Agility is incredibly important to an enterprise and can be maintained to gain competitive advantages.
BY FAISAL HOQUE
[Originally Published @BusinessInsider]
Also Featured in LinkedIn Pulse Leadership & Management.
The modern economy — local, domestic, and global — operates in a state of accelerating change, driven by increasing and changing competition.
This is due in part to easier market entry created by advances in technology and communications infrastructure, restructuring of product sourcing arrangements, the growing availability and changing costs of global labor pools, the continuous restructuring of capital markets, and as noted above, the emergence of new economic powers.
The average lifespan of a company listed in the S&P 500 has shrunk by more than 50 years in the last century, from 67 years in the 1920s to 15 years today, according to Yale professor Richard Foster. Today’s rate of change “is at a faster pace than ever,” he says. Foster predicts that by 2020, more than three-fourths of the S&P 500 will be companies we don’t know about today.
One of the greatest challenges that business leaders and, by extension, their enterprises face is the ability to quickly respond to this constantly accelerating market change and to act as the catalyst of organizational adaptation.
Agility, by definition, is an enterprise’s response to change and challenges driven by macro- and micro-economic conditions. Business leaders often use the term “agility” to describe their business plans and strategic initiatives, but it is often little more than a buzzword — and a fervent wish. Thriving under constant market pressure requires business leaders to identify, understand, and respond in real time to change and disruption.
By being agile, an organization is able to sense and respond to competitors’ strategic moves within existing product markets, as well as sense and respond to environmental signals arising from shifts in customer desires or in new technologies.
Organizations demonstrate strategic agility in four major ways:
- They continuously scan their environment to identify both threats to existing positions and opportunities to forge new positions.
- They regularly engage in strategic experiments. That is, they implement small-scale strategic initiatives to challenge internal or external work environments to gain experience with emerging technologies, work practices, product or service concepts, customer segments, or product markets.
- They devise adaptive business architectures so that their competitive assets (as well as those of partners) can be realigned quickly — shutting down activities, commencing new activities, or shifting resources among activities.
- They learn to radically renew competencies that characterize their competitive nature.
An organization that has the ability to successfully negotiate its path through the ever-shifting competitive landscape has developed the talent to continuously transform itself as opportunities and threats appear.
This organization maintains three characteristics:
- Ongoing assessment of activities, eliminating those that don’t serve the core business strategy.
- Continual refinement of activities for greater efficiency and productivity.
- Redirection of resources to new products, processes and business models.
Building an agile organization is not easy. Change must become a part of an enterprise’s fabric. Bringing in a persuasive leader might help the transformation, but it is the change management skills they bring to the table that will help make the journey a successful one.
More crucial to that success, however, is the need to incorporate new ways of doing business into the company’s management systems and business processes. This means new organizational structures, the creation and sharing of new types of information, and establishment of new decision-making processes.
[Photo: Flickr user Palace Gnome]
Serial entrepreneur Faisal Hoque is the founder of Shadoka, which enables entrepreneurship, growth, and social impact. He is the author of Everything Connects: How to Transform and Lead in the Age of Creativity, Innovation, and Sustainability (McGraw-Hill) and other books. Use the Everything Connects leadership app for free.
Copyright (c) 2016 by Faisal Hoque. All rights reserved.