Agile Company

What does it mean to be agile? Being agile means being able to respond adequately to changes.

Why is it important to respond adequately to changes? Because the environment we live in changes all time and it has been changing faster over the years. If we don’t respond adequately to those changes we may end up doing things inadequately, i.e., things that won’t get us to our objectives.

Agile means continuous improvement Being able to respond adequately to changes means that we need to continuously improve the way we do things based on the feedback we gather. Even though the Agile Manifesto is years old, the agile ideas has been around for longer than that. The idea of continuous improvement is part of the basis of the Lean Manufacturing System, which has been around since mid 1980s. In the early 1990s the term Agile Manufacturing was formulated as “a term applied to an organization that has created the processes, tools, and training to enable it to respond quickly to customer needs and market changes while still controlling costs and quality”. So the ability to respond adequately to changes in customer needs or market environment came originally from the manufacturing world.

The agile company Peter Weill, director of the Center for Information Systems Research at the Massachusetts Institute of Technology (MIT), presented “The Agile Paradox” during the MIT CIO Summit in June, This presentation was based on a survey done by Weill and his team with a group of 649 companies and it brings quite interesting facts. The survey shows that agile companies recognized 37% increase in their profit growth while staid companies perceive a 13% decrease.

The Economist Intelligence Unit made a report on “Organizational agility: How business can survive and thrive in turbulent times”. The report is based on a survey with 349 executives around the world on the benefits, challenges and risks associated with creating a more agile organization.

The major findings are: Organizational agility is a core differentiator in today’s rapidly changing business environment. Nearly 90% of executives surveyed by the Economist Intelligence Unit believe that organisational agility is critical for business success. Yet most companies admit they are not flexible enough to compete successfully. More than one-quarter (27%) of respondents say that their organisation is at a competitive disadvantage because it is not agile enough to anticipate fundamental marketplace shifts. Internal barriers stall agile change efforts. More than 80% of survey respondents have undertaken one or more change initiatives to improve agility over the past three years, yet 34% say they have failed to deliver the desired benefits. The main obstacles to improved business responsiveness are: – slow decision-making, – conflicting departmental goals and priorities, – risk-averse cultures and – silo-based information. Technology can play an important supporting role in enabling organisations to become more agile. Technology should function as a change agent in the use and adoption of best-in-class knowledge- sharing processes, so companies can improve their use of critical data.

Also in this report there’s a quote from Weill where he explains why agility is important: “When I was a kid, the most successful companies were monopolies or duopolies, but in today’s globalised, free-market environment, the ability to satisfy customer expectations is core to profitability. If you’re not agile, you can’t do it, because customer expectations are never static.”

A company can be agile if the company: frequently delivers value to customers, employees and shareholders. proactively gathers frequent feedback on what is being delivered and reviews this feedback. adapts accordingly and improves how it delivers value.

Agile methodologies are processes, agile is culture while process is “how things get done”, culture explains “why things should be done that way”. What matters the most is the culture, since without knowing “why” something should be done in some way it is very difficult to follow and maintain that way – the “how” to do those things.