This is the question that business leaders are asking themselves today. Trying to balance short-term and long-term needs has always been a challenge for companies. The recession has made it even harder. Every business leader knows that he or she also has to juggle cost-cutting to improve operational efficiency with investment in new markets or products. Sounds easy. But nailing the right strategic mix that will protect and extend competitive advantage is different for each company, and most importantly, it changes over time. Sometimes it changes very quickly.
Let’s take a look at why. Consumers cut spending dramatically during the recession but are now shakily increasing it. The stock market’s volatility has increased dramatically, the composition of markets and demographics is branching into new territories, and large environmental forces are at work. Recent healthcare bills are injecting a trillion dollars into the healthcare market amidst protests of vocal critics who argue that the healthcare system is “too fragmented and disorganized to absorb the complexity of modern care.” Foreign markets are showing GDP growth double to triple that of the U.S. in the past two years. In the age of Sarbanes-Oxley, financial transparency seems to be on the down take. The U.S. Government has become a large shareholder in corporate America. There is a persistent failure to spot new markets and opportunities.
The business landscape is changing. Fast.
There have been a variety of business responses to these changes. Some companies have focused on the bottom line and have outsourced heavily or just cut back. Others have focused on innovation as a contrarian move to leapfrog others in the near future. Some industries, including healthcare, are learning how to start managing themselves better. The intense use of collaboration across business groups is thought by some as a sure way to capture untapped consumer and business spending as well as improve operational efficiency. In an age where financial prowess is drowning customer relationship management (CRM), trends like social media and viewing the customer as a collaborator are in vogue.
There is no silver bullet. If you are a reader of Harvard Business Review (HBR) like I am, then you see that there are many paths to success. I was fortunate enough to meet with C-Level execs and senior leaders in organizations over the past several years and have heard about their needs to move more rapidly, to help stop inertia from setting the direction and bring the firm’s future under management influence. Sometimes, leaders instigate change just to help them learn how to manage and benefit from change. Many managers do not have the flexibility to adapt to different ways or start new ways. I have observed time and again, however, that successful businesses use change to their advantage to create what I call “business agility.”
What makes an agile business? Agile business leaders have figured out how to flex and operate with business agility. An agile business adapts, changes, evolves and revolutionizes as needed and when needed. An agile business is constantly scanning the environment and anticipates changes, plans the next move, and sees into the future. An agile business knows how to weave management judgment and numbers discipline to make the right decisions—time after time. In other words, they get how to use information about their business to inform their futures. This is the interesting subject area I want to explore in my posts: What are the hallmarks of the analytically enabled agile business? What practices empower its people to “do business differently”? How do they use analytics to thrive under challenging business conditions? I invite you to join the conversation as I explore the concept of the agile business in future posts.