To survive in a world marked by constant change, companies simply have to adapt. When we talk about business agility we refer to the ability to be responsive to changes in the market. So how do you become an agile organisation? How do you deploy agility across an entire organisation? Without speaking of a miracle recipe or a tailor-made framework, our expert Eric Ducasse and our thought leader Arie van Bennekum review the state of business agility today and discuss 4 levers to help you transform your company into an efficient, innovative and responsive organisation.
1. Business agility: definition and challenges
Businesses of all sizes are seeking to remain competitive in an increasingly rapidly changing economic environment. Those that stand out today are those that have been able to adapt to external disruptions. They have been innovative and have shown themselves capable of transforming themselves from inside.
The most successful companies have an agile way of working, relying on a certain mindset (state of mind) and frameworks (work practices), which makes them adaptable by nature. Their governance style offers the advantage of being able to make decisions on which all the businesses and functions are aligned, as one single entity.
The Business Agility Institute (BAI) defines business agility as a set of organisational capabilities, behaviours and working methods that provide your business with the freedom, flexibility and resilience to achieve its goal.
For Eric Ducasse, Director of Organisational Transformation Services at Wemanity, “the challenge of business agility is to allow the company to adapt much more quickly to its market, to its customers, to new entrants, or to successive crises… ” The global COVID-19 pandemic has shown us the importance of being able to reconfigure in the event of a crisis and extreme uncertainty.
2. Business agility, 20 years after the Agile Manifesto
Written in 2001, the Agile Manifesto aims to improve software design and development practices. Arie van Bennekum, Thought Leader at Wemanity, is one of its co-authors. ISDs (Information Systems Departments) have gradually adopted the 4 values and 12 principles. Over the years, agile practices and frameworks have spread among IT teams.
20 years later, agility is still mostly confined to IS and IT functions. According to the 14th Annual State of Agile Report, they represent 63% of teams that have adopted agility in their work practices. Frameworks such as Scrum or SAFe are well suited to development teams, but show their limits when it comes to propagating agility to other organisational functions: operational, marketing, sales, HR, purchasing, etc.
While agility in itself may no longer be the subject of debate, its implementation nevertheless remains heterogeneous. The adjective “agile” is increasingly known and used, but, unfortunately, sometimes overused: this same State of Agile report finally tells us that 84% of the companies surveyed do not consider themselves mature enough in terms of agility.
3. The challenges of an agile transformation
Business agility is, in fact, much more than a mixture of methods or tools. It is a holistic approach to the transformation of organisations. It is transversal at all hierarchical and business levels. “It is an enterprise project and not just a business project ,” emphasises Eric Ducasse. It challenges existing paradigms, and is inseparable from corporate culture. And changing habits, beliefs and mentalities is the most complex task! Additionally, basing your strategy on tools, practices and frameworks, rather than culture, is one of the main reasons most agile transformations fail…
To overcome these difficulties, we must take the necessary time to train directors, managers and employees. In this sense, our experts support their clients towards end-to-end agility, at the strategic, tactical and operational levels.
Beyond training, Arie van Bennekum emphasises the difficulty for coaches and change agents to provide the right level of support by guiding clients with confidence, without telling them what to do.
4. The 4 levers to deploy your business agility
If there is no standard model for business agility, and if we don’t have just one example of agile organisation, the question really is: where to start? Here are four major components of business agility that you can take action on.
The role of management in driving change towards business agility
For Eric Ducasse, the first step lies in the alignment of top management. It will be up to the management to encourage everyone to embark on the adventure. This top-down approach will be better understood and accepted when management is a driving force and shows the example of its managerial agility. A point of view also shared by Arie van Bennekum, for whom the first responsibility of managers in agile transformation is to be role models.
As a result, it is fundamental to consider the human factor and the corporate culture. This consists of the company’s identity and history, its common values, customs and operations. Any reorganisation is a waste of time if it is not taken into account. That is why we are convinced of the importance of leading an agile transformation with HR, as experts in change management.
“Our approach begins with an assessment of the organisation, its culture, and its perceptions. We conduct interviews, conduct field observations and analyses, in order to provide our client with an overview. Only then, it becomes a question of setting a shared ambition and moving to an action plan.”
Multidisciplinary teams for an agile organisation
Only a flexible structure can allow the organisation to adapt to an environment with VUCA characteristics (Volatility, Uncertainty, Complexity, Ambiguity). The rigidity of the hierarchical organisation chart and the bureaucracy represent major obstacles to business agility. Decision-making processes are long, sometimes disconnected from the reality on the ground, and reporting takes time …
“Many companies have been built up over the years, like a building that you build floor by floor, but today, when they need to turn around, it becomes very complicated: the liner has become too difficult to maneuver,” analyses Eric Ducasse.
