Sunday, July 1, 2012

Business Agility: A Model for Improving Responsiveness – Pt. 1

This post begins a short two part series, continuing the subject of business agility first examined in my March 25 post.  Part One of the series addresses the theory behind agility.  Next week’s Part Two will focus on the practice of agility.


Business agility has long been the hallmark of successful organizations, and its importance in contemporary business is growing.  True agility, however, often requires a mindset and operational dynamic that is counter intuitive given industry’s penchant for quick fixes and control.  Real agility requires a business culture and strategy that is sustainable over the long haul.  Typical business reactions such as reducing headcount and services, de-emphasizing customer service, or deferring projects and initiatives that create capability and capacity will work for the short term, but they are not generally sustainable.  These strategies consume or discard resources that may be better used creating and re-energizing.

Defining Agility – An Elusive Quest
One of the problems with “Agility” is defining exactly what one means when one uses the term.  It is a common term and strategy in the IT world, but focuses almost exclusively on IT systems that improve communication and data sharing to speed processes. Manufacturing types express agility in terms of customization and last responsible moment commitments.  Knowledge management professionals describe it as using knowledge management systems to provide greater or faster awareness of changes.

In their paper “Understanding Organizational Agility: A Work-Design Perspective” Holsapple and Li suggest a homogenized definition that can be applied in most cases, identifying alertness and response capability as key dimensions of agility. 

“Agility is the result of integrating alertness to changes (recognizing opportunities/challenges) – both internal and environmental – with a capability to use resources in responding (proactive/reactive) to such changes, all in a timely, flexible, affordable, relevant manner.”

Another important characteristic of agility is recognized in the statement,

“Business Agility is in the mind of the organization and comprises an absolute willingness to constantly monitor one’s position, in a timely and appropriate manner – not just to respond quickly.” 

This statement makes the explicit and often misunderstood point that agility is not just about speed.

Three Levels of Agility
Strategic, Operational, and Episodic agility comprise the agility spectrum.  Each is achieved intentionally through work design that promotes organizational and cultural drivers which are supportive of agility.

Strategic agility can be identified as maximizing organizational alertness to business changes and integrating response capability.  Its purpose is to structure and govern operational work to assure alignment with organizational mission and strategies, thereby enhancing the organization’s ability to identify and take advantage of business opportunities.

Operational agility derives from this integration of alertness and response capability, governing episodic work by allocating resources and setting schedules in the most efficient manner.

Episodic agility refers to what we may more colloquially describe as transactional or task-specific work.  This is where work processes produce tangible value.  It may be intellectual collaboration in the case of knowledge workers, or the fulfillment of specific service or production processes.  Importantly, it is at this level where alertness to task level environmental conditions may lead to process variance.  There is an interesting dichotomy here between agility, which emphasizes alertness and appropriate response to changing conditions, and process management which generally emphasizes control and stability.

The three levels have definite boundaries, support each other, and when taken as a whole permeate the entire organization. In this manner they provide the combined alertness to changes and response capacities that enable taking advantage of opportunities, or adjusting to threats in a nimble manner.

Next week we discuss three specific strategies that help improve agility.

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