Even long-standing enterprises are not cushioned from threats coming from the external environment. The ways of doing business are changing faster than ever before. Disruptive innovation is the buzzword and business leaders are always worrying about where the next wave will change the face of an industry. After all, who knew that smartphones will alter the photography industry and eCommerce will change the face of retail.
A survey conducted by PricewaterhouseCoopers stated that 60% of the CXOs felt that their industry had been reshaped and 75% of them expected disruptions in their market by 2022.
Organizations are waking up to the fact that traditional management practices are no longer sufficient to meet the challenges of today. The businesses that are thriving in this environment have only one thing in common – the ability to adapt, both internally as well as externally.
For organizations to continue delivering value to their customers in this changing landscape, they must think about Business Agility. Let’s uncover this concept and understand why.
What is Business Agility?
Business agility sums up the capabilities that a company requires to stay competitive and relevant in today’s marketplace. It can be defined as –
An organization’s competence to adapt & respond to changes in the market landscape whether internal or external, surpass the competition by transforming into a learning organization. If these changes can be achieved by an organization in a productive & cost-effective manner without implicating the quality of product or service, then they can successfully overcome any challenge that competition brings about.
The concept of business agility has evolved from the Manifesto for Agile Software Development that first originated in 2001. It brought in the concept of Agile that has come in three waves –
The team level – When the concept of Agile began, it was implemented only at the development team level. Agile demonstrated massive results in team productivity & deliveries even amidst complex changing requirements and uncertainties.
The IT delivery level – The second wave began when organizations were able to scale agile and lean development practices to multiple teams. Continuous delivery and DevOps brought in aspects of cultural change, reduced cycle times and automation into the equation.
The organizational level – Business Agility is the third and the latest wave that enterprises are looking at to amplify the benefits of speed, responsiveness and adaptability to the entire organization.
Organizational capabilities for Business Agility
At the crux of a business agility framework lies the concept of innovation. While Scrum and SAFe are important, business agility goes far beyond to make organizations capable of responding to disruptions in the market. It is the people and culture that ultimately drive change and not processes.
Engaging the right people at the right time and in the right way is key. To integrate innovation and change in people & culture, the first step is to lay down a compelling vision, strategy which is clearly defined and all employees are aware of it.
Let’s explore a Business Agility model for organizations comprising four capabilities.
Organizations can choose to develop one or more of them independently. Keep in mind that transformative results only come when you invest in all four. Once you do so, the impact of the result of the whole is far greater than the sum of each of these components.
Challenges that organizations face on their journey
According to the 2019 Business Agility Report, organizations have mostly said that their maturity in business agility is relatively low although they have high hopes and enthusiasm for the future.
They have been inspired by other organizations with a higher extent of maturity. They have displayed the below benefits.
- Higher revenue, market share & brand value
- Faster releases, turnaround times and better product offerings
- Higher customer engagement
- Greater transparency within the organization and increased employee satisfaction
The 2019 Business Agility Report also asked organizations about which challenges were they facing on their journey. They described the top most challenges as Leadership Style, Change Management, and culture.
Traditional drivers for success factors in business used to be scale & efficiency. Business leaders would mostly focus on coordination, control and planning. However, the dynamics of business success have changed over time. Today it is more about innovation, continuous learning, and adaptability. However, often top leadership continues to use outdated leadership styles which are only appropriate for legacy cultures and not for modern times.
As such people and culture are the most difficult to change, hence keeping this in mind, top leadership and management need to be motivated throughout to orient the organization towards an agile mindset driven by the vision and goals laid down at the beginning of the business agility journey.
Organizations highlighted change management as the next big obstacle to achieving business agility. There’s a lot of inertia that organizations face when it comes to moving away from the traditional ways of working and this problem escalates because of a lack of understanding & experience in this area.
A lot of times the leadership gets lost as they are unable to map out the change management principles to the real-life scenario of instilling the new cultural practices. Organizations also struggle with a lack of clarity and proper communication to the rest of the organization. Without a proper roadmap, employees often feel disconnected with the change and feel like it is being forced on them.
Cultural Change is the next big obstacle in this path as per the report. People are often the most difficult to change and hence, this factor comes into play even here. The leadership needs to make a conscious effort in bringing about the cultural change, else the old patterns will hamper transformation and there will be no change in business results.
Business leaders have to remember that cultural change require diligent effort and can be instilled not by theory, but by example. They have to be committed throughout the transition and stay open to communicating and supporting others during the process.
Instituting the Agile Mindset
The definition of an agile mindset has been unclear for years since the concept took shape in software development. Now it has percolated to all aspects of an organization. Today, the agile mindset is recognized by some factors like innovation and focus on customer value, self-organizing teams with collaboration and respect, a mindset of constant learning & scope for improvement. This is a far cry from a bureaucratic approach where people are organized with rules and criteria and the focus is on increasing revenue rather than innovation.
The research found that the transition in the mindset from the traditional one to an agile approach was one of the most difficult ones. As the agile mindset forms the cornerstone for business agility, it is quite important for leadership to not falter back to the traditional styles of management, especially when the going gets tough and there’s pressure from market conditions.
It is strongly recommended that to develop an agile mindset, leaders must go beyond classroom training and prepare a model for mentoring and coaching at all levels of the organization. As this is a shift in the culture and the mindset with which everyone in the company approaches their work, mere classroom training will not suffice.
Our Business Agility Transformation solution
Looking at the above challenges, it’s quite evident that an agile transformation is not an easy task and taking the help of seasoned professionals in this regard will help you step into the unknown. Here’s where Knoldus can come into play.
Knoldus is helping organizations build agile capabilities and integrate agile concepts, frameworks, and learnings into people, processes and operations. We guide the organization’s leadership at every step of their transformational journey with our 3-phase model.
DevOps – The practice of DevOps at Knoldus helps our partners transcend silos to reduce implementation time, increase productivity, save costs and increase the rate of success of the digital transformation.
Agile Transformation – Our agile transformation practices activate a rapid feedback loop between the decision-makers and developers. We develop a robust roadmap for you so that you can go agile at the team, departmental & organizational level.
Digital Transformation – We have helped some of the world-class organizations innovate and enable digital transformation with a laser-sharp focus on customer experience and innovation in business models.
With our experienced Agile experts, we implement Lean principles for our partners to fast track innovation, expedite digital delivery, and respond quickly to changing industry environments.