How to Improve Business Agility

The newly published 2022 Business Agility Report contains insight from 296 organizations worldwide. According to the report published by Business Agility Institute, understanding your value streams and structuring your workforce and processes around them is one of three key practices to improving Business Agility.

This finding is consistent with what I see when advising leaders on Agile organization design. Understanding the organization’s value streams and organizing around them can significantly reduce coordination, communication, and decision-making complexity.

And I am not necessarily talking about organizing people into SAFe release trains. In many organizations, they introduce new layers of coordination, decision-making, and reporting, which is the opposite of what should be the goal. These organizations would probably be better off descaling complexity by empowering smaller teams to be responsible for specific business capabilities.

The goal of a reorganization should be to minimize handoffs between teams, shorten lead times, and provide everyone involved with a line of sight to their customers. And in true Agile fashion, these structures will need to adapt as your market conditions change and your organization evolves.

The other two key practices are 1) focusing on a culture of relentless improvement and 2) implementing an adaptive funding model focusing on business outcomes. These two practices are, in my opinion, just as important, if not more, than the practice of reorganizing.

As an example, I currently work with an organization where they discuss, score, prioritize, and fund initiatives based on their expected impact and outcome every third week. This model is much more dynamic than the yearly budgeting cycle and allows the organization to react quickly to new opportunities and sensibly stop or reduce investment in lower-priority work.

And finally, I believe that a culture of relentless improvement is almost a hygiene factor in achieving a high level of business agility. Reorganizing or introducing dynamic funding models is worth little if you cannot have honest conversations about what is working and how to improve existing practices.

Another interesting finding in the report is that it takes two years of transformational work to improve business agility significantly. This is in line with my experience. There is a limit to the pace of change that the average person in an organization can accept and sustain. I do, however, find that people at nimble organizations with a culture of adaptability can change faster than more rigid and traditional organizations.

What do you think? Are a culture of relentless improvement, reorganization, and adaptive funding models the primary keys to business agility? And what comes in fourth, fifth, and… place?

You can read the full report here.

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