Silos prevent departments from collaborating effectively. Marketing, legal, production, etc.: all disciplines should work together, with a shared goal. They have a need for alignment, but today, these are functions that work separately, with their own culture, their own functioning, their own field of expertise… and the interconnection between them is quite poor.
What if we were to set up cross-functional teams for you, in which we would give you the full confidence to self-organise? Agile, autonomous and responsible teams. The organisation would play the role of facilitator, to give the teams the means to accomplish their missions and to guide them towards a shared vision.
This way of working is also more motivating for individuals. In fact, Daniel Pink explains, in his book Drive, that motivation is based on 3 key elements: autonomy, mastery and purpose. He adds: “The secret to performance (and satisfaction) […] is the deeply human need to lead one’s own life, to learn, to create new things and to improve.”
Arie van Bennekum is also convinced of this. He likes to repeat that “everyone must be the architect of his own life.” This means taking responsibility for individual actions and development. If it is hardly possible to change a person; on the other hand, the profound change comes from the individuals themselves, who will then bring it into their environment. This process is to be encouraged.
Focus your approach on the value chain to reduce time-to-market and make delivery more reliable
Several stages follow one another until the product is put on the market: this is called the value chain or the value stream (value stream in SAFe). A value stream is made up of the activities, systems, tools, people and information flows necessary to deliver a solution that brings value to its end user. This solution can be a physical or digital product, or a service.
A company has as many value streams as it offers its customers. Its organisation should therefore focus on achieving the business objectives associated with each value stream, defined in the form of OKRs.
Modelling the value chain not only optimises it, but also aligns all stakeholders with the common goal. In addition, we can highlight the critical moments when the chain could be interrupted: decision-making, back and forth between management, testing phases, and legal compliance, etc. A shutdown or a rollback because of a fault, would waste valuable time for the company. Stakeholders in these phases should be integrated well upstream in the process.
Eric Ducasse recommends identifying the value chain(s) for which there is an interest in becoming more agile, where the business gains are most obvious and a need for alignment is requested by the teams. Then start by implementing business agility on a first value chain, which will act as a “pilot”, before deploying it to others. This iterative and incremental deployment contributes to increasing the learning curve of the structure.
Design innovative products that meet consumer needs
Management drives change, multidisciplinary teams organise themselves by value chain to efficiently deliver the product to the customer. Another lever on which you can rely to demonstrate business agility is the product innovation and the product’s adequacy with the market (we also speak of Product Market Fit).
“We must always ensure that we bring value” insists Arie van Bennekum, referring to the ability of a company and its business model to adapt to its market and only test and learn approaches can ensure this.
For economic players, it is a question of constantly ensuring that they meet the needs of consumers and of monitoring the arrival of disruptive players (Uber, Airbnb or Netflix have respectively disrupted the urban transport, hospitality, and film rental). It is essential to be innovative, to strengthen the knowledge of your target customer and not to neglect the user research phase. This will allow you to anticipate their expectations, and even exceed them.
Let us take the example of some key players who have demonstrated their innovative capacities: startups. The “Lean Startup” method presented in Eric Ries’ book is based on the concepts of experimentation and the learning cycle. After making your assumptions, you bring your MVP (minimum viable product) to market as quickly as possible in order to test it against reality, measure results, and then improve the product incrementally and iteratively. This continuous innovation enables investments to be minimised and the risk of errors to be reduced.
5. Progress in business agility: the path to follow, from awareness to automation
The 2020 Business Agility Institute report assesses the average maturity of companies in business agility at only 4.8 points out of 10. This score can be explained by the fact that most companies (65%) started their transformation less than 3 years ago. Becoming an agile organisation takes time, as you will understand. You will be able to set up governance, with indicators to measure your progress and to understand objectively where your areas of improvement lie.
Many models exist, we present a few of them in one of our articles on agility at scale. “It is possible to be inspired by them, to twist them and to take the best in each of them to build your own model, but no need to reinvent the wheel!” advises Eric Ducasse. Again, it’s an iterative process where you test and learn.
We’ll remind you of the rest below, the three pillars of Scrum, which are the prerequisites for any continuous improvement process:
- Transparency: tell it like it is.
- Inspection: evaluate the results.
- Adaptation: draw the consequences and readjust your trajectory.
Constant effort will be needed so that old habits do not creep back into their place. Over time, an in-depth change can take place and agile automatisms will be anchored in cultures and practices.