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The much awaited “return to normal” in the post pandemic era seems to be nowhere in sight. Every organization, big and small, has been impacted by economic turbulence, social crisis, emerging technologies, and a myriad of global challenges.
In times of heightened instability, the imperative need of agility and economical resilience grows. And yet, driven by a need to reduce staff and cut costs, a lot of companies have stopped investing in business agility and organizational transformation.
What is business agility?
Business agility is a set of organizational capabilities, behaviors and ways of working that provide a company with the freedom, flexibility and resilience to achieve its purpose.
Business agility can only be measured and expressed through behaviors, and there is no one single framework that is sufficient to guide a company on its agility journey.
Source: 2023 Business Agility Report
First step back since 2019
Despite the growing need to adapt to changing economy, investment in business agility has slowed in 2023 – according to a survey conducted by Business Agility Institute, on 215 organizations across the globe.
As companies brace for economic turmoil, they are more inclined to deprioritize costs outside of core business, impacting innovation and overall level of adaptability.
The most important dip in scores were registered in collaboration and innovation abilities.
Strategic capabilities such as Respond Proactively or Fund Work Dynamically are down by 6% from 2022, while collaboration capabilities, like the ability to Act as One, have dropped by 8%.
Source: 2023 Business Agility Report
However, it is not all bad news.
Some regions of the world have improved their Business Agility score over the past year.
MEA countries have achieved a significant 14% increase in their score, while regions such as Europe or Asia are keeping a steady pace of improvement of 1-2% per year.
Why do organizations struggle to achieve Business Agility?
It has been proven, time and again, that agility transformations are more successful when led from the top. Also, transforming the whole organizations and not just “more suitable” parts of an organization, leads to better outcomes and higher levels of business agility maturity. In the words of Evan Leybourn of BAI – “an organization is only as agile as its least agile part”.
In 2023 the main challenges identified as obstacles in achieving business agility have revolved around change leadership. Successful transformations are driven by executives who are able to lead with agility and embody a people-first and adaptive leadership mindset.
Source: 2023 Business Agility Report
While poor change leadership has always been a challenge to business agility, new trends have emerged in 2023.
New challenges revolve around inclusivity, metrics and measures, as well as attracting and retaining skilled professionals.
In the current volatile work market, companies with higher business agility maturity are more successful at attracting, building and retaining talent, partially due to the appeal of agile ways of working.
Also, high performing agile companies are viewed by professionals in the work force as more adaptive and better suited to weather economic turbulence.
What’s next?
As we move into a likely even more challenging 2024, the need for agility and business resilience will only grow. But challenge is just another word for opportunity.
Organizations that will exploit the capability of sensing and adapting to changes will be the ones who will see greater work force stability, more consolidated customer base and overall improved business outcomes and financial benefits.
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