What is Business Agility?

“To thrive as a business, you need to be agile.”

Everyone would agree with this commonplace claim, as organizations undoubtedly need to be adaptable to changing environments.

At the same time, I observe that businesses today are regularly offered bad advice on how to get there. Typical examples include practices or techniques without context or clear goals (e.g., “do daily standups”), or “one size fits all” frameworks (e.g., “manage everything as if it were a product”).

In the end, a lot of organizations find themselves using a (software-driven) practice without a clear purpose. For an overview of those practices, see this comparison.

Read this article if you want to make up your own mind about what Agility means for your Business BEFORE you run for a methodology.

What Do I Need to Know?

1. Business Agility Is about Business Results – in a Business Environment
2. Businesses Need to Anticipate, Adapt and Accelerate
   1. Anticipate
   2. Adapt
   3. Accelerate
3. Businesses Are a Connected Network of Human Systems
4. Agility Requires a Stable Decision-Making Framework
5. What To Do Next

What Do I Need to Know?

1 – Business Agility Is about Business Results – in a Business Environment

Business organizations exist to deliver specific business results. Animation film studios exist to entertain families; a drilling control center exists to prevent spills; finance departments exist so you don’t run out of cash; hospitals exist to provide care. They all get paid for what they do.

No business exists in a vacuum, and no business is linear. So, without a doubt, to be successful in their mission, organizations need to be adaptable to changing environments. The faster they can adapt, the better the results. That’s what the general public would call being “agile”.

What slows you down is that, in reality, no organization only has one stakeholder. The more your organization focuses on improving your customers’ journeys, the more interconnected your offering becomes, and the more you need to consult with stakeholders from around the company. This is true for any type of organization, including organizations that organize themselves from the bottom up, such as holacratic organizations.

2 – Businesses Need to Anticipate, Adapt and Accelerate

In the end, you want to accelerate the execution of what matters most to your business.

Therefore, no matter the industry, function, or organizational layer, an organization needs to build three critical capabilities. The universal 3 A’s of Business Agility are:

• Anticipate what will need special attention.
• Adapt concrete plans, overarching goals, and organizational setup.
• Accelerate execution of priorities.

2.1 – Anticipate

Anticipate refers to your ability to identify, foresee, or forecast demands, requirements, opportunities, threats, and changes. You want to sense what will happen so you can start adapting early and efficiently, instead of hectically putting out fires.

Some practical advice about strategies and techniques to consider in order to build this capability:

• Take data analytics seriously. Data is everywhere today and it affects every business, so you, as a leader, need to know how to leverage data analytics to identify patterns and trends. There are many ways to identify trends through data, so you have to develop your own strategy and processes if you don’t have them yet. If you do have them, keep going and expanding.
• Involve everyone. Many employees in your organization likely have perspectives about where the business is heading, opportunities, threats, or ideas. Getting a diverse perspective and asking people for their ideas is a very cost-effective way to see problems and opportunities from different angles in order to make the best decisions.
• Look outside and beyond. Don't be biased by only looking at your competitors. In the modern age, businesses are constantly overlapping with each other. Your main competitor in the near future might be someone you had never previously considered as a threat to your market share and your business model.
• Turn observations into action items. To be effective, anticipation needs a practical result — something you can act on. So, practically speaking, what you need to develop is a list of potential action items for your organization. You get to this list by tapping into different sources, filtering, and turning whatever meaningful observations are left into a potential action item.

You see, anticipation isn’t magic; it’s not sitting in symposiums all day or using AI — it’s hard work! Hard management work, working together with other humans.,coming up with a long list of potential, practical action items… Does that feel overwhelming? Oh yes. And it should. Because only when you have options can you make a decision. That’s your job. And that’s what you do when you adapt.

2.2 – Adapt

There is surely nothing quite so useless as doing with great efficiency what should not be done at all.

Peter Drucker

Harvard Business Review, 1963

Adapt refers to your ability to make decisions on priority, resource allocation and timing, as well as your ability to communicate the decision and adapt execution plans, goals, and organization accordingly.

• Decisively choose what your organization should focus on and what it can reliably deliver. You can’t focus on 10 things at the same time.
• Rearrange the organization if necessary. This can be as little as shifting some capacity to a project team, or as much as a major re-org.
• Don’t spend too much time on how others do their job, but trust in their skills. That’s why rough plans suffice.

Expect the experts to design work for adaptability and impact, so they deliver an outcome at every interval. Whether it’s line work (measured in KPIs & SLAs) or changes (in projects or products). Product management would dub this “working in increments”.

