How to Create Agile Business Models that Respond to Market Trends

By Andrea Fryrear, an EO Colorado member, author, and co-founder of Agile Sherpas, which helps leaders modernize marketing teams to work smarter, move faster, and deliver better results with Agile frameworks. 

There’s no hiding from the fact that modern businesses are under a ton of pressure these days. A daily barrage of economic, technological, and competitive challenges is making traditional business models feel increasingly obsolete. 

Adapting to the constant changes of the surrounding environment and business climate requires organizations to rapidly react and evolve, testing and iterating to uncover new, more efficient ways to operate. The framework that enables this type of organization is the Agile business model.

How Agile Orgs Are Different

What exactly differentiates Agile business models from their traditional counterparts? At their core, these business models view organizations as organisms instead of machines. That means they prioritize the ability to adapt and respond to change. This is done through the creation of an internal culture built around continuous learning and improvement, feedback loops, decentralized decision making, and a flatter hierarchy.

That’s a huge contrast to the way traditional organizations function, as they were designed to operate more like 20th-century factories, prioritizing making processes efficient over enabling them to evolve and change. That worked well enough when the world changed slowly, but today those rigid structures hold organizations back.

For example, Agile organizations create feedback loops throughout their teams and functions. These ensure that problems are identified quickly so teams can brainstorm and test ways to address them. Embracing change is built into how they operate. But beyond fixing things that are broken, these feedback loops are also about brainstorming proactive ideas for improvement that can be similarly tested.

The result is organizations that embrace continuous adaptation and improvement. Senior leaders set a strategic direction, the “what” that the organization wants to achieve, while individual teams are given the freedom to figure out how best to achieve those goals. This decentralized decision-making reinforces those feedback loops and makes the entire organization constantly evolve to meet new challenges the way an organism does.

The Importance of Culture and Mindset

It’s easy enough to look at the Agile business model as just a different set of practices and processes, but the difference goes much further. Agile business models are built on a foundation of culture and mindset. This is crucial because you can have all the Agile processes and practices you like, but without a mindset to guide them, they’re almost guaranteed to drift back towards traditional ways of working. So, when you’re thinking about Agile business models, remember that they really begin with culture.

4 Benefits Agile Business Models Bring

Aside from the general characteristics mentioned above, there are a few major benefits Agile organizations enjoy that are worth highlighting.

1. Improved Time to Market

Because Agile organizations embrace change more readily, they are far better at taking advantage of emerging opportunities and getting new products to market quickly. Instead of relying on waterfall development methods that draw out the time it takes to develop new products or projects, Agile organizations can plan, iterate, and deliver fast. Along the way, their feedback loops quickly identify bottlenecks and constantly find new ways to improve the processes needed to deliver value faster.

2. Better ROI

Agile business models place stakeholder value at the core of everything they do. This makes it easier to focus on the work that really matters. Or, put another way, Agile business models emphasize doing the right work at the right time instead of simply doing more. By focusing on understanding what these stakeholders find value and how best to deliver it, they are far better able to deliver return on investment. 

3. Reduced Stress Levels

Despite all the additional productivity benefits that Agile brings, that doesn’t come at the cost of more stress and burnout. In fact, it’s the opposite. This year’s State of Agile Marketing Report surveyed hundreds of marketers around the world and found that 80% of fully Agile teams were less stressed as a result of embracing Agile ways of working.

4. Better AI Integration

That same report also found that fully Agile teams were more than 3x more likely to have fully implemented AI into their processes compared to somewhat Agile teams. The report was unable to find any traditional marketers who had done so. This isn’t surprising, as Agile’s culture of adaptation and embrace of change makes it far easier to integrate major new technologies like AI.

Key Steps to Unlocking Agile Business Model Benefits

If you’re interested in experimenting with Agile business models, these four steps can help you understand the implementation process.

Step 1: Assess

No two Agile business models are exactly alike. By its nature, Agile is built on flexible principles, not rigid ways of working. The process of figuring out how best to adapt these principles to your organization begins with assessing your baseline. 

That includes metrics for your organization’s KPIs as well as Agile-focused metrics like throughput and velocity. Having a baseline will help ensure that any experiments run can be compared to your pre-Agile situation and helps create the foundation for the data-driven culture that you’ll be building. That means understanding your organizational culture, structure, and general readiness to begin the shift to Agile ways of working. This can be done on your own or with Agile coaches and consultants with experience implementing Agile in organizations like yours.

Overall, this is vital because implementing Agile is far easier when you have a clear “why” behind it. Clear internal communication around where your organization is now, why it’s trying to implement an Agile business model, and why it needs to will help greatly.

Step 2: Pilot

When implementing Agile, it just makes sense to do so in an Agile way. That means instead of attempting an organization-wide implementation simultaneously, launching an Agile pilot is a far easier way to learn valuable lessons with minimal cost. Or, put another way, Agile pilots function as a Minimum Viable Product (MVP), a common Agile technique.

The basic idea is that no two Agile implementations are alike. There will always be challenges unique to your specific culture, organizational structure, etc. Uncovering these challenges via a small-scale Agile pilot means that by the time you scale Agile to your entire organization, you have a far better strategy built on those lessons.

For example, you might learn that your existing culture is more resistant to change than you anticipated. In that case, more investment in coaching, training, change management, etc. may be warranted before scaling up.

Step 3: Scale

Once you’ve learned those vital lessons from your Agile pilot, it’s time to scale Agile ways of working more broadly in your organization. As you do this, it can be useful to leverage people from your Agile pilot as champions within your organization. You can also set up an Agile Center of Excellence as a source of information, coaching, and training for internal teams as they begin their own implementation journeys.

Bear in mind that as you scale you can also expect the benefits Agile business models bring to scale as well. The State of Agile Marketing Report mentioned previously has consistently found that when functions like marketing are fully Agile instead of simply having one or two Agile teams, they perform better across the board. This is because Agile teams tend to work better with other Agile teams. They share a similar mindset, culture, and understanding of how work happens that makes collaboration far easier.

Step 4: Continuous Improvement

Even once Agile has been successfully scaled across your entire organization, the process isn’t complete. In fact, it’s never really finished. Just like individual Agile teams, Agile organizations need to be built around continuous improvement. 

No process or practice, even Agile ones, will function well forever. To avoid getting complacent, it should be emphasized throughout the implementation process that Agile business models are always evolving and changing. Leaders, in particular, should model this behavior by embracing continuous improvement at their level as well as in individual teams.

On the organizational level, this often comes from strategic planning. Here, leaders can gather team leaders and involve them in the process. This makes it easier to really understand the challenges and capabilities of teams, merging that information with the perspectives and priorities senior leaders make to set the right direction for the entire organization.

The Future of Business Is Agile

It should be clear from the advantages offered by Agile business models why they are becoming increasingly standard in all kinds of functions and industries. Agile ways of working have been evolving for decades to handle the fast pace of modern business. This success has been such that in many organizations, agility is simply taken for granted and not specifically acknowledged.

However, unlocking the full benefits Agile business models bring is far easier when you actually know what Agile is and why you’re using it. So even if your organization is already employing some Agile practices like working in sprints or using visualization boards, it’s worth looking at both a wider and deeper Agile integration.