What is Business Agility?
Business Agility is a Hypothesis-Driven Business Management approach providing the business with high adaptability to constantly shifting market conditions, customer preferences, and business constraints. This is achieved through a set of concurrent and continuous activities across the organization.
- Test investment HYPOTHESES
- Reveal and promulgate UNCERTAINTY
- Reassess and accelerate VALUE
- Preserve and manage OPTIONS
- Provoke actionable FEEDBACK
- Generate directional FLOW.
Note that there is no clever/forced acronym here. Let’s explore the first three activities for now.
Test investment HYPOTHESES
An investment opportunity is expressed as an outcome hypothesis that can be tested in order to prove it true or false, rather than as a demand for specific output or work product. Instead, we empower and facilitate a business posture of trying to shoot investment ideas down, early and often. We do so by describing upfront our best guess for how to disprove our stated investment hypothesis, thereby putting a deliberate and clear target on every investment idea. All ideas must have at least one proposed test. Rather we disprove it early than the competition, or even worse - our customers, right?
Reveal and promulgate UNCERTAINTY
The inherent uncertainty of the modern business and its environment cannot be revealed, let alone managed, using language or measures of certainty, and yet too many of us find ourselves trapped in a perpetual ritual of exchanging declarations of certainty. “Reveal and promulgate” is more precise and actionable than the popular precept for this activity (“Embrace uncertainty!”) because it focuses on the continuous discovery and broad communication of uncertainty.
Business Agility uses hypothesis statements to reflect the true uncertainty in all aspects of the business, such as strategic priorities, investment opportunities, or role definitions. Hypothesis statements replace the pervasive use of commonplace terms such as “requirements,” as this term and its implicit business posture grant the request a false level of certainty that shuts down the continuous optimization for value and impedes the speed of its delivery. The term “requirement” is reserved exclusively for unbreachable limitations or standards, such as operational constraints, intellectual property rights, regulatory compliance, or safety thresholds.
Reassess and accelerate VALUE
One way that Business Agility achieves value acceleration is by maximizing the work not done. This acceleration approach is unmatched by any other business optimization, decision-making framework, or leadership style. Note, however, that this is absolutely not a recipe for taking shortcuts. Rather, it is a category of activities made possible when testing hypotheses and revealing uncertainty.
For example, if an investment hypothesis survives the test (or tests,) that’s a great outcome, possibly demonstrating that the business has good reason to continue to pursue it. If the hypothesis is invalidated, even at the first validation attempt, that is also a great outcome, as not only can we then reclaim all the funding and capacity that would otherwise have been wasted on an invalid investment hypothesis, but it also allows the entirety of the business portfolio to “shift left” and start its testing earlier than it otherwise would.