Is agility a skill or a process
Agility in the company - The fine art of dealing with dynamics and complexity
Agility is a key competence for companies in the 21st century and an essential cornerstone for the successful design of your digital transformation.
But what does “agile” mean in a business context and how can you explain and describe agility?
In this post I offer you different perspectives on the term agility. With the aim that you can then formulate an answer for yourself about what agility is and how this new competence can help your company.
- Clarification of terms and definition of agility
- Historical development of our current understanding of agility
- Why agility - indispensable in the course of digitization
- Agility as a cultural challenge - “Doing Agile” vs “Being Agile”
- When agility bears fruit
Definition of agility - what does being agile mean?
Agilis (Latin) = agile, agile, nimble
Agility is the ability of a company to adjust its business model and organization to new market requirements and opportunities that arise in a short period of time. That means, being agile means on the one hand reactive, flexible and adaptable and at the same time proactive, initiative and anticipatory to act.
Changes are therefore an implicit part of an agile organization and do not have to be initiated by change programs or by management. In addition, agile organizations can better manage the tension between the exploit and the further development of their business model (explore).
Flexibility, adaptability and agility
Agility is often equated with flexibility and adaptability. Flexibility and adaptability are defining characteristics of agility. However, every economically successful company is flexible and adaptable. But that doesn't make them agile.
Take a look at the history of Nokia, for example. Was Nokia adaptable? Yes, Nokia also produces smartphones today. It "only" took a near bankruptcy and a few years. This means that the speed with which decisions are made and adjustments are made are a central characteristic of agility. It is only the interplay of adaptability and speed that transform a flexible company into an agile company. At least if adjustments are also in the interests of the market and customers.
More agile miss (t) understanding
Confusing flexibility and agility leads to further misunderstandings. Therefore, here are my “best of” things that are certainly worthwhile and worth striving for, but which are guaranteed to have nothing to do with agility:
- Home office
- Digital tools and tools
- Hip offices, open work areas, foosball tables
- “Just do it” and have no plan
- Non-binding and short-term postponements
- Lots of colorful posters on the walls with as many foreign words as possible and VUCA blabla
Agility is an entrepreneurial skill that goes far beyond changes in the environment and behavior. As we will see below, a company is only really agile if a culture is permanently lived that demands and promotes permanent further development.
Historical development - from the AGIL scheme to OKR
Agility is not something that was reinvented in the 21st century. Rather, the AGIL scheme (1950s), the lean philosophy (1980s), the first agile methods (from the 1990s) and the agile manifesto (2001) are important milestones on the way to our understanding of agility today.
in the AGIL schemethe American sociologist Talcott Parsons formulated the fundamentals of systems theory in the 1950s. Accordingly, a self-sustaining social system must have four abilities.
- A.daptation - reacting to external conditions.
- Goal Attainment- pursuing common goals.
- I.Integration - creating a community.
- L.atency - maintaining a cultural value system.
In the 1980s, Japanese automakers shocked their European and US competitors with their lean manufacturing approach. At the core of Lean Management is a radical customer focus, the avoidance of any waste, the desire for constant improvement and a commitment to unconditional quality. These central lean principles were an important influencing factor of the first agile methods in software development in the 1990s (Scrum, Extreme Programming).
In 2001 the founders of the modern agile movement imagile manifesto Drafted guiding principles for collaboration in agile teams. With the publications of “Lean Startup” (2008) and “How Google sets goals: OKR” (2013), agility finally arrived in the business mainstream. Today there is hardly a company that does not deal with the introduction of agility in the company.
Why agile? - Agility as a new key competence
Why are so many companies busy adopting agility? Because they notice that their current organization is unable to find an answer to the increasing complexity and dynamics that are triggered above all by digital transformation.
The new VUKA world contrasts with organizations that have grown large and successful under stable framework conditions (SSEE). Companies recognize that, while their organization is very good at efficiently executing a known business model. But less good at dealing with high dynamics.
Because in the past century markets were largely sluggish, industrial boundaries were clearly marked and globalization offered sufficient space to be successful with a “more from the same” strategy. Taylorism and a focus on efficiencies dominated management thinking. This mental model has produced companies that work like clockwork. At least as long as the external conditions are stable and predictable. However, digitization and networked value creation require a rethink in every company.
Digital transformation requires agile competence
Today, the digital transformation has fundamentally changed the framework conditions for companies.
- Intense competition and interchangeable products lead to falling prices. The closest competitor is just a click away.
