It’s Wednesday—the day my automated “to-do” list tells me to write a blog post, if I haven’t already posted one this week. I’m in the middle of a trip to London to speak at Qcon. Traveling to exotic (!) places distracts me from things like writing blog posts. Since the reminder came up, and I noticed I haven’t written one this week, I began to look around.
Luckily, CIO magazine has come to my rescue. Michael Hugos offers his thoughts on A Formula to Measure Business Agility in a link from this week’s CIO Insider email. In his article he offers a results-oriented definition of agility in business,
“…the ability to consistently earn profits that are 2 – 4% (and sometimes more) higher than the market average. Agility enables companies to earn an additional 2 – 4 % because they can make a hundred small adjustments every day to reduce operating costs and increase revenues. And sometimes agility enables you to earn even more by sensing and responding quickly to opportunities for new products or services, that for a while, have terrific profit margins.”
He mentions another aspect of agility in business (which applies equally well to software development or strategic executive decisions). Hugos writes, “There is one caveat to this definition of agility though - true agility is self-sustaining, not self-consuming.” Draconian measures (layoffs, downsizings, paring away at customer service, deferred maintenance, etc.) to increase profits though attention to the short-term bottom line don’t do it. He says measures like those are, “…self-consuming, like spending down your bank account. It’s not agile because it isn’t sustainable; it does not create or renew; it only uses up.”
It pleases me that someone connects agility with sustainability, creativity, and real growth.
He also offers a formula for business agility, based on visibility (aka transparency and adequate information flow), motivation (the desire to respond to change rather than following a plan ;-) ) and training.
“Business Agility = (Visibility + Motivation) x Training”
On the other hand, I felt dismay at Hugos’ implied view that profit offers the only measure worth counting. He wrote, “I figured that unless agility actually delivers additional profits then why go to all the trouble of being agile in the first place?” I can think of a number of reasons. If agility supports more satisfying (including productive) workplaces or more socially responsible companies (“Don’t be Evil”), it would still be worth the trouble…and eventually trickle up to the top line.