An excerpt from the forthcoming book “Organizing and Managing Insanely Great Products” by David Fradin with RN Prasad
Every product enterprise, no matter what products and/or services they deliver to their markets, face one common business challenge – CHANGE. The ambition of every product enterprise is to be flexible to meet the changing requirements and continue to make the business sustainable. Example of such changes include:
- Shift in customer requirements and expectations from the product enterprise
- Shift in economic conditions of the different geographies served by the product enterprise
- Shift in technologies used to design, build and support the products/ services
- Shift in the approaches to marketing products and supporting products
- Shift in the innovation approach, IP creation, and shortening of cycle times
- Shift in the method used to assess the market leadership (KPIs)
- Shift in the way the talent mix of the product enterprise is changing in different geographies
- Shift in the strategies needed to take-on competition in different markets
We use the term ‘Business Agility’ or ‘Agile Enterprise’ to describe such a product enterprise that is flexible to adjust itself to changing circumstances and retain its position in the market places they serve. At the heart of every agile enterprise is its customers. The way they consume products and services is ever-changing. Just think about the way we purchased books before eBooks on Amazon Kindle. According to Business Agility Institute, there are three components of business agility:
- Agile Leadership – This represents the ability of the product enterprise to innovate the optimal strategy for their products & markets, quickly realign talent and that the team has a shared vision.
- Agile Individuals – The key to be flexible is the talent within the product enterprise. Individual team members demonstrating accountability, execution excellence, and growth mindsets enable the product enterprise to be agile.
- Agile Operations – Business operations is the window through which consumers feel the user experience of working with the product enterprise. The organization hierarchy, business processes, and partners together contribute to the agile operations.
Thus, McKinsey describes business agility as the ability of an organization to renew itself, adapt, change quickly, and succeed in a rapidly changing, ambiguous, turbulent environment. According to Forbes business agility describes the nimbleness of a company; that is, the ability to adapt quickly while empowering everyone associated with the brand. Many market research companies describe the world we are in as VUCA – Volatile, Uncertain, Complex and Ambiguous. Business agility provides the necessary shock absorber to be a successful product enterprise in a VUCA world. Agile enterprises sincerely adopt three laws of agility viz keeping team size small, organize these teams as a network and keep decision-making teams close to customers. The common factors that product enterprises face will include global competition, disruptive innovations, pressure on margins, new market regulations, mergers & acquisitions, cyber threats and changing growth hacking strategies. According to the Economist survey, the pressure to bring down costs will be severe and the enterprise needs to make quick decisions and achieve high performance to manage the same. Some of the critical characteristics of an agile product enterprise include: