Change has always been a part of the business environment so the ability to respond is simply good business management. There is a lot of lip service about setting up the right practices and standards to promote business agility within organizations of all sizes. Seeing how a number of organizations are struggling or resistant to change, a question arises as to whether it is really a misunderstood term or a crucial mindset shift.
What is business agility?
According to BusinessDictionary.com, organizational agility is
The capability of a company to rapidly change or adapt to changes in the market. A high degree of agility can help a company react successfully to the emergence of new competitors, the development of new industry-changing technologies, or sudden shifts in overall market conditions.
That sounds good. One would hope that a company would have the wisdom and will to adapt to various changes However, after you read The Agility Factor, you realize that it is not a common choice or practice.
More on The Agility Factor
Thomas Williams, Christopher G. Worley and Edward E. Lawler III studied 243 large corporations in 17 industries over the 30-year period from 1979 to 2009. Some of these organizations included ExxonMobil, Harley-Davidson and Svenska Handelsbanken and they discovered that the companies that performed the best had embraced agility in their corporate cultures and practices. Another interesting discovery they noted in their Strategy + Business post was that there was not one way to exhibit this agility.
Williams, Worley and Lawler describe agility as
Agility is not just the ability to change. It is a cultivated capability that enables an organization to respond in a timely, effective, and sustainable way when changing circumstances require it.
What were the commonalities?
The data brought out a few interesting points. The companies who responded best to market conditions did not change just for window dressing. They changed because there was a strategic value in instilling a new way to do business. Harley-Davidson is a great example since it nearly closed its doors in 1981 but there is more beyond what the researchers noticed about how Harley-Davidson embraced agility. Since 2009, Harley-Davidson continues to perform well.
The commonalities that Harley-Davidson and the other outperformers exhibit are
- Strategize in dynamic ways
- Accurately perceive challenges in the marketplace and/or business environment
- Development of a “change-friendly identity”
- Shared purpose
- Unfiltered information flows up and down the organization
- Managers and decision-makers have regular contact with customers and other interested parties
- Test on small scale before committing whole organization
- While not extravagant with managing costs, willing to spend money, time and people to run experiments
- Pragmatic approach to embedding change capabilities
- Executives delegate authority to managers at local level for more effective responses to customer needs and/or wants
- Clear metrics and performance measures that are consistent with the business model
Agility is far more than awareness of economic circumstances
As I read through the post by Williams, Worley and Lawler, it seemed much more apparent that incorporating agility into the way the organization operated wasn’t simply doing certain things. If that were the case, many more companies would be considered outperformers. Underlying all of this is the crucial need for a mindset shift. Regardless if the organization is large or small, the leaders have to set a precedent of trust and open communication. There is also some application of kaizen given the high level of evaluation and subsequent application of changes when appropriate.
With the combination of internal flexibility, trust and awareness of external circumstances, business agility is a remarkable way to respond to the current turbulence as well as anticipate future threats and opportunities. There seems to be a good argument for adopting this dynamic and yet customized business model.
Join us for a closer look at agility and how it is applied as we discuss this on the Twitter chat, #KaizenBiz this Friday, April 19th at 5pm GMT/ 12pm ET / 9am PT.
How is business agility interpreted by companies around the world?
What role does complexity play in the development of a company’s agility?
If the environment is more chaotic than complex, how do you focus flexible responses in an established organization?
What change management strategies would foster more agility in organizational culture?
About the author: Elli St.George Godfrey, founder of Ability Success Growth, small business coach and executive coach, is the host of KaizenBiz. I’m passionate about business becoming a more human-centered place so I host this chat to connect business ideas and develop people.This passion shows up in my work with my clients. Whether you are expanding locally or internationally, Ability Success Growth guides established small business owners and executives to unlock the CEO within during times of transition and growth.