Defining Enterprise Agility

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Dec 10, 2017
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Enterprise Agility means the ability to adapt easily to change. In the business perspective, agility refers to a distinct quality that allows institutions and corporations to respond rapidly to change. It is the ability and capability of a system to respond rapidly to a certain modification by adapting its inceptive and stable configuration.

Agility is also viewed in relation to the results of organizational intelligence. It is the aptness to react successfully to the emergence of new competitors, abrupt shifts in the overall market conditions, and adaptation of industry-changing technologies that are based on the degree of agility in the organization.

It is a cultured capability that enables a company to respond in a timely, effective, and sustainable means when the changing situations require it. Additionally, it is understood as the capability of an organization to thrive in a competitive environment characterized by continuous and unanticipated market change. It is the aptness to retaliate quickly to the rapidly changing and fragmenting global markets that are served by computer-connected or networked competitors with regimen access to a global production system, cost efficiency, high performance, and customer-tailored goods and services.

Organizational Interpretation of Agility


An organization is said to have long-term business agility if it possesses the following salient features: 

  1. Adaptability
  2. Flexibility 
  3. Balance

Adaptability

Adaptability refers to the vivacity of an organization to quickly assemble its technology, management, and resources through means such as communication and information infrastructures in an effective, intentional, and coordinated response to an increase in changing external and internal environments. The market environment in question needs to be experiencing a continuous and unanticipated change.

In contemporary organizations, continuous change is increasingly becoming a “new normal” phenomenon. For this reason, interest in organizational agility has increased exponentially for managers and corporate personnel. Organizations attempt to adapt and respond to these market changes through coordinated processes and responses, thus making the organization adaptable.

Flexibility

Agility facilitates increased flexibility in the organization. An organization is flexible if it can easily implement its core business objectives in a loose hierarchy and adapt to the rapid changes in the market and global environment. An organization that can easily reshape its cultural and business practices in line with changing circumstances through the contribution and participation of the team members is said to be flexible and fits the description of organizational agility. Organizational agility ensures equal contribution and participation by the team members. There is a team structure that is characterized by role authority where individual members of the team have a role to play in the organization. Efforts contributed by each member to the organization are recognized and encouraged. These organizations focus on a result-driven rewards scheme instead of the predefined KPIs. It also involves the extent to which the organizations can scale its knowledge base and awareness.

Balance

Agility enables organizations to balance both the aspect of control and autonomy through its organizational infrastructure. The organization achieves balance among its core activities when it has acquired the dynamic capabilities in the form of combined competencies and resource development and has created a source of competitive advantage so as to respond rapidly to the changes in the market conditions.

Interpretation

Organizations link agility with the aggressiveness of the firm in managing and adapting to the rapid changes in the market and global environment. It is evident that turbulent environments require organizational agility. Accordingly, to embrace agility, an organization needs to be aggressive in reshaping its culture and business practices.

Organizational scholars argue that agility is an element of larger and complex organizations. According to them, an organization will only achieve agility if it experiences a rigorous change management that better adapts to the shifts in the market conditions. Additionally, the absence of a more collaborative and robust process of managing risks and a lack of a standardized project and portfolio practices means a lack of organizational agility. Therefore, agility is associated with high-performing organizations that seek change not for change’s sake but for the sake of competitive advantage. The existing literature identifies the ability of change as dynamic capability with the potential to track opportunities and threats, change the firm’s resource base, and enhance the problem-solving ability of the firm.

Agility is strategically significant in the sense that although the agile organizations often change, they change for the betterment of the organization. Agile organizations have the capability to strategize and accurately perceive changes in their external environment. Agility, as perceived by organizations, is associated with some routine practices, such as dynamically strategizing, perceiving environmental change, testing responses, and implementing change. These routine practices, when executed over and over again, enable organizations to consistently outpace competitors.

Agile organizations do not interpret strategy the way other companies do. For agile organizations, a strategy has three explicit elements: a change-friendly identity, a sense of shared purpose, and a robust strategic intent that identifies how a firm differentiates itself.

Agility Levels


Agility falls into two major levels:

Team-level agility – This is the level of agility where self-organizing, co-evolution, and interactions are within the members of a given team. The interactions are among the individuals that have a common goal and holding the necessary behaviors, resources, competence, and experience to transform the organization. In the team-level agility, the spontaneous and feedback-driven exchanges occur among the team members within the organization.

Team-level agility emphasizes that the vital initiatives within the organization are managed at the team level and not at the enterprise or organizational level. All parties involved in the team constantly and continuously make decisions without guidance or management from an outside source. The creativity and innovation arise at the team level and grow to affect the organizational performance.

Enterprise-level agility – The enterprise-level agility involves the ability of the entire enterprise to respond rapidly in an innovative and creative manner to changes in the market conditions. It is the ability of the enterprise to facilitate dynamic decision making that supports the trending direction and any emerging competitive advantage. The level of agility in an enterprise is contrary to that of the traditional organizations where there is adherence to sustained competitive advantage.


Author: Adam Alami

Adam Alami is a PhD fellow at the IT University of Copenhagen. Adam has a wealth of experience in information technology practices. He started his career as a software developer, then moved to business analysis and project management. His 20 years’ experience revolves around major business transformation projects and process improvement. He accumulated a wealth of cross industry experience in major projects in the areas of Enterprise Transformation, Integration, Migration, and Systems Modernization.

He has a track of academic achievements. He holds a Bachelor degree on Software Engineering from the Université du Québec à Montréal (UQÀM) and a Master degree on Computing from the University of Technology, Sydney (UTS).

Email: adamalami2016@gmail.com

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