For the last several years I’ve been exploring the topic of business agility, and I want to share some of my thoughts and insights about the subject.
First off, a number of people have been relating this topic to the Agile software development movement. I’ve been guilty of doing this myself over the years, and I do believe that the Agile culture and mindset do play a strong role in the greater agility of organizations and companies. But I would like to put that aside for a second and focus on a purer definition of business agility when it comes from the larger company perspective.
Definition from the Web:
A simple search on Google turns up a number of definitions. Top of the list comes from HRzone.com’s glossary:
Business agility refers to distinct qualities that allow organizations to respond rapidly to changes in the internal and external environment without losing momentum or vision. Adaptability, flexibility and balance are three qualities essential to long-term business agility--hrzone.com
And second on the list is from Wikipedia:
Ability of a business system to rapidly respond to change by adapting its initial stable configuration. Business agility can be maintained by maintaining and adapting goods and services to meet customer demands, adjusting to the changes in a business environment and taking advantage of human resources.--wikipedia.org
Fundamentally I don’t have a strong disagreement with either definition; well except for the taking advantage of human resources part—humans are not resources! What I think both definitions lack is a complete explanation of the overall concept behind what we see in companies with high agility. And the first definition over stresses momentum and vision as the things that companies protect when responding to change. My view is that the vision and that momentum towards a wrong goal may be the very thing that we need to change when it is constraining us from seeing or reacting to market shifts.
An example of this can be seen with now bankrupt Blockbuster video, the former video rental behemoth. Their vision statement read: "At Blockbuster, diversity means valuing differences. It's a corporate value that must be continually developed, embraced and incorporated into the way we do business."--makingafortune.biz Don’t get me wrong, I like that the company was embracing diversity, but this vision lacked a level of product focus that could allow the company to concentrate it’s then Fortune 500 resources on thwarting competitors like Netflix from taking away market share. So, contrasting this to our first definition, I feel that we would want to lose both momentum and vision because both are leading the company down the wrong path. A strong business agility definition should allow us to break stride on a flawed vision based on what we’re seeing in the marketplace.
Taking this example of Blockbuster a bit further, let’s look at it from the perspective of the Wikipedia definition. According to Greg Satell, contributor to Forbes, Blockbuster was unable see past it’s base revenue model as competitors like Netflix started to take market share because of its unlimited rentals delivered by mail.
Netflix, unlike Blockbuster, did not collapse when the video rental market started to fade because of the rise of movie streaming services. In fact, they remained profitable because they had a better sensing of the trends in home delivery of entertainment and they did an early-bifurcation on their business model and shifted investments to video streaming over the internet.
To me, this highlights one of the core missing parts of the second definition. Companies with high agility have an ability to see new opportunities and make investments in spite of the possible long term impact to how they make money today. They have a more forward looking and growth mindset in their leadership and staff.
A growth mindset, according to Carol Dweck PhD at Stanford University, is more focused on learning as a way of achieving greater accomplishments. Companies with this mindset tend to take more risk and are more open to exploring new areas with a goal to out-learn their competitors. I think this points out another key attribute that I would want to see in a more complete definition.
Ray’s Attempt at a Definition:
So perhaps I should stop being critical of other people’s definitions, and take a shot myself on a better definition that describes the overall concept--perhaps something like this:
Business Agility is the organizational heuristics and flexible mindset to detect and react quickly to opportunities or issues within a multifarious set of circumstances in order to maintain or grow stakeholder value.
I don’t pretend to think that this is the world’s most perfect conceptual model around business agility, but I do feel that it does a better job in calling out some of the key concepts that we would expect in companies that behave this way.
First off, I would expect a radical devotion to maintaining and growing stakeholder value. This anchors us to a tangible reason why we need business agility in the first place. Next, we have a strong set of abilities that can be applied to solving problems or developing opportunities in a very rapid manor. This is probably where I would insert some of the concepts around Agile product development mindset and methods, opportunity discovery, lean-startup techniques, and the Solutions Thinking taxonomy. Lastly, a flexible mindset that allows us to adapt our worldview faster would give us the ability to not be married to applying all of our resources to current market trends. This would allow us to be open to doing experimentation in adjacent areas to allow our organization to gain knowledge in a broader context than what we are delivering in today. That knowledge, when applied at a later date to an opportunity, allows us to move quickly to provide customer value faster and gives us the ability to pivot to more fruitful areas as we continue to grow our companies.
Overall, I don’t believe that my definition somehow magically replaces the other two definitions or any of the other definitions that might exist out in the world. My goal here is to start some conversations around this. If you like, please reach out to me on ways that we can improve the overall definition in the space. You’re welcome to join me at Agile 2017 in Orlando this year where I’ll be hanging out in a special Business Agility Lab in the Agile Alliance lounge space. Come join me in helping to build the body of knowledge around ways that we can improve business agility.