What is Business Agility?
Business agility applies the principles of agile development to the entire organization. This allows companies to be more responsive to change, hasten the time to market, and reduce costs without sacrificing quality.
Agile development utilizes short development cycles and minimal overhead to facilitate rapid iteration and frequent improvements for products. While agile principles deal with short-term strategy, true business agility extends this mindset across the entire organization. This requires a holistic commitment that begins with and is reinforced by the executive team to permeate the entire organization.
What’s the Role of Customer-Centricity in Business Agility?
Customer centricity is at the heart of business agility—meaning listening to, empathizing with, and serving the needs of customers as quickly as possible. This way, businesses are doing right by their clients and making themselves more attractive to prospects. Agile businesses are quick to recognize their shortcomings and mistakes before looking to rectify the situation and create superior user experiences.
Benefits of business agility
- Challenge management. Organizations adopting business agility can easily react and respond to opportunities and threats in the marketplace while remaining customer-centric. Freed of long-term plans and strategies, these organizations can adapt to situations much faster than their more bureaucratic counterparts.
- Competitive advantage. Agile businesses can seize upon short-term opportunities, giving them the ability to be a first mover. They can learn from their mistakes and setbacks, readjust trajectories quickly and not remain committed to their plans. And they can confidently react proactively to keep pace with (or outpace) the competition.
- Cross-functional collaboration. Business agility can also break down organizational silos and foster creativity and innovative problem-solving thanks to the cross-pollination of ideas and supportive environment. But decentralized decision making comes with its own share of drawbacks.
Risks of business agility
- Short-term solutions. Agility sometimes sacrifices long-term competitiveness. This can create disadvantages versus organizations that have invested in new technologies and strategies that require a longer development cycle. If an organization is solely in read-and-react mode, it’s difficult to define, build, and bring to market completely new solutions.
- Lack of innovation. There is a high risk of different parts of the organization reinventing the wheel, duplicating efforts or creating conflicting versus complementary solutions. The larger the organization, the harder it is to effectively implement business agility at scale.
Agile vs agile in the enterprise
Many organizations think they’re “agile” just because they are employing agile methodologies and practices in their product development teams. And while it’s true that this does enable organizations to be more reactive, it typically only applies to the near-term horizon.
Each individual product release may be governed by agile principles, but the top-down decision making informing the overall strategy doesn’t benefit from the full potential agility has to offer. To deploy agile across the enterprise, it requires a much larger commitment and fundamental changes to how an organization is structured and operates.
Business agility requires fluidity in roles and responsibilities as resources are deployed tactically to address immediate needs and opportunities. Uncertainty and malleability are not always welcome in larger enterprise environments where there is an expectation of continuity and stability.
Adopting Agile in the Enterprise
Self-organizing teams are a common attribute of agile businesses. When a problem, situation or opportunity arises, interested parties with relevant skill sets can quickly assemble and address the challenge. But for an organization to support this spontaneity, a stable structure must underpin the rapid reactions happening on the surface, including:
- Processes and governance to properly vet decisions and build consensus
- Infrastructure to support the underlying platform and staff taking fast action
- Continued support of legacy products, ongoing engagements and existing customers
Relinquishing control and delegating decision making does not come easily to many executives. Finding the balance between independence and oversight can be an ongoing challenge. Those at the top of the pyramid may not be happy that the org chart is getting scuttled and less-seasoned employees are empowered to make important decisions.
Business agility’s success is predicated on it permeating the organization, including everything from budgeting to human resources. And as more and more business models shift to a service/rental model versus a one-time purchase, the need to quickly address customer satisfaction issues is amplified when customers can cancel and therefore impact a company’s revenue and reputation.
Product management’s role in business agility
Product management has an important role in collecting, synthesizing and socializing information. From customer feedback and market data to release details and roadmaps, product management possesses data that is essential for empowering autonomy. This allows the other parts of the organization to make informed decisions and comprehend their potential impact and overall strategy.
If self-organizing teams are entrusted with making plans, they must be aware that information exists. They need to have ready access to both the data and product management’s subject matter expertise. Product managers can serve as both consultants—answering questions and providing insights and recommendations—as well as facilitators that can map out feasible execution strategies.
Within product management, speed is often a double-edged sword. While product managers want to react quickly to customer feedback and market developments, bringing the wrong features and products to market quickly isn’t doing the company any favors. Product managers must maintain and propagate the importance of proper research, experimentation, and validation before kicking off actual product development.
While this might seem counterintuitive, product teams have a limited number of bullets. They want to be sure they’re aiming for the right thing before they fire. Tying agile decisions back to measurable outcomes is always a good bet.
Product management can also spearhead the organizational understanding that it’s OK to be wrong, as long as you can figure that out quickly. While executives love data, they don’t always embrace the experimental environment that yields definitive inflection points to power decision making.
By embracing agile principles before product development (such as concept definition and prioritization) and post-release (from sales and marketing to operations and customer service), product managers can help push agile practices beyond the realm of backlogs and sprints.
Ego, fear, and overconfidence are some of the barriers to adopting business agility. It’s a paradigm shift that’s uncomfortable for some employees at every level of the organization.
But for organizations to survive and thrive in today’s business environment, maintaining a rigid, command-and-control management style is seldom a recipe for long-term success.
Some companies dive into the deep end of business agility. Others are able to slowly implement some of its features while still retaining more traditional business practices in other areas. Even partial progress still puts a business on better footing when it comes to reacting to shifting landscapes and emerging technologies.
For companies resistant to making the shift, even self-awareness of where the organization is more rigid and less able to react is beneficial. Knowing those particular limitations can put a stronger emphasis on scouting ahead for difficult changes. Business agility is not trivial; but ignoring its benefits could prove fatal for companies sticking to the old ways of doing business.