Over the last few years, most business executives had a startling revelation: everything is changing.

The business world has, of course, been in a continuous state of evolution. The way we do business today looks starkly different than how we did business in 1990, let alone 1950 or earlier. Still, while the mechanics of how we work and the tools and the technology we use may have changed, the fundamentals of the way organizations operate has remained mostly static.

The transition to the digital age, however, promises to turn everything upside down — and the evidence of that eventuality is now clear and obvious. As this realization dawns on executives, they now seek capabilities that will help them cope with the uncertainty and disruption that the digital age has wrought.

Determining which capabilities and strategies will help organizations survive disruption and thrive in the digital age, however, is difficult when everything is in a continuous state of change. This uncertainty is why the most important capability is business agility.

Understanding Agility

The problem with saying that an organization must build agility as a capability is that it sounds obvious, but is non-prescriptive. How do you actually go about creating business agility?

At Intellyx, we believe that business agility is the combination of the ability to innovate, the ability to adapt and the ability to respond to shifts in the market. These three characteristics intersect and address both structural and cultural elements that an organization must address to create agility.

An organization must develop all three characteristics. Focusing on only one or developing one out of proportion to the others will lead to organizational dysfunction rather than agility. The development of these three characteristics, however, requires that organizations break through their natural inertia and shift their culture to one that embraces continual change.

This shift, however, is often extremely difficult and becomes the great inhibitor of business agility. Organizations must, therefore, identify ways to break through this inertia and compel their teams to explore new ways of operating.

As I explained in a recent white paper entitled, The Innovation Map: How to Create Disruptive Innovation in a Complex Digital World, one of the most important ways of doing this is by unabashedly exposing the inner workings of the organization’s operating model.

In the paper, I showed that it is not a lack of creativity that stifles innovation, but rather fear, vagueness, and ambiguity. When employees do not understand how things work in their entirety, they hesitate to step forward and expose themselves by suggesting new ideas or by even asking the hard questions.

I further explained that by clearly and openly exposing the underlying operating business processes and operating model of the organization, in combination with a clear executive mandate to challenge the status quo, organizations can alleviate this fear and ambiguity and open the door to creativity and innovation.

Innovation: The Difference Between Disruptor or Disrupted

All three agility characteristics are equally important. When it comes to innovation, however, the real challenge is that organizations fall short of its true meaning and instead settle for only incremental and evolutionary change that creates no advantage.

The ability to innovate is critical because it is often the difference between being the disruptor or the disrupted. Every organization is now in a race to create some form of competitive advantage to thrive in the post-industrial age economy. The most sustainable way of achieving that goal is via a business or technical innovation that creates a defensible barrier to competition.

The need to move beyond incremental improvement and to create real innovation is why the elimination of fear and ambiguity is so critical. The more uncertain and fearful the employees, the less likely they are to imagine entirely new ways of operating or completely new solutions. But failing to do so will inhibit the very innovation that is necessary to move the organization forward.

The Intellyx Take

Business agility is the new business imperative. The transition into the digital age has thrust every industry into a time in which not only do the old rules no longer apply, but in which things such as size and physical assets transform from strengths to liabilities.

Business executives are realizing that they must transform their organizations from the inside out and create a culture of innovation to stave off disruption and remain relevant in the digital age.

Doing so will demand an upending of almost every aspect of the business and operating model. The executives that will be the most successful in leading this effort will be those who unflinchingly expose the reality of their current state, dare their organizations to challenge everything and give them the freedom to imagine a new future.

For more on this topic, watch the on-demand webinar Delivering Innovation in a Complex Digital World

Copyright © Intellyx LLC. Promapp is an Intellyx client. Intellyx retains full editorial control over the content of this paper.

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