An Introduction to Agile Business

Have you ever wondered how companies like Google, Facebook, Apple and Twitter reached their current status in just few years? How these companies manage to remain at the forefront of competition? What about them makes them stand apart from the rest? And why is it that they emerge out successfully amidst uncertainty and rapidly changing external environment?

The answer to all the above questions is – these are agile businesses. They respond effectively and quickly to the changes. They exhibit flexibility. They adapt swiftly without losing momentum. They don’t hesitate in deviating from the proven methods of doing things. Rather they do what a situation demands them to.

There was a time when financial competence of an organization was sufficient to obtain competitive advantage. In fact, it swamped all other organizational attributes and was considered the single most important resource to survive, sustain and grow. However, that was a decade ago.

New age businesses proved that change was long due and financial competence is just one aspect. And organizations needed to break away from the assumption of achieving sustainable competitive advantage merely on the basis of financial competence. They need to develop agility and make it a part of their day-to-day operations.

Business Agility

But what does agility mean? And how can they achieve it ? Business agility refers to the ability of an organization to respond rapidly to the market changes as a matter of routine. It’s an ongoing process of understanding and responding to external and internal changes. Agility is about achieving fluidity so much so that a business can deal with crisis at any time, without losing the momentum. It’s about obtaining sustainability every now and then.

Agility has been around for decades. Previously, it referred to nimbleness in IT development. But over the years, it developed into a full-fledged concept, which means achieving nimbleness and flexibility in all business processes and functions as a matter of daily routine.

What is an Agile Business ?                                               

An agile business is the one that:

  • has cultivated the capability of responding to changing circumstances
  • in an effective, sustainable and timely manner
  • on a continuous basis
  • without deviating from its core mission and vision

An agile business exhibits following characteristics:

  1. Adaptability

Ability to adapt to the circumstances, and that too quickly, is one of the most essential attributes of an agile business. Not only is this displayed by the top management but it has to be an organization-wide scenario. Adaptability is not restricted to its literal meaning; rather it extends to simultaneous planning and execution. To expedite the process, organizations must get rid of sequential planning which is time consuming and rigid. When you plan and execute simultaneously, you fail fast and know what works and what doesn’t in a shorter time period. It encourages correction, adjustments or modifications along the way.

  1. Change Management

Change management has been the talk of the business town for several years. Literally, it’s an approach to transition an organization and its resources to a desired state in future. In a broader sense, it’s about predicting changes in the business environment, building strategy to manage change, making necessary arrangements to foster change at an organization-wide level and training employees helping them upgrade their skills to work in a changed environment.

However, previously change management was not an ongoing process. But in today’s scenario, organizations need to devise effective and ongoing education and training to develop ‘dynamic capability’ among employees, to

  1. Sense opportunities and threats
  2. Predict change on their own
  3. Come up with new ideas to deal with instability in business environment
  4. Solve problems
  5. Innovate
  6. Infrastructure Elasticity

Infrastructure elasticity refers to the ability of the existing system to bear additional workload when needed. The term, more often, is used to explain the flexibility and ability of hardware resources. However, in this context elasticity means the ability to

  1. Shift and pool resources when required
  2. Manage resources to ramp-up and ramp-down production almost immediately
  3. Optimization of resources to support dynamism
  4. Find ways to accommodate unforeseen needs

An agile business doesn’t pursue elasticity just for the sake of it. They pursue it to manage volatility and uncertainty. And this is what gives agile businesses a distinctive character.

  1. Market Responsiveness

Market responsiveness is the ability of a company to respond effectively and efficiently in a timely manner to diverse needs of customers, environmental changes and competition. The model requires strategic implementation of business intelligence, which in turn is a process of gathering data and transforming it into meaningful information.

The change in the business environment today is rapid and largely unpredictable. Therefore, the risk to operate in a volatile economy is augmented. In such a scenario, an organization cannot rely on a fixed strategy to respond to the changes in the market. The processes need to be fluid enough to accommodate changes. Market responsiveness is an essential characteristic that businesses need to exhibit to stay at the forefront of competition.

  1. Innovation

Innovation is at the core of Google, Facebook and Apple. They innovate more frequently than any other company across the world. And this is what helped achieve them a different image altogether. Agility is also about ensuring that there are enough innovations to offer customers something that they aren’t even expecting.

These organizations encourage their employees to spend time on issues and subjects that are close to their heart. In fact, they have innovators’ clubs inspiring them to pursue their interests and come up with new business ideas around them. Google allows their employees to spend 10% of the paid time on personal interests. They are motivated to experiment and fail fast. An organization has to develop a culture of innovation to be agile and respond to customers’ needs even before they realize.

  1. Free Flow of Communication

Most traditional organizations have only one-way communication, which is from top to bottom. Highly successful organizations ensure free flow of communication – top-to-bottom and bottom-to-top. Most agile businesses will agree that a clear and open communication is an important practice. Information flows easily in both directions and gets to decision makers rapidly. Agile organizations differ from traditional companies where interaction among employees is generally restricted. It is typically from executives to team members. And this is probably why the former is able to manage things better and faster.

Different companies may display agility in different ways at different times. But the true power lies in making agility a daily practice, irrespective of the nature, size and area of operations of a business. Agility is not a new concept that still needs to be explored or experimented with. Rather organizations need to put in a serious thought into it and develop a strategy to practice it in their daily operations.

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