Pinning Down “Business Agility”

One increasingly encounters the term “Business Agility” in the mainstream business press. Business Agility can be hard to pin down – in our innovation and Lean Startup work, Business Agility means sensing and responding to customer and market needs with disruptive products and services in an immediate frictionless manner. In our Agile transformation work, Business Agility refers to the non-IT processes and functions in the value stream that must support responsiveness and short cycle times. Examples may include governance, portfolio management, budgeting, role accountabilities and incentives, leadership skills/styles, and even corporate culture. The enabling capabilities supporting this include embracing organizational learning, empowering highly engaged employees, and leveraging continuous improvement to sense organizational limitations and adapt the enterprise continuously.

What is Business Agility?

Business Agility is a hot topic, in part, because the adoption of Agile practices in IT, and the evolution of organizations to Agile thinking and value stream alignment, has made significant progress over the last half-decade or so (see our white paper “The Third Wave of Agile”). Many enterprises that began the transition to Agile five to ten years ago have largely solved their technology delivery problems (the HOW) and are recognizing huge opportunities for further improvement lying in line-of-business and support functions and technology investment policies. Companies undertaking “Digital Transformation” (another hard-to-pin-down buzzword) must develop the range of Business Agility competencies to realize significant benefits.

After solving the HOW of delivering technology well, organizations must learn to align to the voice of customers and users and become more adaptive and granular in selecting WHAT to deliver. In other words, the problem domain has moved up from “We can’t ship fast/quality/responsively” to “The stuff we ship doesn’t thrill users or doesn’t drive competitiveness”. Think of these capabilities as a hierarchy (e.g., Maslow’s), insofar as the ability to systematically and deliberately accomplish any higher-level capability depends on the organization mastering every underlying capability.

Listen to Steve Denning’s thoughts on Business Agility and his 3 Laws of Agile in this episode of Agile Amped In-Depth.

Using Business Agility to Disrupt Your Competition

There is an even higher level of capability beyond effective value assignment and validated learning. This capability is evidenced when the organization continuously improves alignment and performance. It becomes a learning organization capable of adapting and reinventing itself at the speed of market change, innovating and disrupting the competitive landscape. This ability ultimately transcends Agile or any other buzzword du jour, and yields the highest competitive advantage possible. See SolutionsIQ Chairman Charlie Rudd’s visionary series on learning organizations “Why Organizations Can’t Learn” to gain a deeper perspective on learning organizations, and get guidance on how organizations can realize the promise of organizational learning.

In my work as CTO of SolutionsIQ, I encounter two distinct levels of Business Agility competency that organizations must develop to survive and thrive in the era of VUCA (Volatility, Uncertainty, Complexity, and Ambiguity). The first level can be characterized as an organization still in the process of transforming itself, which is a prerequisite to the next level of Business Agility competency: transforming the marketplace. (It goes without saying that delivery agility — the ability to ship high-quality technology fast, often, with responsiveness — is a prerequisite to both levels of Business Agility.) These two levels of Business Agility competency are distinct from one another because they tend to be sponsored or driven by different personas with different problem sets. The table below provides a mapping of sponsor personas, their problems, and some of the specific skills or solutions that can solve the problem.

Level One – Transforming the Enterprise

PersonaProblemsSolutions & Capabilities
  • Ineffective business sponsorship
  • Poor alignment/accountability
  • Bureaucratic impediments
  • Agile Transformation
  • Agile Portfolio Management
  • Value stream alignment
  • HR roles and incentives
  • Poor accountability for IT spend
  • Low yield from IT investment
  • Agile Portfolio Management
  • Beyond Budgeting
LOB Head
  • Budget/Portfolio policies impede responsiveness
  • Agile Portfolio Management
  • Beyond Budgeting
  • Technology not being leveraged for competitive advantage
  • Poor strategy execution
  • Align value streams to markets
  • Redefine accountabilities
  • Leadership
  • Empower leaders

Level Two – Transforming our Markets

PersonaProblemsSolutions & Capabilities
VP/GM Product or Product line
  • We can’t experiment with business models
  • Legacy product lines kill innovation
  • Agile Product Management
  • Lean Startup
  • Business modeling
  • Design Thinking
  • Innovation Labs
  • We’re being disrupted in our markets
  • We can’t adapt
  • Design Thinking
  • Business Model Innovation
  • Agile Product Marketing and Portfolio Management
CINO (Chief Innovation Officer)
  • Our late-horizon product pipeline is anemic
  • We can’t innovate
  • Ideation
  • Lean Startup
  • Innovation Labs
  • Digital/Innovation transformation
  • Falling market share/revenue growth rates
  • Inability of the organization to sense, test, learn and adapt
  • Digital/Innovation transformation
  • Leadership development programs
  • Cultural adaptation

Organizations that pursue these Business Agility capabilities will be embarking on a complex but rewarding journey toward transformation of their competitiveness and market power. Implementation of cross-cutting organizational change poses significant challenges for leaders, but becoming an Agile business promises powerful new capabilities to address the challenges of the VUCA era, specifically:

  • Sense and respond to customer and market needs with disruptive products and services in an immediate frictionless manner.
  • Optimize all enterprise policies, processes, and structures, throughout the value stream for responsiveness and short cycle times.

SolutionsIQ has integrated a holistic change management framework around our Business Agility services to ensure enterprises achieve their strategic business objectives at every level of competency. We tailor the transformation journey to each client’s unique current-state, goals, and strategy, leveraging the solutions that will have the greatest impact in the shortest time.

What’s your organization’s perspective on Business Agility? How do you plan to achieve your strategic business objectives in the era of VUCA?

Download the White Paper

Many enterprises that began the transition to Agile five to ten years ago have largely solved their technology delivery problems and are recognizing huge opportunities for further improvement. Now they must learn to align to the voice of customers and users. This is precisely what Business Agility enables the Agile enterprise to do. In this white paper, we define what Business Agility means in different contexts and how to achieve it by mastering each level of the Hierarchy of Organizational Capabilities.