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A Framework for Achieving Business Agility

Advice about how to achieve business agility seems to be everywhere these days. If you believe the hype, business agility is the silver bullet solution to all of an organization’s strategic challenges and it can be achieved with just a few minor tweaks and the purchase of the right piece of software.  But of course, there are no silver bullet solutions.  So, what exactly is business agility?  What are the elements, how do you achieve them, and what are the pitfalls? This guide explores those questions, and while it can’t promise an easy answer to all your strategic challenges, it can offer a framework that will help.

What is business agility?

Business agility is the ability to recognize when there is a need to adjust and adapt direction, strategic priorities and / or goals and objectives in response to emerging opportunities or threats, and then to implement that response effectively, efficiently, and with the minimum amount of disruption.  Think of an agile business as a jet ski, turning at a moment’s notice and responding to rider requests instantly.  Then compare that with a traditional organizational model that is more like an oil tanker, taking a long time to respond to changes in direction.  By the time you’ve seen the dangers ahead, it’s too late to do anything about it.

Business agility is an essential capability for organizations to have in today’s world.  The need to change is constant, driven by competitors, customers, environmental factors, emerging technologies and many more.  Unless organizations can identify when they need to adjust, define those adjustments accurately, implement them quickly and leverage them to optimize benefits, they will be unable to consistently deliver exceptional performance.  More significantly, they will be able to deliver business transformation, an essential aspect of modern business which must continuously evolve and transform itself to stay relevant.

The problem is, business agility can be difficult to achieve.

Business agility vs. business transformation

The business agility concept can also cause confusion, in particular with the concept of business transformation.  The two are very different, but they are closely related.  Business transformation, as the name suggests, is the transformation of how organizations operate in order to optimize performance.  That is critical in today’s world because environments are constantly evolving and changing.

Business agility is achieved by mastering a collection of processes that can then be leveraged to not just respond to disruption, but to master strategic planning and delivery.  By supporting the ability of organizations to both effectively and efficiently respond to emerging threats and opportunities, and to deliver optimized planning, replanning and delivery, the ability to successfully transform an organization is enhanced.  Business agility is therefore an essential contributor to business transformation, and achieving transformation without first developing an environment that embraces business agility is virtually impossible.

Implementing Agile doesn’t mean you have business agility

Many organizations find it difficult to achieve that, instead trying to force all work to be delivered using the same approach.  In recent years this has become apparent with the large number of agile transformations that have been attempted.  These initiatives almost always fail because not all work is optimally aligned with agile approaches.  Agile transformations also frequently end up being bottom-up driven endeavors that fail to align work with strategic priorities.  Unless organizations recognize that multiple work execution approaches are needed, and unless they invest in solutions that allow those approaches to be managed centrally, they will never be able to deliver business agility.

Challenges to achieving business agility

While the challenges and barriers to business agility are significant in many organizations, they can be overcome.  And while the solution isn’t easy, it is relatively straightforward.  Many organizations are finding success in finally attaining business agility through the use of strategic portfolio management tools and processes.  Gartner and Forrester have recently recognized this as the missing piece of strategy execution in many organizations, and it serves to address many of the barriers to business agility while also enabling many of the benefits of the approach.

6 essential components of an Agile Business Framework

  1. Alignment of all investments with strategy
  2. Connecting all silos
  3. Aligning and optimizing resources
  4. Orchestrating strategic roadmaps at the macro level
  5. Managing to clearly defined outcomes
  6. Responding to any disruption

Let’s explore how these elements help you overcome the barriers to business agility and enable your organization’s ability to embrace and leverage the concept.

1. Alignment of all investments with strategy

While many think the key to an agile business is adopting bottom-up approaches to execution, it’s actually more important that they drive everything from the top of the organization down.  Everything starts with the strategic priorities, goals and objectives, with investments derived and funded directly from those strategic priorities.  With a single source of all strategic work the process of communicating those priorities and investments across the organization becomes easier, helping to ensure that every stakeholder is managing to a common set of priorities and can take the appropriate action at all times.

This single, integrated approach to strategic planning and funding also makes it easier to respond to emerging opportunities and threats.  Any adjustments to priorities, goals and objectives are immediately reflected in the investments derived from those adjusted priorities.  With all areas of the business working from this single set of priorities the impacts and required actions become better understood and the likelihood of misalignment is virtually eliminated.

2. Connecting all silos

Most organizations are little more than a series of disconnected silos. Without a connected map of every element of your business, you will never be able to create and sustain true business agility. Unless every element of that business is integrated there is no visibility into how every investment you make – in any initiative or asset, is connected to other parts of your business.

By prioritizing the role of enterprise architecture, you can provide visibility into all the moving parts of your business while holistically designing an integrated approach that optimizes the ability to execute on strategy by combining people, process and technology.  This visibility spans not just discretionary investments, but all portfolios of work, assets, capabilities, technologies, and so on.

