can implement business agility – and, by definition, because an organization is a complex adaptive system, there can never be one. Yet, while no two organizations follow the same journey, common patterns emerge.
Therefore, in 2017, the Business Agility Institute began work to clarify what it means to be an agile organization, regardless of industry, size, or context. Out of this research came the Domains of Business Agility, a model consisting of 13 domains grouped into 4 key areas; Relationships (incorporating Customer at the heart of the model), Leadership, Operations, and Individuals. Each domain is a fundamental characteristic of an agile organization and is equally important, necessary, and interrelated to each other. External to the model is how to express these characteristics; as that is unique to each organization and draws upon innumerable frameworks, practices, behaviors, and systems.
Why drives an organization towards business agility?
While every organization will have different goals as they begin their business agility journey, the overarching intention is to be better. And in today’s society, we need better organizations.
This means being better for customers through an overriding focus on meeting their real needs and creating positive experiences.
Being better for employees through a foundation of respect, trust, and autonomy enabling them to work towards customer outcomes without coercion.
Being better for shareholders by creating a sustainable organization that can thrive in unpredictable markets.
And, being better for the society they operate in by acting in good faith and contributing to a greater good.
Why is customer-centricity or customer-obsession so important?
There are many characteristics of Business Agility as documented in the Domains of Business Agility model. Yet, the central characteristic of an agile organization is customer-centricity – even going as far as customer-obsession. Ultimately, serving their customer is an organization’s core purpose and why they are in business.
This is more important now than ever before. The world is in a constant state of change and, with those changes, emerge new opportunities to delight your customers. Yet, this is only possible for those organizations with the flexibility to seize these opportunities and create a bold new world that their customers may have not even thought was possible.
The Context of Business Agility
How do agile frameworks and practices relate to business agility?
There is a significant overlap between agile and business agility, but the two are not synonymous. The agile values and principles as documented in the agile manifesto are just as relevant for the entire organization as they are for software teams. Likewise, agile practices and frameworks, like Scrum or Kanban, can apply to many different areas of the organization (e.g. marketing).
There are also many factors that do not cross over. Agile practices that exist solely for technical teams (e.g. pair programming) and business agility concepts that do not exist in any agile framework (e.g. adaptive funding models).
Is agile outside IT the same as business agility
Business agility is much more than Agile outside of IT. When first exploring business agility, many organizations start by taking the values, principles, practices, and frameworks from agile and applying them to the broader business. However, this isn’t business agility – if I were to give this a name, I would call it Agile Business. While the heritage is clear, business agility is a systemic adoption of agility that spans all aspects and interactions of an organization.
How does business agility relate to other new business models such as responsive organizations, teal organizations, or servant leadership?
For as long as people have had ideas, there have been new systems and frameworks for companies. Given the broad nature of business agility, it naturally encompasses many new ways of working, thinking, and being. For example, a teal organization naturally expresses many characteristics of business agility. Although an agile organization is not automatically a teal organization.
It is best to look at business agility as a series of characteristics and values. Any framework, system, or model that encompasses those characteristics can be considered to have business agility.
Is there a Business Agility framework?
As should be evident by this point, there’s no single framework for business agility, nor can there ever be. A company is a complex adaptive system made up of a complex interplay of people, processes, tools, systems, measures, and customers, which, by definition, means that all organizations are unique. A process, on the other hand, is simple (or at best complicated). You can define it, document it, and copy it. This allows for the creation and sharing of repeatable and replicable processes. So, while many frameworks can help you achieve business agility, there is no business agility framework.
The Business Agility Journey
Why do business agilists refer to their development as a journey rather than a transformation?
The metaphor of a “transformation” implies a change of state. The challenge with this metaphor is that there is an implicit end state; from a caterpillar to a butterfly. In the case of organizational change, as long as the market continues the change, companies must change alongside it. Using the metaphor of a journey helps leaders understand that this isn’t a simple state change, but a long, complicated, and often circuitous undertaking for the entire organization – and one which doesn’t have a clear end in sight.
How do I get started in business agility? How do I run a transformation?
Achieving business agility is not simple. There is no silver bullet or single framework, method, or system that can implement business agility – and, by definition, because an organization is a complex adaptive system, there can never be one.
Unlike a single process, which is a simple or complicated domain that you can track, document, and replicate, a company is a complex adaptive system. This means that the interplay of people, processes, tools, systems, measurements, and 1000 other factors is fundamentally unique. This means that your transformation must, likewise, be unique to your organization. Yet, while no two organizations follow the same journey, common patterns emerge.
Refer to the Domains of Business Agility to understand these characteristics and help identify the initial constraints in your organization. This is where you need to start – and it is unique to your organization.
How long does an agile journey take? When is an agile transformation done?
It might sound trite, but there is no end to a business agility journey. Business agility is a continuum, where the question is not whether you have it, but rather how much you have, and is it enough.
The need to experiment, innovate, and adapt to changing market and customer expectations will always be necessary. However, that doesn’t mean that an organization needs to invest in external consultants and coaches forever. The goal of any organization is to reach the point where the agile journey becomes self-propagating and integral to the organization’s culture.
How do I know when my organization is truly agile?
Each of the Domains of Business Agility details a series of maturity characteristics. Organizations that rate highly across most, or all, of the domains are considered mature agile organizations. Access the Business Agility survey to take a short self-assessment: https://agilityhealthradar.com/business-agility-survey/
Challenges to Business Agility
What is the biggest challenge to successful business agility?
Looking at business agility transformation failure rates, we can confidently state that there are clear ways NOT to run a transformation. Most egregious, imposing a new set of values and practices via a transformation on an unwilling or unprepared workforce which is at best ineffective and at worst unethical. Prima facie, by treating an organizational level change as a series of imposed process level changes, leaders get a simpler and more “predictable” result. It doesn’t work.
Once a company has decided to begin a journey towards business agility, the leadership team must commit and maintain a process of complete transparency. This includes disclosing the intentions of agile teams, their final objectives, the processes they will take to reach those objectives, and any figures relevant to the business in question.
As a rollout of agile values and practices continues, management should invite participation from the workforce. There are many strategies a management team can implement to win the hearts and minds of employees, many of which revolve around core principles of fostering understanding and conviction, reinforcing change through formal mechanisms, developing talent and skills, and modeling the new roles. If management engages in these processes genuinely and openly, they will retain the trust and commitment of their workforce throughout the agile transformation. If not, they will alienate their employees and deepen the chasm between management and the workforce.
What can inhibit business agility in organizations?
As a research organization, we spend a lot of time trying to understand this question. While there are many elements, the most common are;
- Leadership styles (including buy-in and sponsorship). « Our senior leadership lacks the understanding that it takes more than just tech teams ‘doing’ agile ». We know that leaders set the tone for the entire organization – and if that’s not agile – you’re going to have a problem.
- Change management. And I don’t (just) mean formal change management and communication, but also micro-change. Conversations of change and helping individuals become the best possible version of themselves. Documenting a process and creating a few pretty videos aren’t enough.
- Culture and mindset. « We have a risk-averse culture which naturally forms silos and layers of bureaucracy ». I think most companies would say something similar. Culture is an expression of all the elements of the organization. So you can’t focus on one thing – you have to impact everything.
It may be a hard journey, but it’s a worthwhile one.
By Evan Leybourn, CEO Business Agility Institue