What is business agility? Background required in the rapidly changing VUCA era

Various companies are focusing on business agility to respond to the rapidly changing times.

In this column, we will explain the meaning and benefits of business agility, as well as ways to improve business agility. We hope that this will be helpful to companies that want to improve their business agility.

What is business agility?

First, let me explain what the term business agility means.

Agility/quickness

Agility is a word that means “agility, swiftness, quickness.” This word has been used in the sports world for a long time, but in recent years it has also started to be used in business settings.

Words that also mean agility and quickness include speed and quickness. The differences between them are as follows.

• Speed…speed of speed
• Quickness: the speed of reacting to things and taking action
• Agility: Speed ​​of judging the situation

Agility is especially used to describe speed, including accuracy, and immediate judgment and action. High agility is defined not only by speed and reaction but also by the ability to make appropriate decisions based on the situation quickly.

Ability to respond flexibly to environmental changes

Agility in the business scene is called business agility. Specifically, it refers to the organizational ability of a company to respond flexibly and quickly to changes in the external environment.

In modern times, customer needs and the environment surrounding companies are changing significantly. To survive in such an environment, it will be necessary to respond flexibly to changes in the surrounding environment.

Specific examples include quickly determining and responding to any problems that arise with the services or products that your company provides, and quickly starting the development of new products that meet customer needs.

In recent years, we have often heard the term agile development in the IT field. Agile is an adjective that means “quick” or “nimble,” and its noun form is agility.

Agile development is based on the idea that “development is subject to change,” and has the advantage of being able to flexibly develop in response to customer needs and environmental changes. In other words, agile development can be translated as a “highly agile development method.”

Why business agility is attracting attention

Business agility is gaining attention for two reasons:

• Increasing speed of changes in the environment surrounding companies
• It is necessary to create an organization tailored to the VUCA era.

Here we will explain why business agility is gaining attention and the meanings of related terms.

Increasing speed of changes in the environment surrounding companies

The reason business agility has come into the spotlight is that the environment surrounding companies is changing faster than ever before.

IT technology has changed significantly over the past 10 years, and technological innovation is still in its infancy. Therefore, technology tends to become obsolete, and the life cycles of products and services are becoming shorter. Additionally, customer and market needs are diversifying and changing at an accelerating pace.

As the environment surrounding companies changes rapidly, it is important to create an organization that can respond flexibly.

It is necessary to create an organization tailored to the VUCA era.

Next, there is a need to create an organization tailored to the VUCA era.

VUCA is an acronym for Volatility, Uncertainty, Complexity, and Ambiguity, and means “a situation that is difficult to predict.” It was originally used as a military term in the United States in the late 1990s and gradually came to be used in business settings.

We live in an era where it is impossible to predict when companies will face unforeseen circumstances such as outbreaks of infectious diseases or cyber attacks. That is why it is necessary to increase business agility and create an organization that can respond quickly and flexibly to any situation.

Benefits of increasing business agility

There are three main benefits to improving business agility:

• Able to adapt to changing environments and needs
• Build trusting relationships with related companies through quick management decisions
• Increase success rate with fast PDCA

Each will be explained in detail.

Able to adapt to changing environments and needs

First, we can adapt and respond to changing environments and needs. Agile organizations, which have particularly high business agility, quickly grasp new technologies, changing business environments, and customer needs, and utilize them in business and product development and sales strategies.

Build relationships of trust with related companies through quick management decisions

Companies and organizations with high business agility can make judgments and decisions quickly. As a result, you will be able to make a good impression on not only the employees working in the field but also the business partners, build relationships of trust, and be able to carry out work and negotiations more smoothly.

Run the PDCA cycle at high speed to increase the probability of success

By increasing business agility, you can run the PDCA cycle faster. Even if you plan carefully in advance, it does not guarantee that your business will be successful. Especially if the content is new.

Rather than taking time to prepare and analyze measures, you can increase the probability of success by implementing the measures based on a hypothesis, making changes, and refining the measures by the actual situation while improving the problems that become apparent.

