What Is Business Agility, and Why Does It Matter?

A group of colleagues sitting around a conference table while reviewing an agile business plan
  • Business agility is an operational approach that prioritizes quick response and adaptability to changing market conditions.
  • Agility requires a combination of consistent culture, strong leadership and a focus on data.
  • Agile businesses are typically better prepared to innovate, integrate and inspire change.

Business agility is an operational approach that prioritizes quick response and adaptability to changing market conditions. Three components are required to build agile business environments — a consistent culture, strong leadership and a focus on data.

Here's a look at the basics of business-based agility, the advantages of going agile and how businesses can make the move to agile frameworks.

What is business agility?

Agility refers to the ability of an organization to adapt, survive and thrive in uncertain or complex business environments. The last few years offer an easy example. Organizations that embraced agility and learned to adapt even before 2020 were better prepared for transitions to remote and hybrid work.

With flexible work environments now standard practice for organizations, agility is no longer just nice to have. It's a necessity for businesses to navigate changing conditions.

Three components are critical in building business agility:

  • Consistent culture. Organizations need a corporate culture that's committed to creating an environment where performance can flourish. This is because agility is inherently people-driven. Making rapid changes is made easier when staff feel supported and understood.
  • Strong leadership. Effective agility demands leaders who are willing to see the process through by listening to what employees want and prioritizing their needs.
  • Focus on data. Businesses need access to relevant and real-time data about everything from current employee engagement levels to turnover rates to overall productivity reports. Taken together, disparate data points can show trends that can help businesses pivot as needed.

Top advantages of developing business agility

Agile businesses can gain four key advantages over their less agile counterparts:

1. Rapid integration

New opportunities don't wait. If businesses can't capitalize on trends as they emerge, they can find themselves behind the curve. Consider the rapid adoption of generative AI tools. In a short time, artificial intelligence has moved from a buzzword to a key business benefit.

However, making the most of gen AI requires significant changes to existing processes to enable effective integration. Agile businesses are prepared to meet these types of changes with confident leadership and a people-focused culture.

2. Enhanced innovation

While external tools and technologies can help drive business success, internal innovation is also critical. For many organizations, this means finding ways to rewrite or replace existing policies and processes with new frameworks that are more effective.

Consider data collection, for instance. Legacy tools often rely on manual capture, which is both time-consuming and error-prone. Agile businesses are better prepared to deploy automated data capture tools that leave more time for staff to focus on business innovation.

3. People-focused processes

Agility doesn't work without people. Enterprises can deploy best-of-class technologies backed by powerful cloud resources, but if staff aren't onboard with adoption, agility falls flat.

As a result, agile businesses gain the benefit of processes that are designed to bring out the best in people, in turn helping staff stay engaged and deliver their best work. Strong leadership is critical to ensure that new agile processes are tied to organizational purpose and designed to make a positive impact.

4. Framework flexibility

According to Aaron Smith, senior vice president of product management and UX at ADP, "One model isn't going to fit everybody, whether it's offsite or onsite." As a result, businesses need ways to create custom working environments that satisfy the needs of fully on-site, hybrid and completely remote staff members.

Agility makes this possible. By prioritizing what works now over what has always worked in the past, businesses are better prepared to build frameworks that adapt to changing employee needs.

How can organizations become more agile?

Business agility is something that even the most entrenched organizations can adopt and prioritize. When it comes to improving agility, three factors are key:

Adopt tools to analyze your data

First up are data analytics tools capable of collecting, cleaning and connecting data to deliver actionable insights. The more businesses know about what they have and why it matters, the better.

"It's about patterning your data," says Smith. "It's about understanding what's most meaningful in the next decision you need to make in the next hour, either as an individual employee or as a business leader."

Know your talent's needs and wants

It's also critical for businesses to understand the perspectives of employees. "You need to capture feedback on an incremental basis," Smith notes. "No longer are annual surveys enough to understand the workforce. You need to allow all the voices of your team members to share in business innovation."

If you take time to understand what employees want, what they have and what they're looking for from your organization, you'll be more likely to have a focused and engaged workforce that supports your efforts at adaptation.

Be ready for what the future is bringing

Finally, businesses need to think about long-term agility plans. While short-term solutions can make it possible to handle small shifts in operational or regulatory requirements, larger moves, such as addressing issues with pay equity or deploying effective diversity and inclusion initiatives, demand approaches that consider the bigger picture.

Is investing in business agility worth it?

In most cases, yes. Creating a culture of business agility requires an upfront investment, but it can also drive cost savings.

Smith uses the example of an employee working from home to illustrate this point. When they shift from their home life to their work life — from using personal devices to turning on work computers — there can be no interruptions or hiccups. Employees expect the same level of simplicity and user-friendly functions in work tools that they find in consumer products.

From a budget perspective, this means investing in tools and technologies that underpin hybrid work. These include secure VPNs, dedicated user devices, identity and access management solutions and prescriptive analytics tools that make it possible to understand data gleaned from user behaviors.

The result of this upfront spending is cost savings over time. Employees who are supported by a culture of innovation and agility that allows them to work how, when and where they want are naturally better prepared to react when new challenges emerge. For example, if organizations look to capitalize on new markets by modifying key offerings or changing operational focus, staff who are familiar with agility in their daily lives will likely be better equipped to act.

When will a business know it has achieved its agility goals?

Agility and adaptability look different for every business, but in general, enterprises can evaluate their success by examining responses to smaller changes. For example, if you're planning to bring staff back to the office two days per week, be sure to capture relevant data about employee sentiment, engagement and productivity. The more agile your business is, the better positioned you'll be to weather these transitions.

The need for business agility isn't going anywhere anytime soon. According to Smith, "The tools and technologies that are out there are going to continue to evolve, but the principle of connecting people from home to work is something you need to pay very close attention to."

Equipped with relevant and real-time data, businesses can take steps to build and maintain a culture of agility that can quickly respond to changing conditions.

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