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Prerequisites to Business Agility

DZone's Guide to

Prerequisites to Business Agility

The Darwinian nature of technological advancement means that if you can't keep up, you're getting left behind. Learn business agility here.

· Agile Zone ·
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The term business agility is relatively new and some common misconceptions still exist about it. So, let's start there.

Business agility is a company's ability to sense and respond to change proactively and with confidence to deliver business value as a matter of everyday business. And being able to pivot on a dime is one of the most essential parts. So, let's explore the fundamentals needed before you can successfully venture into business agility.

"We used to pivot too frequently. Frankly, because we could - not because we should." - A Colleague

That does not sound like a deliberate strategy; in this case pivoting could become a disruptive pattern to the organization. So how does a company know when changing course is the right answer? First, you need to understand your business and your customers. These are your prerequisites.

Look Inward: Understanding and Evolving Core Business Capabilities

You need a solid business foundation in your day-to-day operations; otherwise, you may be pivoting without purpose.

When faced with a market disruption, looking inward as the first crucial step. Understanding the business entails having tight business capabilities and the right people that operate them.

A company needs to have a solid understanding of the core capabilities to run its business, e.g., risk management, pricing, fulfillment, supply chain, production, etc. Knowing how to set prices in insurance, for instance, is highly complex and crucial to the financial viability of that type of business. Being able to apply predictive analytics is crucial to help inform product and service decisions.Those capabilities need to be evolved to stay competitive. This is an inward-looking view of the business.

It requires a dedicated effort to enable your organization to assess and find gaps or weaknesses in core capabilities and solve for them. One company recognized that, during their growth and attrition, their business domain knowledge got depleted over time impacting their ability to compete. They are getting back on track, by investing in hiring industry experts to help them rebuild their core business capabilities. This will enable them to be more resilient to disruption, and will actually shape their path to disruptive response. The pivot will be better informed.

Look Outward: Building the Ability to Sense

By the time you find out about a competitive disruptor, it's already too late to pivot!

Consider two organizations, one that is optimized for functional departments, and the other aligned around customer journeys. Which is more likely to anticipate external disruption before it happens?

Understanding the customer entails having a clear understanding of your customer experiences and how they evolve over time. This is core to the concept of pivot, since it is the ability to "sense" changing market needs and anticipate external disruption before it happens.

Smart companies are investing heavily in predictive analytics, to study the behaviors of their customer interactions. One online travel company runs more than a thousand experiments every day to enhance its customer response algorithms. Customers in traditional industries are beginning to expect their interactions to mimic what they experience in social media, Internet of Things devices like Amazon Echo or Google Home, and predictive behavioral predictive processes like Netflix. Technology predictions highlight the potential source of your next disruption. As a consumer, I now expect the same level of interaction and usability from my bank, my insurance company, my telecom provider, and even my government.

Align Your Organization to Respond Faster

What good is a strategy, if you can't execute on it?

Organizations are increasingly focusing on customer journeys as a lens to understand the lifecycle of the customer's experience with the company, and organizing interactions so that products and services support a seamless experience. For example, a bank looks at the customer experience of the end-to-end process of identifying a need for a loan, researching options, application, and repayment. It forces us to think beyond organizational silos and hierarchies, and to have a customer perspective. It is asking the question: "Are we responsive to that customer journey today?" What worked yesterday may not be good enough today with the changing pace of technology interactions. We want to close that gap constantly, to stay ahead of potential disruptors. The pivot becomes a way to respond to evolving customer needs as they interact with our business. Organizing the delivery groups around the customer journey, enables faster response and in addition these formations tend to be more persistent.

This type of organizational alignment is not for the faint of heart, because it challenges organizational structures and reporting relationships. CA Technologies' transformation consulting practice has enabled many large organizations through such business agility journey.

In summary, before venturing into business agility and pivoting, take a look at your business fundamentals. When you have solid core business capabilities, the ability to sense market change and the alignment to respond quickly; then you can pivot confidently and responsibly. You can shape disruption, rather than be shaped by it!

Download the free agile tools checklist from 321 Gang. This guide will help you choose the right agile tools to position your team for success. 

Topics:
agile ,pivot ,business agility ,introspection ,cx

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