So many things have been written and said about Lean and Agile practices in the last 20 years that the mere mention of business agility will make the eyes of most enthusiastic supporters glaze over. Are we past the point of being able to distinguish between signal and noise? Does it really even show results, at scale, in any company? Can you prove it? Why bother with it at all?
The truth is that if you don’t bother with it, you may be in bigger trouble than you know. The imperative for business agility has never been more urgent. There are numerous studies that show the direct correlation between business agility and competitive advantage. The better you are at business agility, the more you outpace your competition. In government, the same correlation exists between business agility and accomplishing the mission or serving constituents.
Irrespective of organization type, if you do not have a plan for increasing business agility, you should. Even the best laid plans can fall apart when implemented. Our 2021 CGI Client Global Insights show that only 20% of executives are producing the intended digital transformation results at the enterprise level. How is this possible? Well, because many organizations still use traditional models and systems where empirical data show these approaches no longer produce the intended result. New business models and new types of competition are disrupting traditional ways of working and managing. For organizations to remain competitive, they must adjust accordingly.
Competitive disruption is driving our need to pivot
From the 1950’s to the 1980’s, we had classical competition with monopolies and resource-based firms. Market disruptions like Lean and Six Sigma drove a subsequent period of hyper competition in the ‘80’s to ‘90’s. This period of hyper competition underpinned the birth of agile.
Fast forward to 2021. Over the last ten years, classical resource-based competition has been eroded by commoditization and social action. Value streams and value chains have morphed into value webs, which are characterized by complex, connected and interdependent relationships. Today, we see a new type of player in the mix: obstreperous or highly disruptive competitors. Entering the marketplace with noisiness and unruliness, disruptive competition is characterized by pervasive innovation over short, punctuated cycles. Thriving in this environment depends on your ability to react and respond in a focused manner.
It is now even more urgent for companies to realize the benefits that a well-executed business agility strategy provides. While organizations have invested heavily in becoming digital, many of them do not enjoy the benefits of these investments. This is because they lack true business agility.
The role of business agility
The role of business agility is not simply to create value. The role of business agility is to enable companies to create long-lasting, competitive advantages that ensure success in a turbulent marketplace. So, let’s redefine business agility in a way that will help close the gap between strategic intent and successful achievement of the desired outcome.
There’s been a lot of hype about business agility and many attempts to oversimplify something that is complex. Even trusted defenders of knowledge have been trying to sell agile as something that’s easy. While business agility is indeed complex, the good news is it’s explainable and achievable.
Agile plus digital
At CGI, we believe the journey to business agility has two critical components: agile and digital. If you don’t do agile well, you can’t achieve true business agility; along the same vein, without a successful digital transformation, organizations cannot achieve business agility. The agile component is not about which method you choose to instantiate agility. Agile is about your ability to execute and scale the chosen model with efficiency.
The digital component is not a thing or a method. It’s about moving to an operating model that is data driven. Becoming a digital organization is about what you do with your data and how to make meaningful sense from it. This digital component is both critical and difficult. 82% of business executives cite that their biggest hurdles to digital adoption are legacy processes and system constraints according to the 2021 CGI Client Global Insights.
Once you master agile and digital, get ready to catapult yourself into the competitive advantage stratosphere by leveraging the four forces of innovation. These are Operational, Product, Strategy, and Management innovation. While each of these is essential, the most significant exponential increase in competitive advantage is the result of thoughtful management innovation. While not a new concept, management innovation is a marked departure from traditional management principles, processes, and practices. Management innovation alters how work is done by operationalizing innovative, digital-first management principles.
Business agility – why bother?
If you want to be competitive, it’s no longer optional. There is a direct correlation between business agility done well and highly competitive businesses. Even a complex challenge can be explained, understood, and executed successfully. At CGI we know this because we stand with clients and guide them through this complexity daily. Our insights are forged by being, first and foremost, practitioners.