Thought Leadership Series by DJ Ho

The Agile Corporation
By DJ Ho B.Bus (Accounting) LLB (Hons) Grad Dip Legal Cert

The phrase “agile corporation” was first coined by Bill Gates, CEO of Microsoft to describe a new style of corporate entity that was nimble, flexible, fluid and responsive enough to meet today’s ever-changing corporate environment. The term agile corporation invokes images of a large semi-visible skeleton that is able to jump, hop, sidestep and maneuver with ease. The concept of agile corporation was relevant to Bill Gates as his company was faced with ever decreasing software production costs from the sub-continent, rapid globalization through the internet’s capabilities to unlock new areas of commerce, as well as anti-trust litigation threatening to split up Microsoft’s dominance.

Is the concept of the “agile corporation” relevant to today’s managers? Yes, because agility is the only way that corporations can thrive in today’s rapid white water environment.

The rapid and fluid environment that we live in consists of major changes to the status quo. We have been through and are continuing to experience privatization and deregulation of our traditional industries. Consider that industries that were once dominated by fierce competition of several major players have now been forced to merge to continue their growth. Our workers and their needs are also changing, as they look to develop work-life balances and the gradual influx of generation Y employees to workplaces dominated by baby boomers and generation X. Our ability to communicate more rapidly has reduced time lags on market movements. What happens at the NYSE will be reflected almost simultaneously seconds later at the Hong Kong Stock exchange. And more importantly the way we do business is changing. Before personalized service was a key factor in deciding who we did business with. Now, we pay our bills over the internet. We order stock in real time from our suppliers using just in time systems. We can service millions of customers using e-commerce platforms instead of stores and cash registers.

But are we changing at a rate greater that the past? Yes and No. There is an argument that today’s changes are no different to changes in the past. Is the internet all that different from Gutenberg’s printing press that resulted in the explosion of information? Are rapid advances in science any different to when Madam Curie developed radioactivty? Yes, because as society becomes more educated, as society places more money into research and development, as industries become more competitive over time, as people become globally aware, advances in society will continue to grow at an exponential rate. Therefore the rapid water environment will only become more turbulent.

Therefore, the corporations that recognize or pre-empt the changes of this rapid white water environment can gain a first mover advantage and adopt a market leading position. By the time the “inflexible” competitors respond, the agile corporation has already entered the market, determined which sectors are worth servicing, and grabbed the attention of the potential customers. In addition, a first mover advantage is that customers will already recognize the brand name and can quickly build up a reputation.

But what makes a corporation agile? Agility refers to the ability to respond quickly and to move with ease. Experience shows that larger organizations, particularly multi-nationals tend to be less agile that their smaller competitors. This is obvious as bureaucracy levels increase with organization size, as well as the longer time experienced to implement plans and decisions. More formal procedures create a culture that is resistant to change. Flatter organizations with less links in the chain of command can respond at much greater speed.

But will responding quickly be good enough? More is required that just making fast decisions. Companies need to foster an innovative culture, develop forward looking plans that are flexible, anticipate market movements as well as having employees that can create change.

By that time, the agile corporation will be the first one paddling up the rapid whitewaters.

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I wrote this article when I was in my fifth year of uni. This article didn't count for anything - it wasn't a uni assignment. I just sat down one day at the uni computer lap and wrote it straight off from the top of my head, so its raw and unedited like a Jay-Z freestyle in a studio.

It has and will always be a dream of mine to be a business journalist and this article was designed for the opinion section of the BRW. The plan was to write a whole series, like the McKinsey Quarterly News Update.

I think the biggest compliment I got from my brother was like "You sound exactly like those people in the BRW" lol.

Tell me what you think.

I'm out like the three remaining workdays,

DJ Ho.

p.s. Those academic qualifications are for real playa.