The 2020 Business Agility Report was just released publicly yesterday (September 17, 2020) and for the third straight year, the annual report reveals where organizations are in their journey to becoming more Agile businesses. The 2020 Business Agility Report examines data from 359 organizations, spanning 28 industries and 53 countries.
What is of particular interest for us is that this year’s survey responses were collected in the time period preceding and through the first few months of the COVID-19 pandemic, giving us a unique view into the impact of a global disruption while it was happening.
In the introduction by Steve Denning, author of “The Age of Agile” and Forbes senior contributor, he highlights the importance of this report in today’s globally disrupted world:
“The report shows respondents’ strong belief that the focus on business agility is leading to enhanced customer and employee satisfaction, speed to market, market success, collaboration and communication, accountability, and improved ways of working.”
Furthermore, evidence from respondents shows that improving business agility across the entire organization played a significant role in the effectiveness of their response to COVID-19.
Where Do Organizations Fall on the Business Agility Maturity Scale?
Survey respondents ranked their organizations on a business agility maturity scale from 1-10 (pre-crawl to flying). Although in 2020 we saw a 9% increase in average business agility maturity, the average is at 4.8 (walking), still well below the “favorable” Run or Fly ratings of 7 or more. However, 25% of organizations showed high business agility maturity. Not surprisingly, small organizations were shown to have more agility than large ones.
The key finding is a significant increase in average maturity post-COVID-19. Organizations with more than 10,000 employees reported a 9% improvement in average business agility this year, a positive trend in the segment that has historically reported the least agility. While COVID-19 is a factor, it is not the sole contributor, as large organizations were reporting increased business agility even before COVID-19.
How Long Does Business Agility Transformation Take?
While a business agility transformation is a journey that arguably never ends, 65% of respondents have been on the journey for less than three years. Organizations that were 8+ years into their agility journey scored 43% higher on average than those in their first year. Furthermore, organizations who were 3-5 years into their journey scored 34% higher than those in their first year.
Leadership Backing is Needed
Respondents rate business agility maturity significantly higher when it is led by the Board of Directors or C-Suite, compared to those led by a Line of Business (LOB) leader. Those who are limiting their transformation to Technology have a significantly lower maturity than those who are transforming multiple business divisions. Within the overall observed increase in average maturity post-COVID-19, organizations that included Human Resources in their transformational journey saw a further increase in their maturity by 12%.
What are the Top Challenges to Business Agility
In some respondent organizations, leaders continue to use leadership styles and behaviors that are consistent with the legacy culture, and not the new culture that the organization is trying to instill. This sends a mixed message to the rest of the organization. Related to leadership style, the analysis revealed the challenges of a lack of vision as well as insufficient sponsorship for business agility by management.
Many traditional business models are still prevalent in organizations. If the organization does not take conscious and deliberate steps to drive culture change, organizational change will fail to stick. Employees revert to their old ways because not enough has been done to change the core belief systems that formed the current-state culture.
Functional silos reinforce organizational barriers and detract from the collective accountability of business outcomes. According to one respondent:
“The functional leaders also have their own departmental goals which sometimes contradict with the cross-functional team goals. To be recognized and not be fired, one has to satisfy their department goals.”
For recommendations and more data and insights from the most recent survey, read the full 2020 Business Agility Report.