business-agility

What Is Business Agility? Business Agility In A Nutshell

Business agility describes the capabilities or behaviors that give an organization the freedom, flexibility, and resilience to carry out its purpose and provide customer value. Business agility is an operating model for the next generation of businesses, helping them thrive in unpredictable markets, be adaptable to change, and reduce costs without sacrificing quality.

Understanding business agility

The world of business has never been more dynamic. Organizations of all sizes are struggling to remain relevant to their customers, whose expectations have never been higher. What’s more, employees are searching for more empowerment, clarity, and meaning in their roles.

It’s important to think of business agility as a common thread that runs through an organization, binding everyone together. Every employee is responsible for agility. Indeed, a business is only as agile as its least agile division.

Rather predictably, business agility has a customer-centric focus. This means listening to the needs of the customer and meeting them as quickly as possible by creating superior user experiences. 

Business agility helps the organization proactively respond to market changes or emerging opportunities with innovative solutions. It also facilitates a suitable response to internal and external threats – whether they be commercial, legal, technological, social, or political in nature.

The business agility framework

The business agility framework consists of twelve interacting domains across four dimensions centered around the customer. Proficiency in each domain across all areas of the organization must be achieved before the benefits of business agility are realized.

Let’s take a general look at the four domains and the dimensions they incorporate.

Leadership domain

  1. One teambusiness agility requires a one-team mindset where creativity and collaboration work toward shared goals. These goals span departments, functions, and teams across the organization.
  2. People management – leaders need to recruit, hire, nurture and develop recruits with a strong organizational fit. They must actively embody mission and culture.
  3. Strategic ability – leaders must also formulate and communicate adaptive strategies and empower teams to innovate by identifying new opportunities.

Operations domain

  1. Structural agility – to embrace change with relative ease and little disruption, the right structures need to be in place.
  2. Process agility – similarly, operations need to adapt and evolve as required to continually meet customer value expectations.
  3. Enterprise agility – here, business operations governance must encourage and facilitate innovation as opposed to stifling creative growth.

Individuals domain

  1. Craft excellence – business agility recognizes excellence as the ability for individuals to take advantage of emergent opportunities for customers.
  2. Growth mindset – individuals must also be open to continuous change and personal development in sometimes ambiguous environments. Importantly, they also need to be comfortable with making mistakes.
  3. Ownership and accountability – employees who are invested in customers and customer work tend to make better decisions and can adapt to change quickly.

Relationships domain

  1. Workforcebusiness agility requires an empowered and passionate workforce aligned with the company mission and strategy
  2. Partners – the relationships a business has with partners should be flexible and driven by customer value. They should not, where possible, be driven by contractual transactions.
  3. Board – lastly, the board of directors and the leaders of an organization should have an open, collaborative working relationship. A focus on the customer and long-term success should always be maintained, which helps the business resist the temptation of short-term wins.

Key takeaways:

  • Business agility applies the principles of agile development to an entire organization. Among other things, business agility facilitates adaptability, change responsiveness, and cost reduction.
  • Business agility has a customer-centric focus. Customer needs must be understood and met as quickly as possible by developing a high-quality user experience.
  • Business agility is based on a framework comprising four core dimensions, with each dimension in turn comprised of three domains. Collectively, they detail how business agility may be applied at the organization level.

Connected Business Concepts To Business Agility

Toyota Production System

toyota-production-system
The Toyota Production System (TPS) is an early form of lean manufacturing created by auto-manufacturer Toyota. Created by the Toyota Motor Corporation in the 1940s and 50s, the Toyota Production System seeks to manufacture vehicles ordered by customers most quickly and efficiently possible.

Scientific Management

scientific-management
Scientific Management Theory was created by Frederick Winslow Taylor in 1911 as a means of encouraging industrial companies to switch to mass production. With a background in mechanical engineering, he applied engineering principles to workplace productivity on the factory floor. Scientific Management Theory seeks to find the most efficient way of performing a job in the workplace.

Poka-Yoke

poka-yoke
Poka-yoke is a Japanese quality control technique developed by former Toyota engineer Shigeo Shingo. Translated as “mistake-proofing”, poka-yoke aims to prevent defects in the manufacturing process that are the result of human error. Poka-yoke is a lean manufacturing technique that ensures that the right conditions exist before a step in the process is executed. This makes it a preventative form of quality control since errors are detected and then rectified before they occur.

Gemba Walk

gemba-walk
A Gemba Walk is a fundamental component of lean management. It describes the personal observation of work to learn more about it. Gemba is a Japanese word that loosely translates as “the real place”, or in business, “the place where value is created”. The Gemba Walk as a concept was created by Taiichi Ohno, the father of the Toyota Production System of lean manufacturing. Ohno wanted to encourage management executives to leave their offices and see where the real work happened. This, he hoped, would build relationships between employees with vastly different skillsets and build trust.

Dual Track Agile

dual-track-agile
Product discovery is a critical part of agile methodologies, as its aim is to ensure that products customers love are built. Product discovery involves learning through a raft of methods, including design thinking, lean start-up, and A/B testing to name a few. Dual Track Agile is an agile methodology containing two separate tracks: the “discovery” track and the “delivery” track.

Scaled Agile

scaled-agile-lean-development
Scaled Agile Lean Development (ScALeD) helps businesses discover a balanced approach to agile transition and scaling questions. The ScALed approach helps businesses successfully respond to change. Inspired by a combination of lean and agile values, ScALed is practitioner-based and can be completed through various agile frameworks and practices.

Lean Manufacturing

lean-manufacturing
Lean manufacturing seeks to maximize product value while minimizing waste without sacrificing productivity. According to the Lean Enterprise Research Centre (LERC), 60% of a typical manufacturing process is waste. While the removal of waste is perhaps synonymous with lean manufacturing, the goal of the methodology is the sustainable delivery of value to the customer.

Kanban Framework

kanban
Kanban is a lean manufacturing framework first developed by Toyota in the late 1940s. The Kanban framework is a means of visualizing work as it moves through identifying potential bottlenecks. It does that through a process called just-in-time (JIT) manufacturing to optimize engineering processes, speed up manufacturing products, and improve the go-to-market strategy.

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Published by

Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which reached over a million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get The FourWeekMBA Flagship Book "100+ Business Models"