Business agility relies on strategic thinking

1st September 2022

Business agility relies on strategic thinking

 

Say the word ‘agility’, and people will often assume you are talking about a project or product delivery methodology.  Approaches such as Scrum, Kanban, Dynamic Systems Development Methodology (DSDM) and others can be very effective ways of building products incrementally and iteratively, when they are well embedded within a supportive culture.  However business agility is a broader topic—and while agile project and product delivery is very likely a precursor, alone it is not enough.

One of the key features of agile product development approaches is the ability to get regular feedback from stakeholders and pivot accordingly. This is crucial, as it allows a team to produce products that users will actually use.  However, while this activity is happening, the organisation also needs someone looking outward and forward, scanning the business environment to understand what is likely to happen next. It equally requires someone looking inwards to determine which parts of the organisation are likely to need to change.

Whereas agile product development predominantly involves getting feedback from the product’s immediate environment (e.g. the stakeholders), business agility requires seeking feedback and making predictions about the broader business environment too. Agile product development focuses on delivering products that will be used today and in the near future. Business agility is about forecasting what might happen in the future, and ensuring the organisation can flex to accommodate that.

 

Sensing Business Agility

A good measure of business agility is how long an organisation takes to respond to an opportunity or threat. I saw an excellent example of this recently: a local hotel offers ‘private, air conditioned workstations’ from 9am – 5pm. In reality these ‘private workstations’ are regular hotel rooms with large desks—but if they are empty, and no guests are expected until the evening, why not rent them out during the day too?

Not only this, it turns out that the hotel has been doing this for quite some time. They presumably saw the likely trend of mobile/home workers coming, and decided to seize it. Not only that, if there is less business travel, it is a way of creating an additional revenue stream from existing resources and capabilities.

However, seeing an opportunity is one thing, acting on it is another. There’s nothing stopping other major hotel chains doing this… so why don’t they?  I would guess because they have a standard housekeeping routine that wouldn’t fit, their reservation systems are so ingrained they can’t change them, staff aren’t used to it, and they wouldn’t know how to advertise the service as it isn’t their usual business.

You can imagine a senior manager saying: “that’s a great idea, but we don’t do it that way here” or “ah, there’s so many IT systems and processes to change, it’d be too expensive, we couldn’t ever make that work”.  Phrases like this are a sign of a calcified culture where systems and processes were set in concrete decades ago.  Deciding not to do something because it isn’t aligned with strategy is fine. Being unable to do something because of organisational inertia is problematic.

 

Bring On Strategic Thinking

As I mentioned earlier, business agility relies on regular scanning of the external and internal environments. A key ingredient is to determine which parts of the organisation need to be more flexible than they currently are. If something is potentially going to be a sticking point in the future, then a preemptive project to change it now might be an excellent investment. You probably don’t wait for the oil lamp to show on your car’s dashboard before you check and change the oil. You certainly wouldn’t wait until it grinds to a halt. Yet organisations sometimes do this; there are so many ‘legacy’ products, IT systems and processes out there. It may have been better to replace them when it was ‘important but not urgent’ and there were more time and options.  It doesn’t matter how ‘agile’ the development lifecycle is, if the product being developed is constrained and outdated then the team can still find themselves painted into a corner.

Strategic thinking is often perceived as abstract and detached from the work of practitioners. Yet, taking a macro-level view and focussing on agility will pay dividends in the long run. Organisations that can’t adapt tend to be the ones that fall by the wayside. Those that can flex and adapt quickly are those that survive and thrive.  It seems unlikely that there will be less change in the future, so surely this is worth investing in!

 

by Adrian Reed, Business Analysis Expert