The Speed of Business TodayBy Faisal Hoque | Posted 2009-06-24 Email Print
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Constant change is the new dynamic of the global economy, making agility more necessary than ever.
Business leaders often use agility to describe their business plans and strategic initiatives, but it’s often little more than just a vision. Agility is something that requires planning and a full incorporation in business and management processes. It’s a philosophy and action. And, most of all, it requires courage and commitment. But what does agility really means to business, and how does it help achieve higher levels of efficiency and success?
Innovation once took years to result in new technologies and marketable products. The use of radio waves to detect metallic objects and enable long-distance communications was first theorized in 1904. Three decades later, the theory resulted in the first practical application of radio detection finding. By the beginning of World War II, the United States, United Kingdom, France and Germany had their own versions of radio detection and ranging – what we now call “radar.” Radar opened the door for the accidental discovery of using microwaves for cooking and, in 1947 the first microwave oven was installed in a Boston restaurant.
Contrast the evolution of the microwave oven with Google. The Internet juggernaut didn’t invent search technology, but did see the need for a better means for organizing and finding Web-based information. Founders Larry Page and Sergey Brin initially took their concept to Yahoo founder Jerry Yang, then the master of the nascent Internet, offering him a way to provide a better search service to his millions of users. Yang was impressed by the idea, but didn’t see the practical application. He told the Google boys to prove themselves independently; the idea that Yahoo would simply buy Google if it showed signs of commercial success. We all know how that story played out.
Constant change is the new dynamic of the global economy, and makes agility even more necessary than at any point in business history. Consider the following:
Only 74 of the original 500 companies in the S&P Index were still on the list 40 years later – a mortality rate of more than 10 per year. The average life span of an S&P 500 company has steadily decreased from more than 50 years to fewer than 25. Projecting forward, it’s likely that only about one-third of today’s major corporations will survive as significant businesses for the next quarter century.
Given such high stakes, it is not surprising such terms like agility, resilience, adaptability and innovation reverberate off the walls in corporate boardrooms and executive suites. Most people acknowledge that agility is the key to capitalizing on innovation and achieving success in the fast-paced and rapidly evolving marketplace. However, there’s no common definition for what agility means in practical terms. Some try to define agility in terms from the cold constructs of X percent revenue performance over the market or competitive set to the abstract of “never having to say you’re sorry.”
Agility probably has as many definitions as means for implementation. For purposes of our discussion, we define agility as the ability to see and seize opportunities in the marketplace. Resilience is the flip side of the same coin: the ability to react to unexpected changes. Agility is proactive and has a positive connotation. Resilience is reactive and has a negative connotation. The distinction is important. The evidence of agility and resilience is an organization’s survival, perseverance and, ultimately, success. It has the ability to move quickly to introduce new products, revamp business processes and create new business models. And it has the resilience to bounce back when unexpected threats take their hit.
Companies don’t survive unless they’re agile and innovative. Even multibillion-dollar powerhouses must recognize when a shift in their original knitting needs to evolve in order to adopt new technologies, products and businesses as the market changes to ensure continued growth. Agility is the catalyst. Survival is enabled. Success is the result.