Enterprise agility is a must in the age of digital disruption for businesses to survive, says ThoughtWorks, a US-based consulting firm.
"Today customers are more demanding and highly expectant, as digital technology gives them more choices and information, which challenges businesses," said Sunil Mundra, principal consultant for advisory at ThoughtWorks and author of the 'Enterprise Agility: Being Agile in a Changing World' report.
To stay competitive, firms need enterprise agility, which is a minimum set of capacities in terms of business context and ecosystem, adapting to change and responding.
Some global organisations like Microsoft, Apple, Google and Amazon are flexible enough to adapt and have additional capability for innovation, Mr Mundra said.
Global banks like ING, or startups like Netflix, or even governments like those of Singapore and Britain, also embrace agility and technology to be proactive about disruption, offering a positive customer or citizen experience and evolving rather than reacting to change.
Businesses need the entire organisation to be agile to change, starting from leaders' mindset to facilitate the culture and business process by eliminating silo processes and collaboration among different functions to make everyone have a common goal in "delivering value to customers" as an outcome rather than traditional key performance indicators.
This mindset helps to shift businesses to be more customer-centric and continue to improve. Enterprise agility focuses on outcomes and value creation rather than traditional processes focused on activities and output.
For example, manufacturing focuses on repetitive tasks and output to increase efficiency, while modern agility manufacturing focuses on knowledge effectiveness and predictive capability.
Business leaders need to share the big picture to get their employees engaged and get them involved in how they can help employees solve problems by listening to feedback.
"By having agility, a business fails three times less as businesses get response and feedback and make improvements before it is too late compared with traditional organisations, which make the leader acknowledge the problem before employees can fix it," Mr Mundra said.
Enterprises also need to be like "living businesses" that are healthy.
Mr Mundra said firms that embrace "agile development methodology" make enterprise changes based on customer requirements.
If an entire enterprise is not agile, those silo functions will hold back agile development of each part of the business, he said.
For enterprises with 3,000-5,000 employees, it takes 2-5 years to transition into an agile organisation.
Agility requires every level of the business to be open to change because digital technology has lowered the barriers to entry for startups. WhatsApp shook up the international telecom field, while Airbnb disrupted the hotel business.
"Every business sector might face disruptions from newcomers in cross sectors, so being agile is critical for survival," Mr Mundra said.
Making each business function with more agility is similar to having multiple startups in the enterprise.
Agility also brings tangible and intangible benefits, such as better quality of products or services, increased customer satisfaction and preventive action.
A high-agility organisation will have purpose as its primary motive, a flexible network structure, a people-driven working style, empowering leadership and outcome-centric, in-team organisation instead of roles focused on value as a primary outcome, not efficiency.
Moreover, in a high-agility business, technology has a strategic rather than tactical role, and governance is value-driven not compliance-driven.
"As we live in a VUCA (volatility, uncertainty, complexity, ambiguity) world, this makes the agility of a business become a foundation and critical element," Mr Mundra said.
