The Three Levers of Digital Agility

Back in the early 1990s, a new term started to appear in the general management and manufacturing literature: “agility”. Experts argued that to be successful in volatile industries, companies had to be agile; they had to respond to opportunities faster than competitors. Doing so, it was said, usually required firms to focus on one of three main areas: their managerial behaviours, their employee behaviours or the structure of their organizations. 

Flash forward 30 years, and agile still gets a lot of attention among organizations needing to act quickly. But, as Abayomi Baiyere and his co-authors argue, those established definitions of agile and old, siloed ways of practising it don’t hold true in today’s digital era. 

“It’s not that those concepts aren’t still relevant — they are — but they’re no longer giving us a full picture of the shifts we’re seeing,” says Baiyere, an associate professor at Smith School of Business who researches digital transformation. 

As he and his co-authors argue in a 2022 paper published in the Journal of the Association for Information Systems, a more complete picture of digital agility requires a lot more integrative thinking. In other words, those areas of managerial behaviours, employee behaviours and structures should not be viewed as separate entities but as all being necessary when following agile principles.

Baiyere and his colleagues came to this conclusion after doing a deep dive into prior research on agility and observations from their empirical research on digital firms. The discrepancy between the two came as a “surprise,” says Baiyere. “What we learned from the literature appeared not to be holding true in the empirical cases, and so that led us to this new conception of digital agility.” 

In conversation with contributor Jordan Whitehouse, Baiyere explains this new conception and what it means for companies trying to be agile in a digital world. 

Why do you think it’s important to update our conception of agile now? 

I use the acronym TOM to capture my thinking around this. The “T” stands for technology, and this is the fact that a lot of technology is generative now compared to the past — it can be widely applied in a number of ways to create value. 

The “O” stands for organizational boundaries and how they’re blurring more than what we’re typically used to. Companies that are trying to capitalize on these new digital technologies are often collaborating with other companies and external resources to do so. 

And then the “M” is market convergence. This is the idea that when companies adopt digital innovations, they may not be just competing in one industry anymore — there can be a crossing of boundaries. Think of Tesla. It’s crossing the boundaries between being a software company and an auto company. 

So if you find yourself in a context with these three things prevalent, you do need to recognize that the traditional notions of agility may not be sufficient for your organization. You need to start recognizing that there’s a shift and that’s what digital agility is capturing. 

So how is “digital agility” different from what we understand agile to be? 

It’s really about changes in how the three levers of agility are conceptualized — managerial behaviour, employee behaviour and structure. 

In the past, you could just focus on your own organization as a manager, but now it’s not enough. Now you need to think about what’s happening both inside and outside of your organization. With employee behaviour, in the past, organizations were run with the assumption that their own employees were their biggest asset. That may still be true, but with the advancement of digital technology, rarely does an organization have all the talent to compete in the digital age — they probably have to look outside the organization.

And then structure, which generally means the more permanent attributes of a company, like product structures and process prescriptions. In the past, these were often like cement; when these structures were new and wet, you could play around with them, but when they dried, they became rigid and unchanging. But now in this new digital age, to be agile, those structures have to be adaptive, more pliable, like clay. 

When you talk about practising digital agility, are you referring to behaviours, skills or both? 

It’s a good question, but no, it’s not just one or the other. We’re trying to say that you can’t think of these with the same siloed view as you might have in the past. We’re saying that it’s everything — the managerial and employee behaviours and structure all play a role. It’s about the structures being adaptive but it’s also about thinking about which of the actors you’re going to rely on, and some of those actors may not be within the boundaries of your organization.  

What might challenge or discourage digital agility in an organization? 

One of the key challenges is related to what we call the “constraint time frame.” The thing about agility is that you need to act within a certain period of time. If you miss that window, then the ship has sailed. And I think that’s a challenge for organizations. You also need to be prepared prior to that window opening up, and that’s tough too. 

On the one hand, how many resources do you devote to hoping for that eventuality? On the other, if you don’t devote any resources to this, you could be relegated to the history books. So that’s a big question most managers are struggling with.  

Can digital agility only be practised at the organizational level, or can it also be deployed at the project level? 

We actually think about this as an “and”, not an “or”. Both are needed. In the digital era, it’s just not enough to focus on one. Because if you have the strategic agility — leaders with great ideas, for example, can foresee what’s going to happen — you also need the operational base to actually make that happen. So it’s a combination. And that’s why we named our framework an “integrated framework.” You need to do all of this to actually be agile in the digital era. You can do one — that will contribute — but one alone is not going to lead you to digital agility. Digital agility comes from this combination.