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LEAD Innovation Blog

Read our latest articles on innovation management and innovation in a wide range of industries.

Date: 13-Aug-2019
Posted by: Tanja ESCHBERGER

Agility: Definition and significance for innovation management

 

What does the term agility actually mean in practice and how is agility used in innovation management? We will answer these questions in this article.

Agility: Origin and development

The concept of agility has existed since the 1950s in the systems theory of organizations. The so-called AGIL scheme was developed by sociologist Talcott Parsons and is based on four functions that each system must fulfil in order to maintain its existence:

 

  • Adaptation (Adjustment):Ability to respond to changing external conditions.
  • Goal Attainment (target tracking):Ability to define and pursue goals.
  • Integration (incorporation):Ability to link the various elements of a system (cohesion) and to ensure cohesion (inclusion).
  • Latency (perpetuation):Ability to maintain basic structures and value patterns.

 

Paper Agile innovation management

In the 1990s, the concept in its adapted form found increasing application in the production sector and is now experiencing a further increase in significance with Industry 4.0. Agile Manufacturing focuses above all on rapid product development (simultaneous engineering), multi-functional teams and the ongoing optimization of production processes during the process.

Since the beginning of the 21st century, the concept with methods such as Scrum is also found in software development. The so-called "manifesto for agile software development" offers an action orientation and defines principles how agile software development should be designed in order to generate the postulated advantages.

The current trends in the business world and the associated challenges make the concept of agility increasingly interesting for the organizational sector. Companies are increasingly orienting themselves towards the principle of organizational agility. The focus is no longer only on production and software, but also on the transformation of company divisions or even entire companies in the direction of agility.

 

The three central aspects of agility

The term agility is often used inconsistently in literature and in the professional context. If one focuses on current practice, three essential aspects that define agility emerge:

1. Fast adaptability: companies react quickly and dynamically to changes and are able to quickly adapt processes to exploit emerging market potentials without delay. They do not act reactively, but proactively, anticipatively and proactively in order to carry out necessary adjustments. The exchange with and learning from business partners promotes rapid reaction to market changes.

2. Customer centricity: increased collaboration with the customer enables companies to react quickly and anticipatively to customer wishes and to quickly transform customer reactions and voices into market knowledge. The agile approach is characterized above all by short cycles and iterations, progress in small steps and the possibility to react selectively and quickly to customer wishes.

3. Agile attitude: An "agile mindset" in companies leads to changes in the behavior and working methods of the members of the organization. Agile leadership, for example, involves an employee-centered understanding of leadership, is less hierarchical, but does not mean less leadership. Together with an agile corporate culture, agile personnel and leadership tools create the framework for working independently of time and place, which increasingly takes place in networks and on digital platforms. Companies also rely on agile working methods such as Scrum and Design Thinking in order to arrive at innovative solutions faster.

Agility can thus be understood as a high form of adaptability to market changes and customer needs, supported by a flexible agile organizational structure.

 

Agility and innovation management

Agile innovation management is particularly advantageous when, for example, less predictable phases in the innovation process, such as concept or prototype development, require special adaptability and one wants to react quickly to changing customer requirements and technological change.

Agility is particularly important in the development of business model innovations, as the complexity and degree of novelty are very high here, while the predictability is low. Agile methods are also suitable for breakthrough innovations and for conquering new markets or industries.

For a consistent orientation of innovation management towards agile principles, the following aspects in particular are of high relevance:

  • Openness:
    Agile working means supplementing or replacing rigid processes with flexible iterative loops and manageable subtasks. However, this is only possible if employees and teams can work independently to react quickly to changes. To do this, it is necessary to communicate openly with employees in other departments, for example, and to make individual tasks transparent - instead of hiding behind secrecy. Companies can therefore implement innovations faster and more efficiently if they deal with them internally or even externally in an open, participative manner.
  • Prototypes:With software products, product improvements can be carried out simply by means of updates after the release. In the case of physical products, this is usually hardly possible after their launch. Nevertheless, this principle can also be used for the development of innovations in product development by creating prototypes. According to the principle "Do it. Adapt it. Perfect it. or "Build Measure Learn", users can still try out unfinished versions. The feedback is then used to make improvements that tailor the product perfectly to the customer's needs. Prototypes do not always have to be functioning product samples; often a video or a sketch already helps to explain the basic functions of the new product.
  • Teamwork:With agile innovation, the boundaries between teams and departments or manufacturers and users are dissolved. The focus is not on competition, but on the joint achievement of a goal from which all participants benefit. This is not only about customer feedback, but about networking and knowledge exchange between companies, employees, stakeholders and customers - the entire ecosystem. Open innovation approaches, development cooperations or incubator programs that have established themselves across industries are an expression of this principle.
  • Adaptability:Planning a project through and then implementing it strictly according to this plan is in many cases no longer the best way to success. Requirements change too quickly and new challenges are inevitable. With an agile innovation approach, however, adaptations are not a problem. Because it is no longer just a matter of reacting to changing external requirements, but of being adaptable at every stage of the innovation process and thus actively acting. With flexible innovation processes and a corporate culture that promotes adaptability, companies can successfully meet new challenges.

The German Postbank, for example, shows how agile principles can be put into practice. The "Postbank Idea Laboratory" innovation platform opens up the entire innovation process, enabling direct cooperation with external parties at various stages of the development process. In collaboration projects with customers, the company identifies needs and wishes, for example, which can then be tested as prototypes.

Another example is the global Bayer Group, which has created an internal platform through which employees from all divisions and countries can easily contact each other when support is needed for innovations or research projects. This not only strengthens the sense of community and motivation to work together, but also exploits the potential for synergies within the company.

 

Conclusion: Agility as the highest form of adaptability 

Agility is the key to innovation and rapid adaptability - it acts as a catalyst in innovation processes. By using agile methods in innovation management, changes can be anticipated at a very early stage and successful products can be brought to market faster and with high quality. Agility is therefore an essential factor for maintaining competitiveness and thus for the survival of a company.

Agile Innovation Management

Tanja ESCHBERGER

Born in Lower Austria. At LEAD Innovation she works as Head of Innovation and focuses on agile innovation management via SCRUM.

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