Business Agility

Business Agility in Times of Crisis

Next Story

Coronavirus is Reshaping the way Companies Think About Work

Times of crisis put your planning and preparation to the test and tell you just how agile you really are.  For the past few years, corporate leaders across all industries have been intently focused on achieving an increased state of business agility – the ability to respond better and adapt to changes in the environment, exploit opportunities and defend against threats.  Methods like Scrum, DevOps, and SAFe have been employed to help IT become more agile. Digital transformation, machine learning, and artificial intelligence have been used to increase the agility of business functions and the decision-making process. That’s the idea, at least.  The COVID-19 pandemic is testing the effectiveness of these investments, and the world will soon know which companies are agile and which are not.  

Business Agility is all About Adapting to Changing Events

adapt to changeBusiness agility isn’t about productivity, efficiency, and cost savings – even though these are the justifications that many leaders gave to support their investments in agile investments like digital transformation and machine learning.  Business agility is the ability to identify and adapt to changing conditions in your environment. In the modern business world, things are continually evolving – competitors are changing their offers, customers change their preferences, governments change regulations, technology changes, market forces change, the list goes on.  

For a company to be successful in competing in a dynamic environment, you need the capability, supported by tools, processes, people, and skills to identify what is changing, assess it’s relevance to your business, evaluate your options, make informed decisions and execute your response.  Because change is happening so fast, you need to be able to do these things quickly to exploit opportunities, mitigate risks, and optimize your operations for peak performance.  

The Known and the Unknown

The known and unknown changes due to CoronavirusSome changes in your business environment can be anticipated.  You may not know when something will happen, but you know it will happen someday.  Employees will leave, new ones will be hired. Equipment will wear out or become obsolete and need to be replaced. IT systems will break and need repair.  Customer preferences for your products and services will change, and you will need to develop and introduce new offerings. These changes are the things you can plan for. While business agility can help you minimize the disruption of these changes, it isn’t essential.  If you know what is going to happen, you just need diligent planning.

Other changes in your business environment can’t be anticipated.  Natural Disasters, political unrest, changes in governmental regulations, major disruptions to your supply chain, labor strikes, new competitors in the market, and yes… disease.  What makes these changes difficult to manage is that, while you may have a general idea of the type of change/risk that could occur, you can’t effectively predict the impact, timing, or situational specifics to plan a response in advance.  There are also so many possible things that could happen, and it isn’t practical to plan for everything that could occur. These unexplained events and changes must be dealt with in real-time as they occur. That is where business agility comes in. 

Perfect Storm of Business Disruption

The COVID-19 pandemic isn’t just a health crisis. It is a perfect storm of business disruption.  For large enterprises – workers can’t come into the office for fear of spreading the virus. Business travel is halted. Customer’s businesses are disrupted (impacting demand). Global supply chains are disrupted. Government regulations are changing daily, and customer demand for products and services look nothing like forecasts.  For publicly traded companies, the stock market is tanking. Companies are forced to miss financial performance targets and revise expectations with shareholders – all leading to increased market volatility.

For many small businesses – governments are effectively mandating a shut-down, meaning disruption to revenue, cash flow disruptions, and the need to potentially lay-off workers.  Small businesses with fixed costs, such as facility rent, may be forced to close permanently if additional financing options aren’t made available. If the crisis persists, many businesses will struggle with “restarting” in the future – re-hiring workers, re-stocking inventory, and re-establishing customer loyalty.  

Will you Pass the Agility Test?

Pass or fail business agility?The current situation is compounded by the lack of information about the underlying virus, how it spreads, how to prevent it, and how long the disruption will last.  Companies are in a holding pattern, unable to plan for the future because they don’t know when that future will arrive. Business agility is no longer a luxury, it is a business necessity.  Leaders are forced to make real-time decisions based on whatever information is available, because there is no other option. Companies that have developed agile processes and systems to support decision making are better equipped to respond to the COVID-19 crisis.  Those companies that have either failed to invest in agility or failed in the transformation are in trouble. Some will learn and catch up quickly, others will go out of business during the crisis. It doesn’t matter what claims have been made in the past; COVID-19 is putting your business agility to the test.  Will you pass, or will you fail? We will soon see.

Stay safe, stay healthy, wash your hands.

Summary:

Business Agility in Times of Crisis

Business Agility is all About Adapting to Changing Events. Some changes in your business environment can be anticipated. You may not know when something will happen, but you know it will happen someday. While business agility can help you minimize the disruption of these changes, it isn’t essential. If you know what is going to happen, you just need diligent planning. Other changes in your business environment can’t be anticipated. Natural Disasters, political unrest, changes in governmental regulations, major disruptions to your supply chain, labor strikes, new competitors in the market, and yes… disease. The COVID-19 pandemic isn’t just a health crisis. It is a perfect storm of business disruption. For large enterprises – workers can’t come into the office for fear of spreading the virus. Business travel is halted. Customer’s businesses are disrupted (impacting demand). Global supply chains are disrupted. Government regulations are changing daily, and customer demand for products and services look nothing like forecasts. For publicly traded companies, the stock market is tanking. Companies are forced to miss financial performance targets and revise expectations with shareholders – all leading to increased market volatility.

The following two tabs change content below.
mm

William Goddard

William Goddard is the founder and Chief Motivator at IT Chronicles. His passion for anything remotely associated with IT and the value it delivers to the business through people and technology is almost like a sickness. He gets it! And wants the world to understand the value of being a technology focused business in a technological world.