A client needs a product similar—but not identical—to one that your company offers. You are able to react quickly and develop an adapted version that meets his needs. That is business agility. And it has just expanded your business in a whole new direction.
An agile business can move quickly to take advantage of opportunities. In today's economy, where competition is fierce and the landscape changes fast, agility is increasingly indispensable. Remaining nimble, rather than focusing only on long production runs and standard products, can mean the difference between growth and failure.
Agility can also help a company deal with unforeseen risks, such as new regulations in the industry, or a strong competing product with a lower price.
In many ways, agility for a business is similar to fitness and flexibility for a person. Just as good health allows a person to fight off disease and stress, agility allows a business to better deal with changing markets, competition, client preferences and regulations.
To hone their agility, businesses can follow these 8 steps:
- Step 1: Focus Determine your company's core competencies. These are the things that your business does best, that your customers most value and that, ideally, your competitors can't duplicate easily. Knowing these competencies can help in a variety of ways. For example, you may determine that your company's core competency is expertise in a particular type of motor. You can then decide to leverage that expertise to develop that type of motor for varied products in varied industries. But core competencies go beyond specific products. They can also include technical knowledge or expertise, a manufacturing process, good relationships with clients and suppliers, an extensive distribution network or simply a solid team of employees.
- Step 2: Relevance Next, determine the markets for the products or services that stem from your core competencies. For whom does the company stand out? How can you make money from this distinctiveness? Market research is key at this stage. It may be helpful to hire an outside consultant to help systematically evaluate the opportunities available in markets near and far.
- Step 3: Versatility Once your market is decided on, it's time to assess how you can best serve it. If your company's capacity to generate value is based primarily on its investment in equipment, then you will need volume to make this investment profitable. Equipment planning plays an important role at this stage. If, on the other hand, your value is based primarily on know-how or experience, it will be easier to adapt to variations in market opportunities. In this case, you should choose your equipment to make the most of the firm's knowledge.
- Step 4: Lean operations The goal of lean operations is to reduce waste—activities that don't add value— in your business. Lean operations allow you to provide your product or service as quickly as possible, without sacrificing quality or increasing cost. In fact, they may reduce cost. To foster lean operations, you should eliminate or simplify all processes that don't ultimately create value for your customer. Ask yourself, what is needed to make the company's operations efficient and effective? Which activities add value and which don't?
- Step 5: Commitment and teamwork Staff the company with individuals who have the right aptitudes and attitude. Make them aware of what the company is all about. Give them the opportunity to participate in a common challenge. Act as a coordinator and a facilitator. Take care of those people who look after the company. Encourage a culture of inclusiveness.
- Step 6: Continuous improvement Make it a priority that your company is always becoming better at what it does. Committing to a process of continuous improvement means a constant focus on improving productivity and quality. It's a process that never stops.
- Step 7: Simplicity Make administration as light as can be. What information is truly needed? Why? When? You can avoid decision bottlenecks by clearly assigning roles and responsibilities. Transparent accountability is essential. Decide who is responsible for making decisions, who has input, who implements decisions and who follows up.
- Step 8: Vigilance Closely monitor trends and changes in the company's business environment. Keep data about your key performance indicators (KPIs) at your fingertips so you will quickly notice any developments in your business. Competitive intelligence is the process of maintaining up-to-date information on your competitors. It's important to take a focused approach to gathering this intelligence. Decide what type of information you need for strategic reasons, and then assign clear responsibilities for collecting, organizing and analyzing it. Gather information about your industry that can help you improve your strategic approach and specific processes. Be sure to evaluate how applicable these strategies will be to your particular business. What works for one company may not work for another that has a different strategic direction, business model or workforce composition.
Content in this section is provided in partnership with the Business Development Bank of Canada. BDC provides entrepreneurs with financing, venture capital and consulting services. To find out more go to BDC.ca.