What Leaders Need to Know About Business Agility

Ask any business leader what keeps them up at night. Chances are you’ll hear comments that are some variation on:

“Everything seems to be constantly changing. It’s hard to stay ahead of all the volatility.”

“I’m just not able to predict what our customers want and how the market will shift. It seems like things are so much more uncertain.”

“There seem to be multiple causes for any issue that we face. The complexity makes it difficult to plan too far ahead.”

“We’re finding it difficult to read signals in the market. It sure seems like we face a great deal more ambiguity than we did a few years ago.”

Ask those same business leaders how they think they should deal with these challenges, and after some baffled looks and shrugs, you’ll probably get a response like “we need to better understand what’s going on and react accordingly.”

They need to respond with business agility.

What is Business Agility?

What leaders need to know about business agility is that it is the ability to sense internal and external changes and respond appropriately in order to delight your customers and drive value for your organization. It goes beyond adopting agile software development practices to changing how all parts of your organization work.

Your organization adopts business agility so that it can respond to new opportunities or changes without losing momentum or vision.

Business agility is not about creating “SWAT teams” to implement short-term changes. Business agility requires a sustainable culture where the organization’s mindset effectively adapts to a complex, ever-changing business environment.

The ability to adapt to changes enables leverage points allowing pivots so you can seek and take advantage of new opportunities.

In effect, business agility changes the way you respond to change — you personally, your teams, your peers, and the organization itself.

The 3 Lenses of Business Agility

Hyperdrive identifies business agility through three integral lenses of High-Performing Teams, Agile Operating Model, and Customer Centricity.

1. High-Performing Teams

For your organization to experience business agility and organizational flow, you must employ high-performing teams.

You know you have a high-performing team when it exhibits these characteristics:

• The people on your team can take risks without feeling insecure or embarrassed.
• Your team members can count on each other to do the high-quality work they said they would do.
• Your team’s goals, roles, and plans are clear.
• Everyone on your team feels they are working on something that is personally important.
• Everyone on your team believes the work they’re doing matters.

If you look at a high-performing team from the outside, you may feel uncomfortable because of the tight alignment that the team members exhibit.

However, once you experience being your authentic self — contributing daily to a shared vision, and fully living your values and life purpose — you won’t want to work any other way.

2. Agile as Your Operating Model

The key to an effective operating model is “flow.” Flow is the essence of planning and delivering work with efficiency and effectiveness. That is, keeping the process lean while achieving the highest levels of quality.

An “Agile” operating model incorporates these principles while creating ties from business strategy to delivery using flow-based practices. There are many ways of operating in an agile fashion, just as there are many agile software development frameworks.

There is no one agile operating model that works best in every situation. You need to find the model that enables your organization to operate with tactical effectiveness, efficiency, and predictability using practices that align with agile values and principles.

The model you pick should create flow and generate a competitive advantage for your business. The proper model will also put people, their psychological safety, and their learning and growth at the center.

3. Customer Centricity

When a business shifts focus towards its people, it creates space for the employees to shift their focus to its customers.

Customers want organizations to become more adaptive to their constantly changing needs.

Leading companies have gone as far as integrating their customers directly into the development processes.

Your customers may not always be right, though not including their perspectives is one sure way to limit the connection and fast feedback so sorely needed for business agility.

The 3 Examples of Business Agility

What business agility really looks like can vary from one context to another. To help you get a better understanding, here are three examples of how business agility occurs in different contexts.

1. Target’s Dojo

Target is a large retail chain with 1800 physical stores and a large online presence.

A decade ago, they’d have many multiyear waterfall projects going on. The prevalent leadership style was command and control, and staff were organized in separate centers of excellence. People were allocated to multiple projects, and the people building solutions never interacted with customers. This organization structure and heavy governance dramatically slowed down the delivery of value.

In 2013, Target tried an alternative approach to helping teams learn — the dojo. It started as one leader’s attempt to improve procuring servers for development teams.

The dojo is now an immersive learning experience that has proven to be a successful way to introduce entire teams to new ways of thinking and working. Once focused on IT teams, the dojo now is open to teams across the company, even those with no interaction with IT, to improve their work through a customer lens.

2. Toyota Moving Beyond TPS

Toyota, a global vehicle manufacturer, is well known for the Toyota Production System (TPS), which served as an influence and inspiration to several creators of agile and lean software development frameworks.

The design and manufacturing process of TPS has helped Toyota outpace other vehicle manufacturers in terms of both quality and quantity. However, in the last few years, Toyota leadership realized that their true competition no longer comes from automakers so much as it comes from tech companies.

Toyota is making a major push to become more like tech companies before those tech companies become more like Toyota. This led Toyota to adopt business agility in order to deliver faster with higher quality and lower cost.

3. Anthem — Transforming Healthcare with Business Agility

Anthem, a national healthcare payer, recognized an opportunity to improve the lives of thousands of healthcare providers and patients by streamlining the provider experience.

Anthem built a new group that cut across traditional functional towers, divisions, and specialties to launch a truly cross-functional virtual organization with one focus: removing barriers for doctors to make their experience with Anthem easy. This work addressed barriers for providers to work with the Anthem platform, such as joining and having claims paid.

What’s the Difference Between Agile and Business Agility

Most organizations say they are “doing Agile,” but they are most likely adopting agile practices solely in their software development activities. While that allows teams to produce software faster, it doesn’t decrease the risk of building the wrong thing faster.

And it also means that the activities outside of (and interacting with) software development may not operate in a way that deals well with volatility, uncertainty, complexity, and ambiguity.

What leaders need to know about business agility is that it means changing how the entire organization works so that all parts of the organization work together to improve employee engagement, customer experience, and time to market. And in other cases, to improve business performance, safety, manufacturing, or operations.

Business agility requires the entire organization, including executive leadership, to adopt a growth mindset so that decisions are customer-focused and build meaningful value for stakeholders.

Why You Should Care About Business Agility

Business agility gives organizations the capabilities to maximize the results of their strategy.

If you’re going to build and maintain a competitive advantage to continue growth or fend off new, nimble competitors, you’re going to have to spread agility throughout the organization. You must expand past agile software development to embrace business agility.