What is business agility?

Businesses can face an unending number of disruptions at any moment with pandemics, shifting regulations, supply chain challenges, and rapid technological advancements, to name just a few. The ability to pivot quickly isn’t just an option anymore; it’s critical for survival.

That’s where business agility comes into play. By embracing agile strategic management, organizations can respond rapidly to these changes, enabling them to stay ahead of competitors and maintain long-term success.

In this article, we’ll review how to apply business agility to your organization, examples of business agility, and discuss step-by-step processes for how you can develop this capability to sharpen your competitive edge. Read on for all the details. 

Business agility is an organization's capacity to respond quickly and efficiently to external changes, such as market shifts, technological advancements, or customer needs.

Traditionally, businesses follow long-term plans to ensure teams stay on track to achieve overarching goals. However, since market disruptions are much more common now, long-term plans that lack flexibility often fall short. 

For instance, consider when new technology reshapes entire industries, such as automation in manufacturing that accelerates assembly processes. If you keep following your long-term plan and don’t adopt that new technology into your strategies, you’ll fall behind competitors who do adopt it and harness that technology’s full potential. 

This simple case highlights the paramount importance of agility in business. Things will change, and you must be prepared to shift to keep up. 

However, dealing with change is not always a business’ best competency. Our Global State of Strategy Report found that 90% of organizations struggle to adapt to rapid market changes. The report also highlights vast differences in performance between the businesses that are prepared to be agile and those that aren’t. So, if you can successfully implement flexible strategies in your business, it’ll often help you get ahead of competitors who are still struggling and trying to figure it out. 

You might also hear business agility related to popular frameworks like Agile Scrum or Agile software development. Business agility is often witnessed in organizations that apply Agile frameworks since they create a solid foundation for collaboration, quick delivery, and adapting to change. Plus, adding business agility to these frameworks can help take them a step further. 

Agile frameworks are typically built around collaboration, iteration, and customer-centricity across the entire business. When you apply business agility to those concepts, you emphasize the need to adapt to change. 

For instance, a workplace might transition to reporting remotely instead of in the office, so your collaborative process with team members would have to evolve with that new shake-up. 

You might also hear about business agility in SAFe when discussing this topic. SAFe provides a structured method for scaling lean and agile practices across an entire organization, not just within software development but also in areas like operations, marketing, and finance.

Business agility in that process means that all teams must adapt to change and remain flexible. This applies both while you’re trying to scale agile practices across the organization and in response to market disruptions that pop up along the way. 

Adopting business agility typically involves adopting Agile frameworks like Scrum, Kanban, or Lean and embracing agile principles across your organization. These frameworks provide structured, iterative processes for managing change and help agile companies reduce inefficiencies, promote collaboration, and make faster decisions. However, the working framework is only a small part of the equation.

Leadership plays a crucial role in fostering an agile environment and creating an efficient business agility value stream. Leaders must support cross-functional teams and cultivate a culture of continuous improvement and empowerment. While there isn’t a specific business agility certification, getting certifications like SAFe Agilist and ScrumMaster (CSM) can provide helpful skills to drive these transformations.

Agility also involves regularly evaluating progress. Our Global State of Strategy Report highlights that high-performing companies are 3.4 times more likely to conduct continuous reviews of their strategic priorities, showcasing the importance of frequent evaluation.

Business agility is rooted in continuous strategic adaptation, driven by real-time data and ongoing feedback. To implement business agility within your organization, you can follow these key steps aligned with an always-on strategy:

1. Strategic analysis: Begin by analyzing real-time data to understand market conditions, customer needs, and internal performance. This ensures that strategic decisions are based on up-to-date insights.
2. Define desired outcomes: Clearly outline your strategic objectives and the business outcomes you aim to achieve. These outcomes guide the overall direction of your agility efforts.
3. Align teams on outcomes: Rather than focusing on rigid project plans, empower teams to adapt their approaches while staying aligned with the desired outcomes. This flexibility allows for adjustments in response to market changes or unexpected challenges.
4. Engage customers: Maintain direct customer feedback loops to ensure your product or service meets evolving needs. Customer insights help refine your strategy and ensure you're delivering maximum value.
5. Measure and iterate: Continuously measure performance against key metrics. Rapid feedback loops allow for quick adjustments, ensuring your strategy remains relevant and effective as market conditions change.

There are four core components you need to achieve business agility:

1. Leadership and culture: Leaders create a flexible, innovative culture where teams are empowered to make quick decisions.
2. Processes and tools: Agile organizations use tools like project management platforms to streamline communication and execution.
3. Structure: A flatter organizational structure with cross-functional teams enables faster decision-making and reduces bottlenecks.
4. Metrics: Regular performance monitoring is key. You must ensure your efforts are helping you reach desired business outcomes and KPIs (key performance indicators) and adjust as needed. 

Quantive StrategyAI enhances strategic agility by leveraging AI-powered insights to help organizations anticipate market changes and optimize performance to gain a competitive advantage. By continuously aligning strategies with real-time data, StrategyAI enables businesses to adapt more quickly and effectively, bridging the gap between strategy execution and development. 

Ready to gain true business agility and keep up with customer demands? Contact us today to learn more about how Quantive StrategyAI can help you develop, execute, and evaluate strategies that drive success.