A Formula to Measure Business Agility

Measuring and managing your drivers of business agility

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Business Agility = (Visibility + Motivation) x Training

What this means is that companies will consistently earn an additional 2-4% profit if their people can clearly see what’s going on in their area of operation and if they have the motivation to respond appropriately. The effect of this visibility and motivation will be multiplied and magnified by the training people get. The better people are trained, the greater the results will be.

This formula identifies the main factors that promote agility and it shows how they interact with each other to produce different levels of agility. It points out what factors to measure when we’re trying to assess the level of business agility possessed by a company. Visibility can be measured by the technology and procedures a company uses to collect, store, disseminate and display information. Motivation can be measured by the incentives and authority people are given to make decisions and act to achieve company objectives. Training builds peoples’ skills for using visibility, for making good decisions, and acting effectively to achieve objectives. So training can be measured as well.

Wow. Now we can start to discuss agility best practices using a common and measurable framework to compare one practice to another (did I leave out something important?). This formula is either a very useful insight or it's the result of too much caffeine.

[Michael Hugos, principal at Center for Systems Innovation [c4si], finding elegant solutions to cmplex problems; mentoring teams in strategies for agility and agile systems development. See his book Business Agility: Sustainable Prosperity in a Relentlessly Competitive World.]

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Copyright © 2007 IDG Communications, Inc.

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