- Labor-intensive and therefore error-prone processes in connection with rising personnel costs lead companies to their profitability and load limits.
- Digital and networked value creation requires a new form of cross-departmental organization and synchronization.
- Technology corporations and startups are penetrating established markets and attracting customers with lean added value and a better customer experience.
- Software, IT and digital competence are elementary business skills.
- Rapid technology development enables disruptive innovations and turns added value and business models upside down.
These developments, the associated dynamics and complexity present companies with a classic and central structure with almost insoluble challenges. And agility enables a company to be successful even under these framework conditions.
Agility as a cultural challenge- “doing” vs “being” agile
Agile is the best kept management secret in the world.
Agility is a structural challenge that relies on decentralization instead of centralization. This means that employees have a high degree of autonomy in making decisions. At the same time, agile management with visions and goals offers a content framework that ensures that everyone is heading in the same direction.
This requires new structures and tools, but above all a new attitude. Unfortunately, agility is too often reduced to a few practices and methods. However, agility goes well beyond environmental and behavioral conditions and requires permanent rethinking on a cultural level. Focusing solely on learning new skills is not a sufficient basis for sustainable change.
Agile pyramid - the building blocks of agility
The agile pyramid helps you to gain an understanding of what characterizes agility. In the truest sense of the word, agile methods and tools are just the tip of the pyramid (“Doing Agile”). However, since methods are clearly visible, they are often the first point of contact an organization has with the topic of agility. However, these practices are based on fundamental agile values and principles (“Being Agile”).
Agile methods are concrete procedural models of how companies and teams organize themselves. These include, for example, process models such as Scrum, OKR, and Kanban. Or also practices and behavioral rituals, such as a “stand-up meeting” or retrospectives. Both practices and methods are very clearly visible and very easy to understand. That is why companies almost always start their agile journey by imparting agile methodological skills.
Agile principles describe generally applicable rules of the game for working under agile conditions.
- Customer focus: Alignment of value streams and processes with the customer, new services and products are developed with the active involvement of the customer.
- Authorized and cross-functional teams: Decisions are decentralized and placed in the hands of the team, teams have all the competencies and resources to carry out their tasks.
- Review and adjustment: Working under high uncertainty is an empirical learning process. This means that teams check their content, invite feedback and optimize their collaboration.
- Tact and continuity: The collaboration and synchronization of different teams follows a clearly defined rhythm, typically in a 1-3 month interval.
- Guiding principles and visions: This is perhaps the most critical and most important point for implementing agility in a company. A company needs common models based on a purpose, values and long-term goals for the organization.
In this advanced article you will find a detailed explanation of agile principles.
After all, agile values describe personal guiding principles for working together in agile teams. In this advanced article you will find a detailed explanation of agile values.
- openness: Information is shared and made freely available.
- Learn: Each individual is motivated by the desire and goal for continuous improvement, also known as “Kaizen” in Japanese Lean philosophy.
- Commitment. Employees act independently and with commitment. The value of self-commitment culminates in the “principle of two feet”, which means that employees are voluntarily at work.
- focus: Everyone works in a focused and concentrated manner on a few tasks instead of getting lost in multitasking.
- Courage / encouragement: Team members have the courage to research new things and encourage each other not to be perfect.
- diversity: Different opinions, perspectives and competencies are enriching.
Agile principles and agile values are the cultural basis on which an agile transformation can flourish. Without an understanding of these basic guiding principles, it is difficult to implement agility permanently and sustainably in an organization. And that's why agility always requires the willingness to transform a company's identity and culture.
When agility finally bears fruit
Agility in the company is not just an answer to increasing complexity and dynamism. But being agile creates real value. You make employees much more responsible for what they pay back to your company with more commitment. You are faster on the market with your services because you develop and test very closely with the customer.
If your company tries more, it will be more innovative over the long term. And finally, the high level of continuity and process discipline lead to more quality and higher productivity.
Conclusion - agility is your (only) answer to digitization
Agility is one of the most important competencies for companies in the 21st century. And mastering the challenges of digitization is a key success factor. Being agile means much more than being adaptable and flexible. Because agile companies are in permanent synchronization with the market, can realign themselves at short notice and proactively create new opportunities. Even without having to rely on a central control system.
A differentiated understanding of agile methods, values and principles is essential for the success of agility in a company. While agile methods are easy to understand and can be conveyed, a sustainable agile transformation also requires a cultural change. And if that succeeds, then agility is a competitive advantage that is difficult to copy.
Good luck with that.
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