Business Agility
- Anderson Barbosa
- May 27
- 7 min read
The IMD World Competitiveness Yearbook (WCY), through indicator 3.2.3, parameter "Agility of Companies", assesses the ability of companies in an economy to respond quickly and effectively to changes in the business environment. This parameter is crucial to understanding the adaptability and innovation capacity of companies, which are key factors for a nation's competitiveness.
Objectives:
Measure adaptability: Assess the ability of companies to adapt to a changing business environment, including new technologies, emerging markets, and changing consumer preferences.
Identify strengths and weaknesses: Identify the strengths and weaknesses of companies in relation to their ability to respond to change, enabling policy makers and business leaders to take action to improve competitiveness.
Compare economies: Compare the agility of companies across different economies, providing insights into the factors driving competitiveness at a national level.
Inform policies: Inform government policies that aim to promote innovation, entrepreneurship and business competitiveness.
Attract investment: Signal to foreign investors the ability of companies in an economy to adapt and thrive in a dynamic business environment.
In summary, the "Agility of Companies" parameter in the IMD WCY is an important measure of companies' ability to adapt and innovate in a constantly changing business environment.
By assessing the agility of companies, IMD WCY provides valuable insights into the competitiveness of an economy and helps inform policies aimed at promoting sustainable economic growth.
The Key to Competitiveness in the Modern World
Agile organizations are able to adapt to market changes, customer demands, and other unforeseen challenges quickly and effectively. This means always being on the lookout to outperform the competition and maintain a competitive advantage.
According to McKinsey, 75% of S&P 500 companies will disappear by 2027, many because they failed to adapt to the ever-changing landscape. With this in mind, it’s clear that companies need to master business agility to survive.
What does business agility entail?
Business agility is about taking initiative and making decisions quickly. It encourages companies to adopt flexible and iterative approaches to decision-making, project management, product management, and meeting customer needs. Instead of sticking to a fixed plan, companies can adjust and improve as they go.
An agile business stays ahead of market changes and takes advantage of every business opportunity it can.
Achieving the goal of building an agile enterprise often involves implementing agile frameworks, practices, and mindsets throughout the organization. This means fostering team collaboration and self-organization, and continually looking for ways to improve processes and offerings.
Why is business agility important?
In a non-exhaustive manner, we present below essential characteristics of companies that build an agile profile.
Employee satisfaction and retention: Happy employees are more likely to stick around, and business agility plays a big role in keeping everyone happy. Agility goes hand in hand with a trusting, autonomous, and empowering work environment. Employees who feel like they’re part of a company that’s moving forward and adapting to change are more likely to feel satisfied, motivated, and valued. Agile companies also tend to offer great opportunities for skill development—helping employees grow and thrive in their careers.
Customer-centric approach: Adopting a customer-centric approach through business agility is essential for companies seeking long-term success. Companies can foster a strong connection with their target audience by emphasizing the importance of understanding customer needs, continually engaging with customers, and delivering incremental value.
Adaptability to market changes: Business agility helps companies stay relevant and competitive by enabling them to respond quickly to market changes and customer demands. Being agile in the face of change allows companies to identify trends, seize emerging opportunities, and keep their customers satisfied.
Competitive advantage: Businesses gain a competitive advantage through business agility, enabling them to deliver products and services faster, seize new opportunities, and respond effectively to customer feedback. With competition fiercer than ever, staying agile and ahead of the curve means the difference between thriving and fading into oblivion.
Improved innovation and experimentation: When it comes to business agility, innovation and experimentation go hand in hand. An agile mindset means that you are open to new ideas and willing to test different possibilities. This trial-and-error approach allows companies to find the best business solutions to improve their offerings.
Improved risk management: Companies that embrace business agility become better at identifying potential problems before they spiral out of control. They can shift gears, adjust their strategies, and address risks head-on. Things change quickly—whether it’s market fluctuations, new competitors, or even global events—and agile companies stay ready for whatever life throws at them.
How to achieve business agility?
Achieving business agility may seem challenging at first glance, but the right guidance can help any organization embrace this transformative mindset.
Adopt agile principles
Adopt agile leadership principles to lay the foundation for business agility. These principles include collaborating with customers, responding to change, and delivering incremental value. It’s about adopting a customer-centric approach, being ready to adapt when circumstances change, and taking small but steady steps toward your goals.
Implement agile frameworks and methodologies
Incorporating agile frameworks and methodologies like Scrum, Kanban, or Lean is a great step toward achieving business agility. Each of these frameworks offers a structured approach to iterative and adaptive work processes, helping your organization’s digital transformation.
Scrum is an iterative framework that uses short, time-limited periods, known as “sprints,” to incrementally build and improve products. This continuous delivery cycle of planning, building, and reviewing allows teams to quickly adapt to new information and deliver value to the customer.
