Business agility transformation

More than half of Fortune 500 CEOs are struggling to keep up in this age of rapid technological change and uncertainty. But if they want their organization—no matter its size or industry—to adapt and thrive, they must take an unflinchingly comprehensive look at how they run their businesses and develop their products and services.

Enter business agility.

Business agility is a way of working that emphasizes iterative planning and delivery, with the customer at the center of every decision. With roots in product and software development, business agility aims to meet business objectives and deliver value early and often.

In a nutshell: business agility enables organizations to better respond to change and manage uncertainty.

It’s about more than technology. It involves looking across the entire organization, from business to technology, funding to real estate. For this reason, it’s designed to be viewed as a transformation—a series of incremental changes, made over time, to result in long-lasting effects. This approach makes it more scalable for large enterprises.

Making business agility—a concept from the startup world—work for large enterprises is challenging. Enterprises are different from startups: they often operate in a highly complex environment, are governed by a multitude of regulations, and are often burdened by complex legacy systems and organizational structures.

Make no mistake: business agility is not easy to implement and it doesn’t happen overnight. That said, when executed correctly, it’s proven to deliver significant value even during times of continuous change.

What it means

Business agility is the ability of a business to deliver improved customer experiences at scale and with speed. To achieve this, businesses need to learn, think, behave, and operate differently.

Our framework is the result of years of experience supporting global enterprises across various industries achieve speed at scale.

While clients have transformed the way their IT functions operate with agility, other corporate functions are doing it too. Sales, Marketing, and Risk have started adopting agile principles, values, and practices. Although this departmental approach to agility is creating business benefits, the results can be better. We call this focus on departmental cost and efficiency over the needs of the customer inside-out thinking.

Business agility flips this around. It challenges traditional management models to deliver the customer’s unmet needs and operates under the principle that growth and profitability are the consequences of better customer experiences. We call this outside-in thinking.

The business agility framework

Deloitte’s business agility framework consists of three components:

• Constructs that frame the underlying business context
• Principles that define how businesses chose to operate
• Domains that outline the specific areas of the business that need to change

The ability of businesses to respond to changing conditions, to elevate their existing offerings, and to disrupt the market is what drives success today.

In the past, we assumed mature business models were effective when they scaled. Today’s successful businesses challenge and adapt their business models using real-time customer data and market insights.

The hallmark of true business agility is the ability of an organization, as a whole, to embrace disruption and respond to changing market realities while elevating its position in the market

Businesses need to find the balance between descaled value-delivery, decentralized decision-making, and democratized operations to deliver on evolving customer needs at scale and speed.

While organizations can devise and implement the best frameworks, processes, and tools available to them, it’s not a guarantee of success. The underlying principles and culture play a major role in the continued success of a business; implementing framework and process changes without changing management principles often results in disappointment.

We believe three core principles enable continued success:

Descale: Exceptional customer experiences are the result of teams, or networks of teams, aligned to the same customer value proposition that have complete ownership of how value is delivered to their customers. Descale monolithic organizational structures and operations to increase responsiveness.

Decentralize: Fast, effective decision-making must be in the hands of those closest to the information. Decentralization is federated governance within strategic alignment; a focus on outcomes over outputs, built on trust.

Democratize: Democratic norms such as equal opportunity of ideas and acceptance of opposing thoughts enable businesses to be organically resilient and innovative.

Putting customers at the centre of business requires a shift in organizational thinking, managing work in terms of value flows, and the underlying culture that enables all of this.

Great companies design their governance models thoughtfully to enable a collaborative ecosystem that encourages employees to organize themselves to create innovative solutions. This is a value network. Such value networks are key to businesses becoming customer-centric.

The culture of an organization is the underlying values, norms, behaviours, and mindsets that ignite creativity and passion in the workplace. To enable a culture of agility, new behaviours are required in order to grow critical capabilities. These include:

• Outcome-driven ways of working, which focus on results and customer value over activities and tasks
• Continuous improvement, experimentation, and learning
• Focus on finishing
• Cross-functional, real-time communication
• Empirical and feedback-driven culture
• Resiliency and comfort with change