Business agility and high performance in the enterprise – Episode 105

This episode covers the concept of business agility in the enterprise and shows its relevance to high organizational performance and excellence. The episode covers what it really means to be agile, discusses its importance, and see how organizations are building capabilities to become more agile to stay competitive.

In this episode, I will discuss the concept of business agility as that is getting a lot of attention lately in the enterprises. We will review what it really means to be agile, discuss its importance, and see how organizations are building capabilities to become more agile to stay competitive.

The Need for Business Agility

Let’s first focus on what business agility really means and the need for it in today’s world. As we all know, and we can see it happening, for the past few years, the industry has been ongoing through a lot of disruption. We see a lot of businesses either transforming themselves dramatically in how they operate and serve their customers or in some cases, we see businesses closing their doors. And all this is happening because of the disruption that has been triggered by the digital revolution and similar phenomena. This disruption where enterprises either have to adapt or risk being driven out of the market has become the new constant and the norm.

One of the major characteristics of this disruption is that it is associated with rapid change in the marketplace. And this applies to almost all industries. We can see for example businesses bringing new products and services at a much rapid pace than before. We see businesses interacting and engaging with customers in new ways and responding to their needs quite quickly. And so forth. So, to keep up with this kind of an environment, requires an agile enterprise.

So, business agility refers to an enterprise’s ability to respond to this ongoing disruption by meeting market and customer demands. It’s about adapting to the constant changes and pressures that an organization faces to bring incremental but rapid changes both internally and externally. The greater the agility, the faster an organization can meet its customers’ needs thus increasing customer satisfaction.

Business agility also provides organizations the opportunity to experiment with new innovations as this enables them to roll out new products and services to the market quickly, gauge market’s reaction accordingly and then can incorporate that feedback rapidly before releasing the next version or iteration of their offering. In the face of fierce competition and constant market pressures, every organization therefore should incorporate agile practices (and agile project management) in all its business operations. We have heard this before that to succeed, we need to fail faster and do it repeatedly by testing new innovations until we get to where we want to be.

Characteristics of an Agile Organization

So, now as we understand what is meant by organization agility, let’s review some of the characteristics of an agile organization based on what we have just reviewed so far.

In an agile organization, its delivery processes are appropriately aligned to its users, customers, and the market in general to ensure that the right products and services are delivered quickly and based on market and business requirements.
In an agile organization, its delivery processes are nimble and flexible, yet stable to enable rapid and defect free delivery.
Also, in an agile organization, the organization appropriately listens to market and customer feedback and responds to internal and external change effectively.

So, if you are part of an organization or department trying to make it agile, you should realize that in building such agile capabilities, your organization may need to tailor its overall delivery mechanisms to become nimble and flexible to respond to change. This delivery capability that in turn is made up of internal systems, methods, and processes must be lean, stable, yet flexible, and fast to deliver at market speed.

Principles of Agile

Next, let’s review some of the principles that one needs to keep in mind when trying to transform its operations to be more agile.

First, for those who don’t know, agile methods first surfaced in the enterprise and the overall market in the area of software engineering. The success of agile techniques in the technical communities have since put pressure on other parts of the enterprise to adopt agile techniques as well. That’s because from an enterprise standpoint, there is no use of delivering software in an agile manner if the overall delivery life cycle comprising of all legs of the delivery process (from ideation to delivery and deployment to production) of the overall delivery life cycle is not effective and efficient.

The agile methods that have surfaced in the past few years are based on a set of 12 principles that were developed as part of an initiative called the Agile Manifesto. Due to the simplicity and commonsensical approach of these principles, they have become the foundation for agile practices that are now applied enterprise wide in areas even outside the discipline of software engineering. The twelve principles behind agile can be found at http://agilemanifesto.org. Let’s review those here:

Satisfy the customer constantly by continuous delivery of the product
Change is welcome in all phases of the delivery lifecycle
Focus on continuous delivery of the product by breaking it down in smaller releases.
Business users and product development teams must collaborate constantly on delivering the products
Empower teams to self-organize and to make decisions
Encourage face to face (and one on one) conversations and collaborations and bypass bureaucracy
Establish working products delivered to production as the primary means of success
All organization stakeholders should strive to maintain the pace of delivery and performance
Always strive for excellence in the delivery of products and services
Encourage simplicity in all matters
The best results usually come from self-organizing teams
Constant reflection

Business Scenarios in the Adoption of Agile

In the last segment of this episode, let’s review business scenarios in the adoption of agile and see how organizations are adopting agile practices within the areas of Information Technology and other areas:

In one agility scenario, we see organizations working to break the barrier between their departments. So, in all areas of the enterprise, where processes progress in a waterfall approach from one phase to another and are getting tied up in a bureaucracy where there are hand-offs from one department to another, organizations are instead looking to break down those barriers between departments by setting up cross functional teams to collaborate on projects and to deliver them rapidly.
In another agility scenario, we see enterprises delivering software rapidly to the market. This is a departure from earlier scenarios where production release cycles were quite long. As we have covered earlier, the most common application of agile has been in the area of software development and engineering. SO, rather than following waterfall types of methods, organizations are building software in multiple iterations where each iteration releases a working product with cross functional teams involved in the planning, development, and testing of each work product. The agile methods that are used to perform this type of work are called Scrum, XP (Xtreme Programming), FDD (Feature Driven Development) and many others.
In a third agility scenario, many organizations are now adopting software that has minimal deployment and upgrade times. For example, traditional ERP software packages (e.g. earlier versions of SAP and Oracle that used to be installed in house) take longer to install and upgrade relative to the newer cloud based offerings (e.g. Workday and other ERP versions on the cloud)
Finally, in trying to become agile enterprise wide, to streamline the process from idea inception to project execution, organizations are now adopting portfolio management systems and software. This is because in many organizations, the process starting from idea inception to project formulation, definition, approval, and then execution is not very structured and thus it takes a long time to deliver on projects. As we have covered earlier, in the hypercompetitive environments of today, organizations can’t afford to take long to deliver on ideas. One way some organizations are becoming agile in this regard is that they are instituting portfolio management (PPM) techniques and systems across the enterprise to streamline the entire process from idea capture to execution and product delivery. This is allowing organizations to evaluate and test ideas and execute projects and bring products to market rapidly.

So, to conclude, these were some of the scenarios in which organizations are adopting agile practices. As we talked about this earlier, agility is no longer an option and organizations therefore will constantly be looking to bring agile methods in all parts of their business from strategy to operations.

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