How Business Agility is Shaping the Top Companies Around the World
Updated: Nov 24
The term "agile" often evokes thoughts of software development teams, vibrant sticky notes, and unique team rituals. It's commonly perceived as relevant only to specific sectors like IT. However, it's surprising for many to learn that agility in business is now a crucial factor for the success of top-performing global companies, including giants like Amazon, Tesla, and Netflix.
To fully appreciate the importance of agility, we need to look back 66 million years ago to a catastrophic asteroid strike near the Gulf of Mexico. This event led to the extinction of 75% of the planet's species, including dinosaurs. Survivors, mostly small mammals and birds, thrived due to their smaller size, enabling them to quickly find shelter, source food, and reproduce. Their agility in adapting overshadowed the advantages of their larger counterparts.
In nature, the benefit of being large and strong is evident during stable periods, where these traits provide protection from predators, efficient resource gathering, and energy storage for challenging times. However, in periods of upheaval, the ability to adapt swiftly becomes crucial for survival.
This historical perspective is highly relevant in the business context. There was a period when focusing on operational excellence and economies of scale resulted in significant gains for large organizations, allowing them to dominate their markets. However, the modern world is marked by rapid technological progress, deregulation, and interconnectedness, creating a landscape where adaptability and innovation are paramount. This shift has lowered market entry barriers and quickened the pace of change, leading to intense competition and a continuous need for reinvention.
The agility that began in the realm of IT must now be embraced by entire organizations. Merely maintaining efficiency in current offerings is no longer sufficient. The most successful companies today not only maintain their existing products and services but are also adept at creating new ones. Consider why established companies in taxi, photography, and music industries did not create Uber, Instagram, or iTunes, respectively. It's not a lack of creativity but rather systemic challenges that hinder such transformations.
Many business leaders remain focused on the efficient models of the past, overlooking the critical elements of creativity, innovation, and agility that define success in today's environment. This often leads to an overemphasis on exploiting existing products and services at the cost of exploring new avenues. As Peter F. Drucker aptly put, engaging in efficient but irrelevant activities is futile.
Even leaders who understand the necessity of ongoing innovation face challenges. The nature of innovative work differs drastically from operational tasks, and many organizations still prioritize efficiency, leading to rigid structures and bureaucratic processes that stifle creativity and innovation. Changing just the processes, practices, and tools is insufficient; a broader shift towards fostering an environment conducive to organizational agility is needed, focusing on leadership, culture, structure, people, governance, and work methods.
Agility, which originated in software development, has now become a crucial aspect of corporate strategy. Gone are the days when it was limited to IT departments. The most effective companies maintain operational excellence in their established domains while embracing agility in developing new products, services, and business models. They continuously evolve and reinvent, merging the benefits of scale with the flexibility of a startup. This approach defines business agility. Companies that fail to adapt risk becoming obsolete, much like the once-dominant but now extinct tyrannosaurus rex.
If you would like to dive more deeply into Agile Leadership and Business Agility, we have three great options to help you grow in that space:
1) Check out Karim’s best-selling book, The 6 Enablers of Business Agility.
2) Check out Karim’s self-paced, on-demand Agile Leadership & Business Agility course.
3) Attend Karim’s live Certified Agile Leadership (CAL) class.
Originally posted on the Agile Success Academy blog: https://www.agilesuccess.academy/pages/blog?p=business-agility-has-moved-outside-of-it-and-is-shaping-the-top-companies-around-the-world