What is Business Agility?
Business Agility is about an organisation’s ability to change and adapt in a complex environment. But what does it mean for a business to be agile and why would they do it? Most definitions dive straight into the what, and how practices can be applied within the organisation, but ‘being Agile’ is not a compelling reason to embark on that journey.
I don’t use a term unless I can explain it. For me the reason we want organisations to be agile is to achieve valuable outcomes for our customers and success for our business, through highly engaged people. That’s why I love this simple and awesome quadrant from Lynne Cazaly, on the importance of having both.
Figure 1: (c)2020 Lynne Cazaly - Used with permission
Although her picture applies to creating successful facilitated meetings, I believe it can be applied much further than that, it’s at the heart of agile itself (she is a genius!). The sweet spot is the top right ‘High Impact’ quadrant. We do Agile because we want to achieve valuable outcomes for our customers with highly engaged people. We want our organisations to be ‘High Impact’. We achieve that by ensuring that outcomes and engagement within our business, balance and feed each other. Customer outcomes enable highly engaged teams through a sense of purpose and achievement. Highly engaged teams that are allowed to tap into their expertise will deliver great outcomes for our customers.
Outputs are the things we produce; products or services we create that should lead to an outcome for our customers. I love the definitions from Christophe Achouiantz, customers don’t want features, they want you to solve their problems or realise an opportunity for them. Those outcomes realise value for the customer that in turn generate an impact to the organisation, typically in the form of a financial return. Organisation’s are in business because of their customers, profit is a consequence of delighting those customers through outcomes. As Peter Drucker famously said “The purpose of the business is to create and keep a customer”
Organisations that don’t focus on outcomes, focus more on the outputs or tasks that need to be done. They lose sight of their purpose and relatedness to the customer they should be serving. These organisations, as Stephen Denning points out, risk becoming an internally-focused and siloed bureaucracy, measuring and focusing outputs, rather than outcomes and effectiveness. Business Agility requires continuous collaboration across traditionally siloed organisational structures. It requires the creation of organisational cross-functional teams.
Employee engagement matters when it comes to creating those organisational cross-functional teams. Really matters. The Business Agility Institute whitepaper on employee engagement concluded that high levels of employee engagement have a direct correlation with success in a volatile marketplace. Organizations that succeed now and into the future will be those that attract, retain and inspire the best people.
A focus on outcomes by themselves is not enough, it needs people to realise those outcomes. Agile does not have a brain, and to be truly effective and understand how to solve a customer problem, or realise an opportunity we need to tap into those people’s own brains and expertise.
The best work comes from highly engaged teams, and for that there needs to be an environment of psychological safety, trust and mutual respect (Amy Edmonson) empowerment exists. Psychological safety is about candour, it is about making it possible for productive disagreement and the free exchange of ideas. A place where people offer their ideas and voice their concerns.
Highly engaged teams also need work that is fulfilling, enjoyable and meaningful. For work to be fulfilling, there needs to be a connection between the work someone is doing and the outcomes it is looking to achieve for the customer. Too often that outcome is obscured or lost through internally-focused systems. The connection to outcomes creates clear purpose and more highly engaged teams. Agile for an organization is about achieving outcomes for the customer as well as the recruitment, growth and retention of the best people. A cross functional organization with clear purpose.
The 4 Quadrants
The Agile organization should look at valuable outcomes for customers and engagement of its people. It should adjust practices, structures and processes - eliminating those things that actively get in the way of moving toward the top right hand quadrant. The key when picking practices is to make sure they will make a difference. Ask yourself -. How does that practice move us along the axis? How do we ensure that it does not inhibit the other axis? How do we ensure that it is not focussing us on the bottom left, but rather moving us towards the top right?
Figure 2: Business agility Outcomes and Engagement quadrant
These also link to Amy Edmonson’s 4 areas of Psychological Safety, from her book ‘The Fearless Organisation’.
- (Star) Focus on collaboration and learning in the service of high performing outcomes (Learning zone)
- (?) Employees really enjoy working with one another, but don’t feel particularly challenged (Comfort Zone)
- (X) People fear to offer tentative ideas, try new things, or ask colleagues for help, even though they know great work/outcomes requires all 3 (Anxiety Zone)
- (Unhappy) Employees tend to be apathetic and spend their time jockeying for position. Large siloed, bureaucracies (Apathy Zone)
Business Agility to me, is about an organization delivering valuable Outcomes for customers through highly engaged people. This gives an organization the flexibility and agility to allow it to rapidly respond to change in a volatile marketplace. No one part of the organization can achieve that alone, it takes the entire organization and its people.
Categories: Business Agility.