AG I L I T

Joseph Toms
PGDM FS
Roll No. 56
 INTRODUCTION
Agility is the ability to move rapidly and flexibly in order to make the best use of the
opportunities and adapt to the threats arising from uncertainty

Survival and long-term success of a company depends on the ability to move fast,
either defensively or opportunistically

Is a trait of innovative companies that succeed through bold

competitive moves

Examples include Apple, Amazon

 Benefits of adopting agile

Project cost reduction 56%

Managing distributed teams 61%

Software maintainability 64%

Engineering discipline 68%

Project risk reduction 74%

Project predictability 75%

Software quality 75%

Business/IT allignment 76%

Team morale 81%

Delivery speed/time to market 81%

Increased team productivity 83%

Project visibility 83%

Ability to manage changing priorities 88%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
 TRAITS OF AGILITY
Successful performance in turbulent markets

Higher revenues and operations efficiencies

More customer and employee satisfaction

The ability to change “the rules of the game”

1. Google’s rapid dominance through its Android OS
2. Even Nokia, who once dominated over 50% of the market, fell !
3. They failed to see the hidden opportunities
NOKIA’S FALL AS AN EXAMPLE OF
LACK OF AGILITY
 TYPES OF AGILITY
The basic types of agility are:

1. Financial Agility
2. Operational Agility
3. Portfolio agility
4. Organisational agility
 FINANCIAL AGILITY
Liquidity is an immensely reassuring buffer in uncertain and volatile times.

When other businesses are struggling, the cash-rich, agile firm can exploit

Buy ailing rivals, launch new products or expand into new markets overseas

Ford, in 2006 was nearing bankruptcy, but what held them together was decision to
maximise its liquidity

Improve liquidity, even if it costs to sell the most prized assets !

 METHODS TO IMPROVE LIQUIDITY
Raising capital through the equity markets.

Refinancing debt : Roll over finances through banks. Bond issuance can be an alternative

Divestment : Companies can sell off valuable assets, such as Barclays did with Barclays
Global Investors

Cost cutting : Cutting off all the unwanted costs incurred by the company
Too much of it may also lead to cutting capabilities which can be harmful
Eg: Toyota-lost sight of safety and reliability-led to management errors and product recalls.
 OPERATIONAL AGILITY

It is about a firm’s ability to exploit both “revenue enhancing” and “cost
cutting” opportunities within its core business more quickly, effectively, and
consistently than rivals do

Depends on how lean and flexible an organisation is with its processes

Processes must be as efficient as possible and business units must be tightly

aligned with their market so that they can respond quickly to any change in
the geographical or customer needs
 EXAMPLES

Ford:
• Speeds up its product development process through a much more transparent weekly
reporting system
• Encourage learning across the global business by breaking down functional barriers

Procter & Gamble:

• Has used modelling and simulation through virtual reality to reduce development costs and
time to market
• Not only helps to cut costs but also to bring in more innovation.
 PORTFOLIO AGILITY
Quickness to reshaping the businesses through means such as acquisitions, joint ventures,
alliances and outsourcing to respond to opportunities in their markets

Necessary to make lots of small, frequent changes to the organisational structures to make
sure that other companies don’t imitate

Can also involve splitting off parts of the business to focus on a specific market or customer
segment, adding new product or service divisions, and continued innovation

Examples are Goldman Sachs, General Electric, HSBC

 ORGANISATIONAL AGILITY
Quickness in achieving flatter, more autonomous organisational structures that are capable
of adapting to changes in the external environment

Such structures empower employees at different levels to make decisions, share critical
information, and forge close relationships with internal and external customers and suppliers

The shift from a hierarchical, single point of contact system, to a strategic clustered and
networked relationship system

Eg: Google operates through small teams of talented people - encouraged to pursue
seemingly wild ideas
HIERARCHICAL VS NETWORKED
 BENEFITS OF ORGANISATIONAL AGILITY
Employees are partners and collaborators, not just a
Improved engagement and satisfaction “resource” to get things done

The project team does the work, rather than a remote

Effective resource management
Unlimited innovation
Improved communication and stronger
relationships
senior manager taking responsibility for self-
scheduling;
Ideas can come from and be acted upon by anyone
within the organisation;
Working in smaller groups helps to achieve this

Moving away from a hierarchical, “command and control” model !

 CONCLUSION
• To manage uncertainty well an organisation must be agile. Indeed, it needs four types
of agility:

• The financial agility

• The operational agility
• The portfolio agility
• The organisational agility

• Any firm that can achieve high levels of agility in these four categories will survive and
thrive in uncertain times
• But as any athlete - work at it – or you will soon get out of shape.