Kanban prioritizes visualizing workflow and work-in-progress boundaries to ensure smooth and constant value delivery. Kanban clearly maps each step of the process and manages the flow of work items to help business teams identify bottlenecks and optimize their efforts for maximum efficiency.
Lean is another powerful methodology that focuses on eliminating waste and optimizing processes to deliver value with minimal resources. By perfecting continuous improvement, Lean empowers organizations to increase productivity and enhance customer satisfaction without compromising quality.
Promote cross-functional agile teams
Cross-functional agile teams are the best way to approach business agility. These teams include people from multiple disciplines, each bringing their own set of skills and knowledge to the table. The beauty of cross-functional teams is the diverse perspectives they bring to the table to foster collaboration, efficiency, and a more holistic approach to problem-solving.
Self-organization and empowerment are essential to help these teams deliver value streams effectively. Self-organizing teams have the autonomy to make decisions and plan their work based on shared knowledge. This freedom encourages a sense of ownership and accountability, which translates into higher motivation and better results.
Engage stakeholders
Involving stakeholders throughout the project ensures that everyone understands the goals, requirements, and expectations. This puts everyone on the same page – the more you collaborate, the smoother things will go.
Regular communication, feedback, and collaboration with stakeholders—including customers, team members, and executives—can make a big difference. Keeping these lines of communication open invites different viewpoints and ideas to help achieve business agility. Stakeholder engagement makes your company more adaptable, resilient, and customer-focused.
be-InnPro can help your company implement business agility effectively. Contact us to learn more about our services.
Analysis of Business Agility in Portugal
According to the IMD World Competitiveness Yearbook 2024, Portugal ranks 53rd out of 67 economies in the "Agility of Companies" category. This result points to significant challenges in the ability of companies to adapt and respond quickly to changes in the business environment. To reverse this scenario, it is crucial that companies themselves take the initiative and implement strategies focused on increasing their agility.
Possible Internal Factors Limiting Business Agility:
Complex Internal Processes: Complex and bureaucratic internal processes can delay the response to new opportunities and challenges.
Rigid Hierarchical Structures: Operating under traditional hierarchical structures, making fluid communication and quick decision-making difficult.
Risk Aversion: A culture of risk aversion can impede experimentation and adoption of new technologies and business models.
Lack of Investment in Training: The lack of investment in training and development of digital and management skills limits employees' ability to adapt to new market demands.
Resistance to Change: Resistance to change by employees and management can make it difficult to implement new strategies and practices.
Recommendations for Increasing Business Agility
Promote a Culture of Agility and Innovation:
Encourage Experimentation: Create an environment that encourages experimentation and rapid prototyping, allowing employees to test new ideas and learn from mistakes.
Empower Employees: Delegate responsibility and autonomy to employees, allowing them to make decisions and solve problems independently.
Celebrate Success: Recognize and reward innovation and creativity by encouraging employees to come up with new ideas and solutions.
Transparent Communication: Promote transparent and open communication, ensuring that all employees are informed about the company's objectives and changes in the market.
Incentive Management : It is important that management takes a leadership role in promoting agility by creating an environment that encourages experimentation, collaboration and continuous learning.
Invest in Training and Skills Development:
Training Programs: Offer training programs in digital skills, agile project management, design thinking, and other areas relevant to agility.
Mentoring and Coaching: Implement mentoring and coaching programs to help employees develop their skills and overcome their challenges.
Continuous Learning: Encourage continuous learning by offering access to online courses, workshops and conferences.
Simplify Internal Processes:
Process Mapping: Map internal processes to identify bottlenecks and areas of inefficiency.
Automation: Automate repetitive and bureaucratic tasks to free up employees for more strategic activities.
Waste Elimination: Eliminate activities and processes that do not add value, optimizing the workflow.
Adopt Agile Methodologies:
Scrum, Kanban, Lean: Implement agile methodologies such as Scrum, Kanban or Lean to manage projects and processes more efficiently and adaptably.
Sprints: Use sprints to deliver results in short, iterative cycles, allowing the company to quickly adapt to customer feedback and market changes.
Daily Stand-ups: Hold short daily meetings to align the team, identify roadblocks, and ensure everyone is working in the same direction.
Foster Collaboration and Communication:
Cross-functional Teams: Create cross-functional teams with members from different areas of the company to promote collaboration and knowledge exchange.
Collaboration Tools: Use online collaboration tools to facilitate communication and information sharing.
Collaborative Workspaces: Create collaborative workspaces that encourage interaction and the exchange of ideas.
Access to Financing for Innovative Projects:
Credit Guarantees: Offer credit guarantees to facilitate access to financing for innovative projects.
Financing Funds: Preparation of projects for the development of competitive applications to multiple European funding programs.
Need support moving towards making your business agile?
Simplify and optimize processes?
Evaluate investments in technology and innovation?
Develop and engage talent?
Promote an agile and innovative organizational culture?
Facilitate access to financing?
be-InnPro can help your company implement business agility effectively. Contact us to learn more about our services.
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