• Think of options. Create scenarios that capture your options, spanning investment into operations and change, so you can make a choice.
• Have a bias for making decisions. Whatever potential change is on the agenda, make a decision on it and communicate the result. Even if it’s a “we don’t change a thing for now”.
• Make decisions together. Create decision-making committees, consisting of knowledgeable managers across silos, to minimize bias and noise in decision making. (See also: https://www.youtube.com/watch?v=PVZPLavDSAs)

2.3 – Accelerate

Accelerate is the ability to speed up the execution of priorities and implementation of initiatives, and to improve productivity and effectiveness.

Acceleration means speed with efficiency. Sometimes this means doing more with less, or doing more with what resources you have available today. That’s why, if you are not effective at anticipating and adapting, you probably cannot accelerate your business results. Effective acceleration also means that leadership, teams, operations, and structure will align toward clear goals and results.

In this sense, every human system in the organization must be prepared to accelerate the delivery of results once a decision is made. This implies a lot of elements, such as resource optimization, talent reallocation, and simplification of processes and operations without jeopardizing quality, cost, time and impact of the results. A couple of things to consider:

• Tailored structure and leadership. Let go of executional details. As a Business Leader, you are tying everything together, so you have to make sure that if, for example, product development takes another 2 sprints for the next release, marketing is aware. Or alternatively, they must be informed if development has been completed as planned by committing more resources or by applying that Dev hack that apparently only they were able to come up with. Let the structure and leadership align with the business needs and challenges, so they can become real enablers not blockers of business results.
• Context over control. As a business leader, you can’t be everywhere and you can’t make all the decisions all the time, so leave it to the people in front of the problems and initiatives to make their own decisions. At the same time, control is not evil. As a Business Leader, every now and then, you apply changes to how the organization executes things, too. Don’t let anyone tell you that this is a bad thing. This isn’t micro-management. As long as you don’t do this for your ego, you are just helping the organization be more efficient and successful.
• Simplification of processes and operations. Standards and processes are really important as long as they are effective and aligned with business goals. Empowered and talented teams usually underperform due to an excess of processes and rules. Focus on the deliverables and outcomes of their work, not on the process. Apply lean principles for all processes and operations (modularization + standardization + roles). Then, remove everything that is non-critical to achieving the business goals.

We know this seems to go against the grain of empowered teams, but humans (even entire teams, would you believe it) make mistakes and work with wrong assumptions. Experienced leaders with good business sense act as enablers to ensure teams have the right capabilities to make the right decisions. So you do need to dedicate time and resources to revise how the organization is doing things at regular intervals. Don’t have anyone talk you out of that.

3 – Businesses are a connected network of human systems

But the world is not linear, especially the world of organizational structuring. It intermingles all kinds of complex flows – parallel, circular, reciprocal.

Henry Mintzberg|The structuring of organizations, 1979

It’s all about people!

Businesses exist for delivering a specific business result, but they consist of us, humans. We have common motivations when we join or found a business organization: safe/high income, nice/interesting colleagues, opportunities to build something meaningful and large. That’s why we work with others to achieve joint goals and do our best. At the same time, we have different knowledge, experiences, skills, and interests, and the systems we are working in were set up with a specific mission in mind.

Think of your businesses as a large number of individual human systems connected to other systems. Each system has a mission. Certainly, in your organization, there are systems that help you monitor your operations, develop software, hire talent, collect money, develop strategies, and manage performance.

There is no need to establish one universal system to rule them all. What you want is that each system delivers on its mission – guided by the 3 A’s.

Now, as long as the systems are in sync, this works perfectly fine. And the key lies in the 3 A’s of Business Agility.

4 – Agility Requires a Stable Decision-Making Framework

The three A’s of Business Agility and the human systems need to have a stable decision-making framework to successfully and reliably deliver business results. But, don’t get confused — we are not saying that Business Agility is about rigidness. Scientific research on Agility clearly shows that discipline in decision making is far more important to success than other factors such as strategic clarity and innovation climate1.

Now, the key missing element to achieving Business Agility today seems to be a dynamic, yet stable structure that ties the three A’s together and that is suitable for Business Management and its context. Just like what Scrum achieved for Software Development.

We believe that what is required is a stable, disciplined, yet lightweight decision-making framework that serves as the foundation that handles all the moving parts, such as customer needs, stakeholder goals, company strategy, and resource availability. It also must align with the connected network of human systems in the organization.

For a practical implementation of the 3A’s, proven at hundreds of real companies around the world, see our Lean PPM Framework.

What To Do Next

Business Agility is a competence that will help you tackle uncertainty, reliably deliver business results, and be ready for growth. Your next steps are:

1. Identify value-creating units
2. Within these units, establish stable decision-making frameworks that follow the logic of the 3A’s
3. Understand the individual systems based on how they interact
4. Improve the whole by looking for recurring patterns across the systems rather than local or individual events or effects

Feel free to reach out to me personally (Linkedin) to discuss how this could look for your organization.