What is Business Agility?

The organizational alignment of leadership, culture, and strategy, focusing on the value provided to stakeholders, is termed “business agility” or “organizational agility.” With change constant in almost every industry, the organization that can quickly adapt to meet changes while still bringing value to stakeholders is positioned for long-term success.

On this page:

Business agility, or organizational agility, refers to a combination of factors that, when enacted consistently at all levels of the business, can increase the chance of success, even in the face of unknown market shifts and changes. Consider these business agility definitions by renowned professional organizations:

“Business Agility is the ability to compete and thrive in the digital age by quickly responding to market changes and emerging opportunities with innovative, digitally-enabled business solutions.” – Scaled Agile Framework

“Business Agility is a set of organizational capabilities, behaviors, and ways of working that affords your business the freedom, flexibility, and resilience to achieve its purpose. No matter what the future brings.”—Business Agility Institute

The Project Management Institute (PMI)® partnered with the Disciplined Agile organization to provide a vetted source for all things Business Agility-related. The Disciplined Agile organization model addresses business operations and systems, project management systems, and infrastructure systems, including but not limited to:

Disciplined Agile Enterprise example components:

People management
Information technology
Finance
Vendor Management
Legal

Value Stream example components:

Strategy
Governance
Marketing
Sales
Product management

Disciplined DevOps example components:

Disciplined Agile Delivery
Security
Data management
IT operations

Business agility is achieved when all team members understand their role in the context of organizational goals. Speed to market, or the ability of the business to react to change quickly and efficiently, is one value of business agility.

Business Agility Processes

PMI’s partner Disciplined Agile (DA), offers the “DA Tool Kit” with four process levels.

The processes encompass every aspect of the business so that the response can be timely and effective when the unknown occurs.

What is an agile business process?

The process levels include ways to customize for an organization’s specific needs. Each process has a particular purpose for enabling agility across the organization.

PMI Disciplined Agile process: Disciplined Agile Enterprise

A Disciplined Agile Enterprise (DAE) has a culture and structure enabling the business to predict and respond to market changes promptly and effectively. A DAE demonstrates innovation powered by lean and agile processes.

PMI Disciplined Agile process: Value streams

A value stream starts and stops with the customer. It is “the set of actions that take place to add value to a customer from the initial request through the realization of value by the customer.” Note that it is not called the value milestone or checkpoint. The “stream” is used explicitly for the concept because value must be prioritized and realized throughout all processes to achieve business agility.

PMI Disciplined Agile process: Disciplined DevOps

Every business utilizes technology and is impacted by the technology used by its vendors and customers. Disciplined DevOps “is the streamlining of IT solution development and IT operations activities, and supporting enterprise-IT activities, to provide more effective outcomes to an organization.”

PMI Disciplined Agile process: Foundation

The Foundation process is the DA tool kit’s bedrock. Within the Foundation are the work processes (agile, lean, and serial/traditional ways of working (WoW)) in addition to people-oriented elements (roles, responsibilities, and teaming structures). To achieve agility, there must be alignment across the business.

Business Agility in Organizations

Historically, top businesses were known for being unchangeable and deeply hierarchical. These traits were admired and likely seen as signs of an organization that would never end. But change is inevitable. And organizations that cannot be agile and adjust to the market will suffer and, in some cases, end.

In today’s world, change happens globally and, in some cases, seemingly instantly. When change occurs at the speed of technology, a business organization must be able to activate transformation at all levels and in sync to remain competitive.

Business agility, when given the full support of the leadership and organization, can make a business ready to deal with changes while never losing sight of the customer’s needs. Innovation and reliability are balanced even in the face of internal and external change.

Benefits of Business Agility

It is safe to say that business agility has a place until the future is predictable. “Businesses that embrace agility are able to adapt faster; delivering regularly…and remaining customer focused.” Business agility benefits a business (and its customers!) in these ways:

Put the customer at the center: with an organization that prioritizes the value brought to the customer, decisions and priorities balance the impact of change with the effects on the customer
Act upon innovation to gain competitive advantage: an organization that can share relevant information across teams and move quickly in response to changes can identify and act upon innovation before the competition
Retain competitive advantage: lessons learned can be quickly determined and acted upon without the burden of bureaucratic layers, thus reacting to market shifts faster than more traditional organizations

The benefit of Business Agility can be summarized as reduced or streamlined organizational structures that enable a timely response to opportunities and threats while prioritizing customer needs.

Risks of Business Agility

Changes can be external: regulations or laws, social, and technology, for example. Or changes can be internal: critical personnel is suddenly unavailable, or a required resource is delayed, for example. An organization that has implemented agility should be able to respond to external and internal changes effectively. But no solution is totally free of risk, and Business Agility is no exception. Without ongoing governance, the risks of Business Agility include:

Short-term wins at the sacrifice of long-term advantage: if all efforts are only on immediate challenges, then critical initiatives requiring longer-term efforts (such as updating technology infrastructure) may be overlooked, putting the organization at risk
Speed over requirements leading to lost customers: teams racing to the finish line may fail to confirm the customer’s needs and requirements, resulting in a deliverable no one wants
Lessons learned are not retained, leading to repeated (and preventable) mistakes: organizations that emphasize speed above all else may fail to capture, share, or act upon lessons learned, so mistakes are repeated with costly results

And for some, too big to fail may be too big to adapt. Existing large businesses with deep hierarchies and layered bureaucracy have an inherent risk if business agility is attempted without a total commitment to it.

How Can You Measure Business Agility?

Through the Scaled Agile organization, businesses and project professionals can find assessment tools for business agility core competencies. The SAFe® Business Agility Assessment measures an organization’s overall agility across seven core competencies. As with all business agility, the specifications of an industry and organization should be factored in when conducting an assessment.

Takeaway

Almost every organization seeks satisfied customers, a competitive advantage, and the ability to adjust to market changes. Business Agility is a means to achieve that, as it is customer-centric, innovation-focused, and responsive to market changes. PMI’s agile partner, Disciplined Agile, is the best source for Business Agility information and the agile discipline with four intertwined processes: Foundation, Disciplined DevOps, Value Streams, and Disciplined Agile Enterprise. Business leaders should know the benefits and tradeoffs of Business Agility to determine the best course of action for their organization.

Agile Business Process: What is Business Agility?