Agility is a broad term that can be used in a lot of different contexts. In business, we look at the flexibility and the ability of an organisation to rapidly adapt and steer itself in a new direction.
An agile business is prepared for changes in its internal and external environment and can react quickly to mitigate the impact or take advantage of opportunities that are presented.
External factors that can affect an organisation have never been more apparent than the recent curveballs that COVID-19 has thrown at us.
The uncertainty that all organisations faced in early 2020 was unprecedented and the need to rapidly adapt, as constant streams of new information flowed from every direction, was outright overwhelming.
From our perspective, we had to quickly adapt and interpret new information as the government rolled out, almost daily, legislative changes, trying to adapt to the economic environment that had instantly been flipped on its head. We then had to decipher this information and convey it to clients that same day!
Needless to say, organisations that were prepared for change and could pivot rapidly as new information flowed, gave themselves the best chance to succeed.
As such, they created a definite competitive advantage over other more reactive and rigid businesses.
To create such an agile environment, you need to look at every facet of your business and ensure that it is designed to deal with the ever-increasing pace of change and disruption, as well as clearly documenting and communicating this throughout your organisation.
This sounds like a daunting task to implement and in larger, rigid organisations, it can be.
However, there are a few basic pointers you can start to implement in order to prepare yourself for the next disruption.
1. Have access to real-time data
Gone are the days of clunky historic spreadsheets and shoeboxes of receipts. These are only good for keeping the taxman off your back but do not actually help you to make informed timely decisions.
For example, if you wanted to know whether to cut a product from your range, or whether you could afford to keep on all of your staff, you need to know how your business is performing right now!
Regularly maintained cloud accounting data files, such as Xero, can provide information to assist with these decisions instantly (if data is entered and captured correctly).
2. Maintain budgets & forecasts
This can often be seen as way too onerous a task for small businesses, that essentially use their bank balance as their scorecard.
But for those businesses that had readily adjustable forecasts in place prior to March 2020 and, as a result, could make hard decisions swiftly, the effort to maintain these has paid dividends big time during the first COVID lockdown.
Integrating your budgets and forecasts into your live accounting data file makes this task a lot less onerous, creates ongoing comparisons of actuals to budget and is not that hard to do. Reach out if you need help setting this up.
3. Flexible/Remote working arrangements
For a lot of industries, remote working is a way of life now as they were forced to adapt during the pandemic.
For agile businesses that had flexible and remote working arrangements in place, as well as the technology to support it, their attention did not have to steer too far from the business issues at hand.
However, for those not prepared, this was a massive disruption to core business and the downside of such arrangements were felt instantly.
As such, implement the technology and policies now, to ensure your employees can continue to contribute remotely. This will not only create direct business impacts (continued business operations, reduced overheads such as rent, etc) it will create a platform to be more accommodating to all employees.
Offering employees flexible working arrangements will also create a better work/life balance and will assist in retaining employees, who hold integral knowledge of your business and clients.
4. Establish an agile organisational culture
It is not enough that one person in the room decides to pursue agility. It is the whole organisation that drives it and buy-in needs to start from the top.
It is important to create the right environment where employees can experiment and continuously learn how to improve their business processes. Employees need to be empowered to make suggestions on improving processes and have the confidence that their suggestions will be heard.
The onus is not just on the leadership team to be open to suggestions, but also to encourage staff to speak up about their current and potential pain points and give them confidence that they will be addressed.
5. Plan for the worst
It’s a lot easier to quickly pivot when a curveball is thrown at you if you are aware that it might come your way.
Something as simple as a SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats) could allow you to anticipate real disruption ahead of time and build processes that can rapidly change if it comes to fruition.
Admittedly, not many of us would have specifically planned for a global pandemic, but being aware of the external environmental factors that could potentially impact on your business, would better set you up to deal with it and even thrive.
Business agility can be used as a throw-away term at times, but it does really get people thinking about how adaptable their organisation is to change.
The above pointers aren’t earth-shattering, but hopefully, it gets you thinking about how you can take some small steps, to better prepare for the ever-changing environment and inevitable disruption coming your way.
How can RSM help?
Please reach out to your local RSM adviser if you want to discuss how an agile business can mitigate the impact of changes in your internal and external environment.