While many CEOs are still hoping that things will 'return to normal' eventually, our view is that this is the 'new normal', and that the challenging times are not over.  This raises questions for every organisation:  How agile is your organisation?  Can it handle any problem that is thrown its way, and adapt quickly in a fast changing business climate?

Despite a difficult 2009, firms such as Apple are doing really well.  Apple's current success lies in having adopted an innovative business model, which integrates hardware, software and service.  By combing its iPod with the service of iTunes, Apple has gained a broad share of the digital music market.  Tens of thousand of applications are available for iPhone now, and everyone is curious to see what the future holds for iPad.  Another success story is Tesco.  By venturing into new areas in terms of products, such as telecommunications, and new geographical areas (operating in several countries and regions, including Asia and the US), it has broadened its base and become more agile as a result.

That said, many businesses are still struggling to adapt to the changed economic environment.  The British public was shocked when Woolworths was forced to close down in January 2009, haveing been a successful household name on the high street for a century.  It had been struggling since it's demerger from Kingfisher which left it with cash-flow issues, huge debts, and a leasehold property portfolio with straining terms.  All this retricted Woolworths' ability to adapt to a tougher market.

These examples demonstrate the importance of agility in order to succeed in all economic climates, and how it can make the difference between success and failure.

Agile dynamics
But not every organisation needs the same level of agility.  As the following diagram illustrates, the appropriate level of agility depends on the dynamics and volatility of the market in which your organisation operates.  Organisation that are not agile enough are too slow to react and adapt to changes, and lose any competitive edge they may once have had.  Organisations that are too agile can lack sustainability and harbour unnecessary costs.  For example, in the telecommunication industry the market moves fast and is highly competitive, therefore high agility is crucial to survive and succeed.  However, in agriculture, the mills of change grind much slower.  Trying to achieve the agility of a telecommunications business would thererfore be inappropriate for farming as it is both unnecessary and hugely expensive.  The automotive industry faces different challenges.  Technology and legislation (such as CO2 reductions) move much faster than the ability to develop new car designs.  In such an environment agility is achieved through competitors working together, e.g. Daimler signing a deal with Renault and Nissan.  Daimler brings the high-end technology, whilst both Renault and Nissan have the experience of producing and selling small cars that meet the limits on CO2 emissions.

 So what does 'agility' mean for organisations?  In the sports field, agility is defined as "the ability to move and change direction and position of the body quickly and effectively while under control"¹.  This definition can also be applied to businesses, but because the business world is so much more complex, ER Consultants and Allied Consultants Europe (ACE)² have built on this to define organisational agility through the following six dimensions:

1. Culture:  the way your employees' collective values and opinions guide behaviour within your organisation will have an important impact on how agile your organisaiton is.  How can individual employees contribute to adapt to the market and become more agile?
    
2. Structure:  the set-up of operations and processes within your organisation dictate how effectively things are arranged.  The extent of flexibility allowed by the existing structure, or the ability to change structural elements will determine the level of agility of your organisation.
    
3. Strategy:  the strategy, which determines the approach and road map for the future of your business, describes the development of the organisation with its projects and goals.  How strategy is planned, whether employees are aware of it and its relevance to the business goals and market, all have an impact on the agility of the organisation.  Another interesting aspect is whether, and how, intuition plays a role in the development of strategy.
    
4. Innovation:  this is one of the areas that are quite obviously linked to how fast an organisation can adapt to changes in the market.  The ability to generate new, relevant ideas and bring them to market in a short space of time has a massive impact on how quickly you can turn products and services around, and change direction to adapt.
    
5. Leadership and Management:  the role, approach and activities of leadership and management have an impact on employees and processes.  How quickly decisions are executed is also part of this dimension.  All these impact on how quickly things can happen around the organisation, hence its agility.
    
6. Learning and Change:  How an organisation and its members deal with experiences, consequences of actions and old habits, characterises its capacity for organisation learning.  This is closely linked to how change is dealt with, and how the organisation can adapt to ever changing circumstance, such as we are currently experiencing.

This model of agility has been the basis for the survey conducted during spring 2010 by ER Consultants and ACE, to answer questions such as:

• What is organisational agility and how can we measure it?
• How agile do we need to be to outperform our competitors?
• Which areas do we need to work on to improve our performance?

In exploring these questions we intend to create a benchmark of agility in the European market, looking at differences in the public and private sectors, industries, and countries.

From the summer of 2010, ER Consultants will be in a position to help you to identify just how agile your organisaiton is, and how you compare to other organisations Europe-wide.  By undertaking our agility questionnaire, you will be able to find out where you stand in comparison to others, and gain invaluable insights into where to focus in order to improve your level of agility.  The results will help you measure yourself against the different dimensions of organisational agility,  and determine how agile you need to be to respond successfully to changes in the market.  Once you have these answers, you will be in a better position to fine-tune your organisation to enable it to aim high and get well ahead of the competition.

Measure your agility
If you are interested in finding out exactly how agile your business is, and where you stand in comparison to orther organisations Europe-wide, then contact:  simone.krell@erconsultants.co.uk

References:
1  http://sportsmedicine.about.com/od/glossary/g/Agility_def.htm

2  ER Consultants is a partner of Allied Consultants Europe (ACE), a European strategic partnership of strategy, organisation, change, and business performance consultancies that have been working together since 1992.