Breakthrough Business Models

Agility

How failing fast can build resilience

Developed by Volans, and building on research from Judge Business School in Cambridge UK, this section profiles a set of business model features that are profoundly reshaping today’s markets. We explore how executives and entrepreneurs alike can harness these new models to deliver on the Sustainable Development Goals. This work expands on Volans' 2016 report, Breakthrough Business Models, written for the Business and Sustainable Development Commission. Read an introduction to this resource on Medium

Agility in a nutshell

Status quo: Change-as-Usual

An agile and adaptive organisation

  • Where the use of technology helps organisations make decisions that better reflect market needs, allowing real-time adaptation to changes in those needs
  • Often results in greater value for customers and lower cost for companies

Future quo: Breakthrough

... is more resilient to failures in trialling novel business models

  • Where achieving the SDGs will require intense cycles of trial and error of new business models.
  • Given the scale of the SDGs, and the increasing complexity of businesses’ operating environments, internally, organisations need to nurture the mindsets and cultures to stimulate innovation, while building-in levels of redundancy to accommodate necessary failures
What is it?

The ability to create new markets, fast

Originating from the software industry, ‘agile’ is widely associated with having a ‘start-up’ mentality, and the ability for an organisation to ‘pivot’. According to Eric Ries (entrepreneur and author of The Lean Startup), “Lean manufacturing has been driving productivity for decades. But what if you are efficient at making something that nobody wants? What creates value for a startup is learning if we are on path to a sustainable business”. In the product development phase, agile or lean businesses keep costs low by simply creating a “minimum viable product” that can be quickly tested, and iterated upon.

Others, among them Peter Fisk, go a step further. He urges businesses to become “market makers”, redefining markets not just by launching a new product, but by creating a new demand and future market reality. To do so, businesses need to start quickly, make mistakes, learn, and critically, ‘pivot’ the business to where the best opportunities lie.

Within business models, agility is represented usually through the ability for a business to respond and meet the specific demands of customers (both current and potential). A Cisco and IMD 2015 report refers to this as “hyperawareness” – a company’s ability to detect and monitor changes in its internal and external business environment.

In the case of Uber, the platform encompasses an internal decision-making system that responds to customer demands based on location and directing drivers to locations with a higher probability of finding customers. Note that agility applies to both digital and non-digital businesses, though digital businesses are most likely to play the new game.

DHL, for example, is rolling out the use of Augmented Reality technologies globally to help its warehouse employees have direct, immediate access to accurate and optimised information about the location, and quantity of products that need to be packed. Or consider the growing ability for companies to tap quickly into additional intellectual resources from platforms like Upwork or GitHub exactly when demand requires it.

What's driving it?

Real-time, anytime

The key to this market trajectory is the rapidly evolving ability to access and process real-time information on user experiences and market conditions, which in turn, is informing business decisions continuously. Key drivers include the existence of tracking technologies such as GPS and of increasingly connected devices (the Internet of Things), plus affordable sensors allowing data to be captured in new ways, and the linked use of Big Data and Artificial Intelligence to process data into meaningful decision-ready information and intelligence.

On the production side, businesses are now able to physically create basic prototypes, known in the Lean Startup movement as “minimum viable products”, much more rapidly through the use of CAD (Computer Aided Design) softwares and technologies such as Additive Manufacturing.

What are the opportunities and risks?

Culturally agile leaders and organisations

The challenges presented by the SDGs are complex and constantly evolving. Failures are both inevitable and necessary. So business and other players trying to address the SDGs will need to be agile. Internally, sustainability-related information needs to be part of the broader data set that executives and employees across the organisation become “hyperaware” about. Companies also need to be organised in the best way to deliver value, for the business, for society and, ultimately, for the planet. This McKinsey article offers some practical examples of how to create more agile organisations.

Get started

How can companies engage?

  1. Are there mechanisms in your organisation to quickly assemble agile, self-organising teams with the relevant talent drawn from different functions? Are there barriers to do these mechanisms?
  2. Are you evolving new methods to ensure that the right outcomes and impacts—on the business, as well as on wider society—are targeted and achieved? How are R&D, marketing and other functions in your organisation incentivised to do this?
  3. Have you introduced a broader, ‘outside-in’ focus in terms of information made available to staff? Providing staff with information on SDG-related issues, for instance, can help trigger new product and market opportunities.

Get in touch

Project Breakthrough is looking to feature ways that organisations, from startups to corporations, are using innovative business models to help achieve the Sustainable Development Goals.

Please get in touch if you would like to suggest an example.


Other Breakthrough Business Models

Exploring how executives and entrepreneurs can harness an evolving set of business model features to deliver on the Sustainable Development Goals.


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