Why and how to foster this key capability in your Organisation
Disruption, first digital disruption and now business disruption in the wake of COVID-19, has become the rule rather than the exception, making this a critical time for organizations to reassess their digital transformation strategies as well as core competencies and capabilities.
While transformation is often thought of as a one-time change, the journey is never truly finished, and organizations need to build capabilities that will allow them to continuously transform. Organizations with this intrinsic agility will respond faster to change, already possessing the adaptability to move quickly towards the next hurdle or the next finishing line — akin to being the first off the blocks in the 100m sprint or even starting 5m ahead of the pack.
Mastering enterprise agility can not only accelerate digital transformation journeys but accelerate many other new journeys as well. Thus, enterprise agility should not be considered just a sub-set of a digital transformation strategy, but an overarching business strategy by itself.
Enterprise Agility in action
Enterprise agility is not achieved just by cloud-first strategies or flexible workforce strategies, but via a well-planned, holistic approach across your business and operating model, processes, products and services. Here are some examples:
Agile Business Models – Platform Business Models are intrinsically agile because they enable rapid growth and changes to the ecosystem by relying on external producers and consumers to provide the actual – physical or digital – products, services and social currency. As an example, Apple doesn’t have to do any heavy lifting when operating the app store. New app providers simply add their apps and the platform experiences a virtuous cycle of growth – more apps attract more buyers, and vice versa. This “permissionless innovation” enables friction to be minimized, with participants free to innovate on top of the platform, thereby expanding the platform’s value proposition.
Agile Operating Models – Operating Models are intrinsically agile when they can sense and respond to external stimuli and rapidly reconfigure operating procedures. In 3 steps to developing a risk response advisory system, I talked about how an enterprise-specific PANDCON (i.e., a DEFCON for the pandemic) can help organizations determine a set of pre-configured operating procedures to jump to, as-needed, through the ebbs and flows of the pandemic health waves. More than just a risk advisory system, this is an opportunity advisory system, allowing a business to maximize revenue capture and opportunities at every stage, whether the business disruption is in full force or increasing or decreasing.
Agile Processes – Processes gain agility when they can be software-mined and software-defined. Techniques such as process mining improve process monitoring and optimization, and help organizations understand how things are working and where shifts are possible. Key process performance indicators (KPPIs) show exactly where processes can be improved and optimized. For example, process mining helped Lufthansa reduce delays in airline maintenance work by 15%.
Agile Commerce – Transactions gain agility when you can dynamically price, personalize and sell your offerings based on each and every situation. AI is playing an increasing role here, acting as the embedded intelligence to help guide commerce decisions and offers with personalized, dynamic price calculations. For example, a Fortune 50 tech company gained $400M in incremental revenue via a more efficient quoting process and intelligent, data-driven pricing. On the customer service side, agility comes in the form of dynamic handoffs from intelligent virtual agents to human customer service agents as well as improved sales conversion rates via chat. Smart contracts, enabled via blockchain, open up even more possibilities for intelligent commerce.
Agile Products & Services – Digital services are intrinsically agile when they can scale up or down based on demand and can be designed, deployed, managed and maintained on the fly. Essential ingredients are approaches such as cloud and DevOps, but you can also explore innovative techniques to incorporate flexibility and/or resilience to change. NetFlix, for example, is well-known for its chaos testing, which ensures that developers “are constantly operating in an environment of unreliable services and unexpected outages.” Physical products are intrinsically agile when they incorporate elements such as modular design. Examples are plentiful and include everything from modular phones, to data centers, to autonomous vehicles.
While these examples are compelling on their own merit, when viewed collectively you can start to see the power and possibilities of the agile enterprise and the benefits of building intrinsic agility and adaptability throughout your organization.
Technology, of course, plays a large role in much of this intrinsic agility, which is another key reason why CIOs should work closely with their C-Suite peers to envision the art of the possible for the business. More than just providing technology underpinnings for digital transformation initiatives, it is now critically important for CIOs to bring this enabling technology to unlock the wealth of possibilities for the agile enterprise. It’s time to stop transforming and build transformation in by design.