Increasing business agility and speeding up the PDCA cycle will ultimately lead to business success.

Characteristics of organizations with high business agility

Characteristics of organizations with high business agility include:

• The direction of the organization is clear and is understood by employees.
• High sensitivity in information gathering
• Flexible enough to respond to changes in needs and environment
• On-site employees have some decision-making authority
• Communication between employees is smooth.

The direction of the organization is clear and is understood by employees.

When faced with rapid change or unforeseen circumstances, if the direction of the organization is uncertain, it is challenging to decide what actions to take.

An organization with high agility has clearly defined goals and policies that it wants to achieve, and these policies are well-defined among every employee. If an organization’s policy is clear, it can respond flexibly to the situation.

High sensitivity in information gathering

Customer needs and the environment surrounding companies continue to change daily. For companies to respond to these changes, it is important to be highly sensitive and collect a wide range of information.

In a highly agile organization, each employee strives to collect information and actively shares it within the company. This allows us to quickly notice changes in the market and needs and implement measures to respond to those changes.

Flexibility and ability to adapt to changes in needs and environment

When faced with challenges, many organizations cling to past successes or are unable to take on new challenges due to fear of failure. However, in the VUCA era, where conventional wisdom is said to no longer apply, old-fashioned ways of thinking cannot keep up with changes in society and the market.

An organization with high agility always has a flexible attitude toward change and can adapt to change. For example, the shift to remote work due to the spread of the new coronavirus is an example of responding flexibly to change.

On-site employees have some decision-making authority

A top-down organization that waits for decisions from management and others when faced with an issue cannot be said to be highly agile. In highly agile organizations, front-line employees have some degree of decision-making authority and take the initiative in responding.

Additionally, human resource development policies tend to emphasize autonomy and leadership.

Communication between employees is smooth.

If communication within the company is not smooth, responding to issues and changes will not proceed smoothly.

In highly agile organizations, communication between employees is smooth daily. In addition, the management team values ​​the voices of the workplace by listening to the voices of each employee, and they tend to spend time on communication.

How to increase business agility

Here, we will explain the following four ways to increase business agility.

• Clarify the company’s vision and mission
• Hand over decision-making authority to on-site employees
• Introduce tools and perform IT maintenance
• Carry out awareness and organizational reforms

Clarify the company’s vision and mission

As mentioned earlier, if employees do not understand the company’s mission, direction, etc., or the axis of decision-making, they may have trouble making decisions.

If your company’s mission is not yet clear or has not yet permeated your company, start by determining and permeating it.

Hand over decision-making authority to on-site employees

Consider handing decision-making power to front-line employees to increase business agility. It is an image of a manager giving direction to employees and entrusting the necessary decisions regarding work to the person in charge.

With greater individual discretion, employees will be able to be assigned a variety of tasks, leading to opportunities for growth and increased job satisfaction.

Deploy tools

In addition to facilitating communication, introducing tools for information sharing and communication is also a way to increase business agility.

For example, chat tools, which are often used in business settings, can be used not only to share various matters such as business-related reports, communications, and consultations but also to promote communication between employees.

In addition, using chat tools can reduce the number of man-hours required for reporting, contracting, consulting, and communicating, which can also contribute to improving work efficiency.

Carry out awareness and organizational reforms

To further increase business agility, it is necessary to change the behavior and mindset of each employee. Even if a company’s management is the only one who wants to improve business agility, it will be difficult to achieve success if employees are not aware of it. Therefore, it is important to change mindsets and organizational reforms to improve business agility.

It would be a good idea to take a long-term perspective and focus on sharing and disseminating a vision and direction, creating an environment for improving skills and conducting evaluations based on agility.

summary

In this column, we have provided an overview of business agility and explained the benefits and specific methods for increasing business agility. As various environmental changes occur, companies need to have organizational capabilities that allow them to act quickly.

Improving business agility not only accelerates the PDCA cycle but also has many benefits for companies, such as contributing to sales and increasing trust with related companies. Let’s aim to become an organization with high business agility and grow further as a company.