Having this integrated view of everything, combined with the focus on aligning all business aspects to deliver the organizational priorities, breaks down the silos in your organization and connects previously disconnected business areas with a common purpose and approach.  All business areas share a common understanding of what needs to be achieved, and how to achieve it.  When things change, as they inevitably will, that common understanding shifts across those same business areas as a single, integrated evolution.  This delivers benefits in all areas – simplifying the management of dependencies, eliminating disconnects between work, and improving visibility into all work at all times.

3. Aligning and optimizing resources

When all investments are derived from a single place – your strategic priorities, it becomes much more straightforward to align all of your financial and people expenditures.  By having a consolidated and centralized view of all work – discretionary and operational, no matter how it’s executed – you can ensure that the right work is scheduled at the right time to optimize the ability to leverage your resources.

At the same time, the process of refining and adjusting allocations of people and money to investments as assumptions and projections are replaced with actual data and updated forecasts, becomes more straightforward because again, everything is managed from one place.  This results in a streamlined resource management approach that minimizes wastage caused by adjustments and disruption and maximizes the ability to generate an optimal return on every asset.

4. Orchestrating strategic roadmaps at the macro level

Roadmaps are a great tool for communicating with all levels of the organization.  They are intuitive, can convey a lot of information in a single visualization, and are easy to create and update.  However, they must be integrated across your entire organization.  To optimize the ability to convey information and understand everything from relationships, dependencies and milestones, your roadmaps must be generated directly from your strategic priorities and updated to reflect actual performance.

When that is achieved you have a single source of truth and are able to manage the communication of all strategy related information to all stakeholders, ensuring a common understanding.  At the same time, you have the ability to set relevant context for specialized stakeholders – financial focus for Finance for example, without having to generate additional material.

Further, you are enabling the ability to deliver work using any of the tri-modal realities, leaving your delivery teams with the freedom to deliver in ways that work best for them, without compromising the ability to manage that work effectively.  Regardless of how work is being delivered by execution teams, the strategic roadmap keeps everyone aligned with the strategic priorities and ensures a common understanding of not just what is being done, but also why.

5. Managing to clearly defined outcomes

Having the right strategic priorities is critical, and being able to define all work directly from those strategies helps build alignment across all of your organization.  But you still have to deliver, no matter how much your priorities and investments evolve.  This helps ensure you are defining appropriate metrics for all strategies, defining and applying appropriate measurement criteria (both financial and non-financial), and tracking actual performance.

This is an area where even the best organizations struggle.  Measurement of actual performance, especially for non-financial metrics becomes little more than guesswork, if it even happens at all.  But performance measurement is the only way of ensuring your investment decisions are generating the expected return and you cannot pursue business agility unless you are sure that it is generating optimal performance for your business.

6. Responding to any disruption

Your organization will need to adjust to changing circumstances.  There will be new opportunities and emerging threats that demand a response.  That’s the entire purpose behind a successful business agility environment.  But you need to be able to respond in the right way, at the right time.  It’s this ability to deliver strategic scenario planning or what-if analysis to understand and assess the various options available to evolve your portfolios that will enable you to make better decisions, faster.

You need to be able to apply this discipline to all assets – products, capabilities, projects and any other portfolio that needs to be managed.  And you need to be able to make decisions quickly, and implement those decisions, confident that they are the right ones and that the impacts and implications are understood.

Business agility requires effective communication

Having leaders set appropriate strategic priorities, goals and objectives is fine.  Recognizing when there is a need or opportunity to adjust those priorities is great.  But unless the organization can communicate those priorities, and any changes in them quickly, efficiently and with total clarity to all business areas, nothing will be achieved.

Unless everyone is pulling in the same direction the organization has functions standing on the brake while it is attempting to accelerate, lowering the pace of transformation and progress and creating friction within the business.  That makes it harder to achieve the goals of business agility – the ability to change direction instantly and without disruption when needed, and to recognize when opportunities and threats emerge without any delay.

Business agility embraces the fact that the targets you need to achieve are constantly evolving and shifting, and allows an organization to respond to those changes in real time, ensuring that everything you do optimizes your ability to deliver what you need.  This requires the right communication vehicles, processes and tools to support clear and consistent communication across the organization, to help ensure that all business areas are aligned with all organizational priorities at all times.

The bottom line

Business agility is a fundamental requirement to drive optimal business performance in today’s world.  Yet the barriers and obstacles that have to be overcome have proven too much for many organizations.  There’s no silver bullet solution that will deliver it overnight, but by combining a commitment to evolving culture, a focus on achieving success, education of staff and the right combination of business process and the right integrated software, UMT360’s clients have been able to achieve business agility.  And they’re leveraging it to transform their business and achieve exceptional levels of performance.

Business agility isn’t achieved just through a piece of software, though many vendors would like you to think so.  It requires a structured approach to guide your investment in people, processes and tools and we have that framework to support our world-class software solution.  But it also requires a tangible commitment from you – a willingness to invest in leading capabilities that will evolve over time to a series of best practices that deliver and maintain business agility, in turn providing you a springboard to transform your business.

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