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Lucinda has taught business and information technology and has a PhD in Education.
We all know what it means to be agile, right? It means to be nimble, supple, lithe, sprightly, alert, responsive, swift, or active. So, what in the world does that have to do with organizations or businesses? Let's consider the synonym 'responsive.'
If we owned a business we would want that business to be responsive to customer needs, wouldn't we? So, in effect, that would make our business an agile business. How do we know if our business is responsive or agile?
One thing we could do is a SWOT analysis, which stands for strengths, weaknesses, opportunities, and threats. If a business can identify internal as well as external changes that can affect the company and then act on those changes quickly, that would certainly make it an agile business. The quicker a business can react to these changes, the more agile it is.
Businesses need to be able to adjust or respond quickly to a myriad of potential changes in their business environment. Let's look at a few common examples of how a business might exhibit its agility:
What happens if the business you own has been the only provider of a service in your area, but suddenly a new business comes to town offering the same service? Do you continue business as usual or do you look for ways to differentiate yourself from this newbie? Hopefully you answered that you would differentiate yourself. But how quickly? What if the other company offered an add-on service you never thought of? Can you come up with something similar in a short amount of time so that you don't lose your customers? If a business can make rapid changes due to the arrival of a new competitor, it is most definitely agile. It's important to have enough flexibility in the structure of an organization and its processes so it can adapt quickly, perhaps by offering a new service so that the competition doesn't put it out of business.
What about new technologies? How can a business show its agility when it comes to technology? Technology is constantly changing, and organizations that rely on technology must be able to adapt to new technologies as they become available so that they do not fall behind in their industry. Let's say Brown's Business began making hair dryers forty years ago. They bought machines that did the job. But as the technology for manufacturing processes changes and becomes more efficient, Brown's Business needs to adapt to the new process. It they don't, they are not going to produce as much as their competitors and will slowly lose market share. It can be daunting to change technologies, but a truly agile business will constantly be on the lookout for technologies that can streamline its processes or help it offer a new product line.
What if there are sudden changes in market conditions? How quickly an organization adapts to things such as new regulations in the industry or the changing demands of the target market can often be the determining factor as to whether it stays in business. To be able to quickly accommodate increased demand for a product or implement a new environmental safeguard shows that a business is responsive to its environment. This makes a business truly agile.
These are all examples of how a business can show its agility, but how can a business structure itself to be as agile as possible?
In order for an organization to be truly agile, it needs to adopt a culture of change. This means the organization looks for ways to improve, enhance, and move forward. It all starts with the leaders and managers of the organization encouraging new ideas and getting on board with strategies that are designed to make decisions quickly. This might mean that organizations lean towards a matrix structure and decentralized decision making.
A matrix organizational structure encourages cross-functional responsibility and reporting, which enables more people to see the bigger picture of what is happening in the organization and, therefore, be ready to make changes as they are needed. Decentralized decision making means that people closer to the problem are able to make decisions that affect their area, rather than waiting for the head honcho's decision to trickle down to them. This makes employees more responsive to change, which in turn leads to organizational agility.
Organizational agility is the ability of a business to adapt quickly to changes in the business environment. The more responsive an organization is, the more agile it is. Organizations must be agile in a wide variety of areas, such as competition, technology, and changes in the market.
An agile organization is responsive to what the competition is doing in order to maintain their market share. An agile organization is responsive to new technologies, ensuring that its production process is as efficient as possible. An agile organization is also responsive to changes in the market so that it meets the needs of customers or the changing needs of the community in which it does business. Agile organizations have adopted a culture of change where leadership encourages new ideas and uses strategies such as having a matrix organizational structure or a decentralized decision making process.
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Back To CourseAgile & Scrum Training
9 chapters | 131 lessons