Why Is Agility Important in Business?

Dr.Majed Najrani
Apr 27, 2017 · 4 min read

The world is constantly changing, an organization today that leads in its industry, may not exist in the future or no longer lead. Consequently, there are examples of corporations that were the primary competitors in their markets in the past and could not endure changing market conditions. One example is Circuit City, which had more than 1,400 stores domestically and internationally. Circuit City sales exceeded $11 billion both in the U.S. and internationally in 2008. Today, Circuit City a major company in the consumer electronics industry no longer exists.

Kodak, Dell and Ericsson are a few other examples of businesses that were leading in their industries. Today, these companies continue to operate, but not at the same level or scale. The main reasons for their downfall were their inability to adapt to new technologies or changing consumer preferences. These companies’ failure to be agile is the ultimate reason for their current state. As a result, organizational agility becomes a significant competitive advantage.

Change not only affects organizations but industries as well. Industries change when new competitors challenge established organizations by implementing new technologies that did not exist in the past. For instance, the navigation industry saw a significant shift in the last 30 years. Roadmaps first dominated the navigation industry followed by GPS (Global Positioning Systems) and currently smartphones navigation apps. The map-making industry was affected by the expanding use of the internet. GPS devices became inexpensive, and consumers switched from buying roadmaps to GPSs. Then, smartphones offered free navigation applications, which decimated the market for GPS manufacturing companies.

The navigation industry is one example of a rapid change that can transform a competitive environment by emerging new technologies. Consequently, emerging technologies could have adversarial effects on organizations that are not agile.

In contrast, agile organizations can manage change within their industry. For example, the petroleum refining industry. The oil refining industry in the United States encountered a substantially challenging market environment in the 1980s. The industry responded by adopting new refining technology, which leads to more profits and improved response to changes in the oil market. Change will ultimately occur in every market and organizations needs to be agile to cope with change.

Globalization is one of the primary drivers of change, Since, the world today is interconnected and gives any company the opportunity to compete globally. Organizations that are not agile, cannot compete in the global economy. As the world becomes more connected, complexity in dealing with new technology, regulations and competitors increase.

For organizations to succeed in a constantly changing world, they need to improve their ability to change and adapt. As a result, agility is an important element to succeed in a dynamic environment.

Please follow me on Linkedin for more updates about agility, change and strategy.

Disclaimer: This article is based on my own opinion and not the opinion of my employer.

To learn more about strategies that can help your organization become agile. Go to my article:

What Strategies Can I Use To Make My Company Agile?

Dr.Majed Najrani

Written by

Change Management | Strategy| Organizational Agility

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