A recent McKinsey survey found that nine out of ten executives ranked organizational agility both as critical to business success and as growing in importance over time. The benefits of enhanced agility, according to survey respondents, include higher revenues, more satisfied customers and employees, improved operational efficiency, and a faster time to market.
Research by Don Sull, professor of management practice at the London Business School and author of The Upside of Turbulence, revealed three distinct types of agility: strategic, portfolio, and operational. Strategic agility consists of spotting and seizing game-changing opportunities. Portfolio agility is the capacity to shift resources—including cash, talent, and managerial attention—quickly and effectively out of less promising business areas and into more attractive ones. And operational agility involves exploiting opportunities within a focused business model.
Many organizations rely on a single form of agility — companies like Southwest Airlines or Tesco excel at seizing operational opportunities, while private-equity groups like TPG Capital or Kohlberg Kravis & Roberts (KKR) succeed through active portfolio management. In turbulent markets, however, overreliance on a single type of agility can be dangerous. An operationally agile company, for example, is at risk if its core business becomes less attractive. By detailing how companies have enhanced each type of agility, this article seeks to help other managers do the same. Source: The McKinsey Quarterly, December 2009
Comments