Stephen Hawking is famously known for his quote “intelligence is the ability to adapt to change” and, being able to change quickly in business, ensures the continued, successful growth of an agile organization.
The definition of being agile is “being able to move quickly and easily”. However, business agility is the ability of a business to rapidly respond to change and in our fast-changing world, today, this ability to be agile is a matter of survival.
Some of our abilities as entrepreneurs is to come up with new ideas and create new businesses. However, all too often, ideas that seems great on paper and look amazing in a business plan, face difficulties when introduced to the market and to potential clients. This is where the entrepreneur’s agility is measured. An agile entrepreneur must pay attention to the market and give it what it wants. Being rigid and falling in love with your own ideas might lead to failure. Even if prospective Investors are happy to give you their money, if the market doesn’t respond well to your idea, you need to be able to let it go.
Being agile and able to react quickly to change can be a competitive advantage. It gives you or your organization the ability to overcome unexpected roadblocks, risks or market changes. It also means that you are able to quickly adapt to situations as they come along and, most importantly, protect your Investor’s capital.
Being agile, also means that when you identify a potential risk or a change that might impact a former decision you’ve made in the past, you have to act. You can’t just sit and wait for things to get better. You have to take action and that action has to be quick and decisive.
An example of such a decision is one that we made very recently. Following a protracted, four-month negotiation process, we had secured three beautiful office buildings, originally built in the 1800’s so were full of Georgian character and charm. We had agreed to purchase these offices and sensitively convert them into luxurious apartments.
Throughout the process, we have undertaken extensive due diligence of all aspects of the deal and negotiated the building purchase price to exactly where we wanted it. We worked with our construction team to accurately calculate the conversion cost and we undertook extensive competitive market research to know exactly what we could sell the apartments for and how long this process would take.
The financing was in place and our Investors excited about being part of the project, not only because of the nature of the buildings, but also for the returns they would receive.
However, just a matter of days before we exchanged contracts to purchase the building, we heard that another company had acquired a large development nearby and was soon to release 60 new apartments to the market within close proximity to our development. This was a huge set-back.
We knew we would still be able to sell our apartments, however now, instead of a short-term project, this would have turned out to be a long process that would not have yielded the returns we wanted for our Investors.
Whilst the decision to back out of the deal was quick, it wasn’t a pleasant one. We had spent months constructing the deal and, to have to walk away, really hurt. However, in reality, the only thing that would be hurt was our egos, whereas staying in the deal could hurt our Investors. The answer therefore was simple; we walk away.
Closing deals is very glamorous, walking away from them isn’t. However, imagine what would have happened if we haven’t reacted fast and walked away. We could have disappointed our Investors and our reputation could have been compromised, and all because we weren’t agile and able to react fast to the change in the market. Instead, we were able to offer our Investors an alternative investment; they remain happy and we protected their capital.
As an entrepreneur and a leader, it is your duty, not only to become an agile leader yourself, but also to make sure your entire organisation is agile and able to react fast to any market change. Research conducted found that agile companies grow revenue 37% faster and generate 30% higher profits than their non-agile competitors.
Agility means that you are willing and prepared to change direction when things don’t work out. It helps your business out-pace the competition and, whilst your competitors stay behind, unable to adjust, your business continues to be nimble and move forward to match the market needs.
Being an agile business also means that you’re able and willing to diversify instead of putting all your ‘eggs in one basket’. When the market changes in one area, the business diversification can be a shield, allowing your business to weather a storm.
Agility in business, not only serves your Investors or Clients, it also energises the leadership team, the managers and the employees. It forces them to be creative, innovative and deploy a methodology of anticipating and dealing with situations as they arise, rather than waiting for someone to solve the problem for them.