Business Agility (part I)

Since the end of the first Industrial Revolutions, the world has changed at an ever-faster rate. The speed of technology adoption by the world population has been growing exponentially and the reason behind this lies in the very characteristics and possibilities unveiled from technology itself and the internet in their symbiosis with globalization. On the other hand, society has been changing at a fast pace, as well as the dynamics of the market as a whole. Knowledge workers take the place of the former industrial workers towards generating innovation.

Nonetheless, organizations are moving thru more automated processes and dealing with a brutal amount of data, while the demand from their customers is growing toward convenience and exclusivity. In this new context, it is not enough just to serve customers, it is necessary to enchant them if the goal is the conquest and retention. Moreover, consumers talk to each other through powerful social networks at a pace never before glimpsed. Their experiences, good or bad, are shared at an astonishing speed, making them the protagonists of this new changing business environment.

There are several consequences derived from this confluence of factors. One, and perhaps the most challenging, is that the landscape today is extremely labyrinthine or liquid, as everything changes very quickly. Volatility associated with uncertainty leads to a complex and possibly ambiguous scenario (VUCA) as historical data are no longer the main reference for future scenario planning. The very concept of strategic planning is in jeopardy, as the adaptive power of what emerges stands out over traditional long and detailed plans. From a lean point of view if change is urgent and uninterrupted, the ability to build, measure and learn can produce less waste and more benefits than trying to predict an increasingly imponderable future.

This new format of doing business deserves to be analyzed by managers, organizational leaders and entrepreneurs with more parsimony, not only to be up-to-date with what’s happening, but fundamentally, in order to maintain the sustainability of their own companies. Those who may choose to ignore the wave of change that the market has been going through and continue to adopt bureaucratic management models not only run into the risk of making their companies obsolete, but also irrelevant, which in this case end up being a synonymous of the same fate: the crack or bankruptcy of their business.

The answer to the challenge of surviving and flourishing in the VUCA world is not simply thru technology. There are many cases of companies, including IT ones, that lose the course or the timing of their own products and services because they have not been fast enough to capture and implement what the market demands or what their customers consider important. Companies like Blockbuster, Iridium, Kodak, among others, just to mention a few.

On the other hand, we have organizations that end up generating new business models, new economies, literally conquering millions of customers based on creative ideas that turn into innovation. Examples such as Spotify, Tesla, Netflix, Apple, Microsoft, among so many others that today have such a direct influence on our lives by lessen the friction between products / services and their users. What would be the secret behind the success of these organizations?

The answer lies in agility. A concept linked to the mindset that organizations and its leaders need to interiorize and feel in order to drive deep and lasting changes in the way the company creates the fastest value for its customers. Being agile is putting the customer at the center of everything to be developed. A relatively old idea with a very trivial logic to be understood, although not so easy to implement in practice. Actually, if it’s so obvious, why don't all the other companies follow?

When it comes to putting the customer at the center of everything, we're referring to building a customer-based business value chain (not the other way around). In practice, any area, process, system, or even culture that is hindering or preventing this from happening should be changed or eliminated. If the organization truly wants to put their customers as the epicenter, then everything else must be subordinated to this idea. How many times have we seen companies that end up forcing a product or service on their customers, based on goals, KPIs, or OKRs created to serve specific departments, processes, or even roles? It is not the customer who must adapt to the company's system or processes, just as it should not be the tail wagging the dog.

Discovering what represents customer value and forming a true partnership with the customer is at the core of the very concept of agility. Of course, customer value should ultimately be monetized in some way for the organization, but one cannot lose sight of the raison d'être of the business. The goal is a constant and mutual collaboration, which turns out to be good for both the vendor and the buyer. It even mitigates that famous and unwanted dichotomy that keeps customers and suppliers away. When there is effective cooperation, no blame is sought, as responsibility, burden and bonus are all shared.