Agility Is an Internal and External Resource

Constant change is the new dynamic of the global economy, making agility more necessary than ever.

Agile companies have what athletes and soldiers call “situational awareness.” They put themselves both in a position to observe what’s happening and have the wherewithal to act upon intelligence. Agile companies establish formal relationships outside of their walls with customers, partners, suppliers and the public. These relationships are their antennae on the world, sensors of change, either opportunistic or threatening. Internally, they tap the minds of their employees in ways other companies do not and use technology to track what is going on in near real-time.

Customers are the ultimate reality check. No company today would say that its customers were not its top priority. The reality is that most companies ignore their customers. The best example of that willful ignorance is the U.S. airline industry. Challenged by security requirements, rising fuel, equipment and labor costs, most of the major U.S. airlines have cut back on amenities and features while increasing fares and levying fees for everything from preferred coach seating to blankets and checked bags. Needless to say, passengers aren’t thrilled with these charges or the declining level of service.

Customer satisfaction ratings with the U.S. airlines have steadily declined since 2001.

While nearly all airlines are struggling, those that have paid attention to customer satisfaction and improvised ways of compensating for cutbacks are capitalizing the pain of their peers and attracting disenfranchised customers. Southwest Airlines, a company known for basic amenities but attention to customer service, outpaces the rest of the industry by a wide margin – 79 points on the American Customer Satisfaction Index; the industry average is 62 points in 2008.

Agile companies turn customer dissatisfaction into a competitive advantage. And smart companies are using new and innovative methods and tools to measure customer affinity and satisfaction. FedEx, for example, launched a Web-based tool that allows customers – both senders and receivers – to track in real time the progress of package delivery in its system. Netflix, the Web-based movie rental company, and Amazon, the world’s largest online bookseller, both use user complex algorithms to determine customers’ preferences, community recommendations and user interaction with the Web site to predict movie interests and make recommendations.
 
The public is increasingly a source for inspiration and agility. In traditional product and marketing models, companies would assemble focus groups in their target marketplace to determine if they had the right look, features and messaging to sell the product. In today’s Web-based economy, companies are leveraging Web 2.0 applications and social networking tools—such as Linked In, Facebook and MySpace—to solicit consumer feedback and input during the design and marketing phases.

Savvy companies are even using social networks and the general community to solve some of their most perplexing problems during product design and development. Others are using open forums, such as TechTarget’s Information Knowledge Exchange and the Linked In professional community, to pose questions to peers to solve immediate tactical and operational problems.

Employees often are the best source for intelligence that leads to innovation and agility. Google, for instance, encourages its employees to explore new ideas by providing them time and funding for side projects. Unfortunately, most organizations are structured and have cultures that discourage employees from contributing from the bottom up.  In the Information Age, when more and more employees are knowledge workers and are better educated than ever, this is a waste. Employees are closest to the customer and know intimately the strengths and weaknesses of business processes. Moreover, today’s employees are networked with peers in other companies as never before. It is a reality at many firms today that their most important resource walks out of the door every weekday at 5 p.m.

Agility, then, begins with awareness. What are competitors up to? How is the market changing? What new technologies are coming along? Most importantly, what are customers thinking? What do they need?