Enterprise Agility: What It Is and Why It Matters

One of the defining characteristics of modern times is the fast-paced, exponential change we are all going through. The business environment is so disruptive that business organizations have to adapt and pivot dynamically within very short periods—this is enterprise agility.

Even though it carries forward many of the goals of traditional Agile methods, enterprise agility doesn't arise directly from business agility. Instead, it is based on new theories and scientific concepts that help companies deal differently with rapid change.

The world has been changing faster than ever before. The COVID-19 pandemic underscored the need for business organizations to be fluid and flexible while remaining strong and resilient. 

As a business, understanding and implementing enterprise agility and what it means for your company and its stakeholders helps you do just that.

Defining Enterprise Agility

By definition, enterprise agility refers to the ability of whole organizations to adapt quickly to changing business conditions based on feedback from stakeholders. 

For any business or organization to be called agile, it needs three critical features:

  • Adaptability – the ability to read and adjust to changes in internal and external environments
  • Flexibility – a flexible business holds its core values in a loose hierarchy so that it can adapt quickly to changing circumstances
  • Balance – a dynamic balance of strength and speed as well as control and autonomy that gives you a competitive advantage in rapidly changing market conditions

How is Enterprise Agility Different From Traditional Agile Models?

Enterprise agility scales traditional agile approaches beyond product development and helps drive growth in new, ambiguous, and highly competitive environments.

By contrast, previous Agile models focused on creating smaller and faster iterative development cycles. Agile started gaining momentum outside IT teams around 2001. The natural extension of these core Agile concepts became known as business agility, finally getting codified around 2011.

Enterprise agility is a newer approach that started becoming more popular in 2018. When the pandemic occurred, it had become essential for companies to find a way to reorganize teams into a more adaptive, cross-functional, and coordinated architecture.

In fact, this focus on employees and customer needs is one of the defining features of enterprise agility. In addition to business goals such as cost reduction and increased product development speed, enterprise agility allows you to:

  • Think about how rapid change affects the mindset of employees
  • How to empower teams to deal with change productively
  • Listen to and adapt to changing market dynamics and customer needs
  • Balance the efficiencies and stability of large organizations with the fast, adaptive flexibility of smaller companies

These high-level concepts ultimately translate into a deep paradigm shift that will change how you strategize for the future as well as handle day-to-day business functions.

Why Does Enterprise Agility Matter?

Enterprise agility is about future-proofing your business. A lot of business methodologies could claim that benefit, but none can match the power of enterprise agility to respond to change in a matter of weeks, days, or even hours.

As Robert Kiyosaki said, "Only those who have the agility to change with the market and innovate quickly will survive." 

Enterprise agility results in quantifiable benefits for your company that can be measured by any number of metrics. It may not result in immediate bottom line growth, but making your organization more responsive to change helps you create more value and opportunities.

Benefits of Enterprise Agility

In addition to the usual benefits of implementing an agile approach, enterprise agility adds three key advantages.

Improved Employee Engagement

Agile organizations invest in their employees to empower them and support autonomy, growth, and increased productivity. Agile teams collaborate better because they have a shared view of how their input fits into the bigger picture.

An agile business architecture also pushes decision-making further down the line to encourage more ownership. It attracts and rewards talent and empowers each employee to become a problem-solver and innovator in their own right.

Enhanced Customer Satisfaction

The customer's needs lie at the heart of every agile organization, but customer preferences have been changing fast. In addition to a shift in priorities, enterprise agility creates an environment that can better respond to and meet changing customer demands.

That includes a more prepared team that provides a more fulfilling customer experience, as well as product development teams that deliver the products demanded faster and to higher standards.

Improve Operational Effectiveness and Efficiencies

Constant iterations to refine business processes and product deliverables doesn't have to be an expensive process. In fact, organizations with enterprise agility regularly exhibit greater operational effectiveness and create numerous opportunities for cost savings and growth.

One of the biggest advantages of agile, semi-autonomous teams is that organizations can reduce management layers to reduce operational costs. Agile teams are also more efficient at utilizing resources, presenting more cost-saving opportunities.

Similarly, agile enterprises can use trackable objectives and key results (OKRs) to measure specific goals or projects such as revenue in a new market. They can detect bottlenecks and failures early and pivot before wasting precious time and resources on unsuccessful products, projects, or features.

How to Achieve Enterprise Agility

An agile transformation of business enterprises is often a complete overhaul of multiple business aspects. Enterprise agility affects strategy formulation, cultural transformation, and experimentation/iteration.