By Lisa Cavanagh and Si Alhir

85% of enterprise decision-makers say they have a time frame of two years to make significant inroads into digital transformation or they will fall behind their competitors and suffer financially. (IDC)

THE NEW “NORMAL”

The rate of change in business, fueled by the continuous integration and evolution of technology, is increasing exponentially and the trend will only continue. This phenomenon, commonly referred to as digital transformation, is disrupting or is expected to disrupt every business in every industry in ways that most business leaders cannot anticipate.

Brian Solis of Altimeter offers a compelling definition of Digital Transformation:

Digital transformation is the evolving pursuit of innovative and agile business and operational models — fueled by evolving technologies, processes, analytics, and talent capabilities — to create new value and experiences for customers, employees, and stakeholders.

Discussions concerning digital transformation have traditionally focused on process and technology to achieve greater productivity and efficiency. However, what has been less predictable is how this digital transformation has disrupted core business models and cultures, challenging long-standing business practices in ways most organizations are ill-equipped to handle.

At this aggressive pace, an organization’s ability to plan their strategy and execute against it to achieve business outcomes has become more and more difficult, to the point of almost approaching obsolescence. Their plans are only as good as what is clearly understood today and their ability to anticipate future needs is less reliable than in the past. In modern terms, businesses must perform in a volatile, uncertain, complex, and ambiguous (VUCA) environment.

The result? Organizations face the very real possibility of extinction if they don’t begin to evolve in this age of digital transformation.

WHAT IS BUSINESS AGILITY & WHY IS IT NEEDED?

Business Agility is the ability for organizations to continually adapt to ever-evolving technology, business, and cultural demands that influence their business. It is the evolution of an organization and its people, where they shed processes, structures, and behaviors that have been ingrained for many years, allowing them to form highly empowered teams that function in a highly agile manner to achieve business outcomes. These teams must continuously observe, orient, decide and act (OODA, John Boyd) as the environment they operate in continuously changes. By achieving business agility they do not have to attempt to “predict” what the future holds, but rather embrace changes as they encounter them and adapt and even evolve as needed, allowing them to continue to achieve the desired business outcomes.

HOW DOES AN ORGANIZATION ACHIEVE GREATER BUSINESS AGILITY?

There are consistencies in the approach organizations can take to achieve business agility and I will share some of my perspectives in this blog. HOWEVER, it is critical that organizations are not fooled into believing that business agility can be achieved by following a single predefined framework or simply through the implementation of technology. There are definite roles, processes, and technology in play in supporting a highly agile business, but the transformational journey required to infuse business agility into an organization’s DNA is unique to each organization and there are essential “human” factors that cannot be synthesized into a neatly executable plan or software package.

Common areas of focus that need to be considered in this journey are:

1. Organizational strategy – how does the strategy align to drive business agility?
2. Leadership – is C-level leadership engaged and publicly supportive of the need for business agility and the necessary and often difficult decisions that must be made?
3. Culture – does the current culture foster the mindset required to achieve business agility?
4. Execution – is there an understanding of agile practices and the impact of incorporating them into everyday execution?
5. Risk – does the organization have an aptitude for taking and tolerating risk, well beyond managing risk? The new disruptive reality really precludes merely managing risk as an option.

The above are all dimensions of a whole. The key throughout the journey is to apply “stress” to them to achieve the needed integration of each for ultimate success, which involves a pragmatically deliberate approach where change agents advance a digital transformation to achieve greater business agility.

“To survive, we must adapt, but to thrive, we must evolve … Individuals must stress their collectives and collectives must stress their enterprise, but only enough to foster healthy dynamics rather than under-stress or over-stress – healthy dynamics foster invigoration from the bottom up.” (The Antifragility Edge, Sinan Si Alhir, 2016)

Stressing these focus areas requires foundational tenets:

• Awareness – an awareness of the external and internal forces, how the organization is being disrupted, organizational constraints and what may need to change
• Discipline – the staying power to constantly observe what is impacting your business, seek to understand what needs to change and enact the necessary changes to identify how they are or may influence your business
• Courage – the determination to take the actions that are necessary to adapt, to embrace that being uncomfortable is a new reality and to persevere while knowing that there is both the opportunity for gain as well as the potential of loss

Embarking on the journey to achieve greater business agility is not one that should be entered into haphazardly. I also explore these tenets further in my conversations at Catalyzing Business Agility. It is a journey that your organization must take to become more “antifragile,” giving it the ability to “thrive and grow when exposed to volatility, randomness, disorder, and stressors.” (Antifragile: Things That Gain From Disorder, Nassim Nicholas Taleb, 2012)

If the transformation is taken seriously and is not a cursory response to market pressure, the results are real. In fact, it is estimated that organizations that achieve greater business agility are more than twice as likely as the average organizations to achieve top-quartile financial performance. (Accenture)

The age of digital transformation is upon us and the rate of change we are experiencing is our new normal. Now, more than ever, it is time to transform into a highly agile business.

This post is the first in a series of blogs on achieving business agility presented from a technology business partner’s perspective. Interested in hearing more? Let us know.