The Agility Imperative

Survival of the Fittest

What Are the Opportunities For the Agile Company?

  • Agile companies can adapt their business models quickly and thrive in a rapidly changing business environment.
  • They can exploit rapid scalability, network effects and positive feedback loops to achieve unstoppable momentum and dominate their sectors.
  • Agile companies avoid the value-destruction created by short-termism by focusing on long-term strategy, growth and sustainability.
  • Their innovative and non-traditional approach to corporate culture allows agile companies to outperform by attracting and retaining the best and most appropriate talent.
  • Agile companies seek alliances and partnerships which enable the pooling of core expertise to respond rapidly to changing customer behavior.
  • By eschewing ownership of fixed physical assets in favor of asset-light business models, agile companies generate attractive cash flows with low capital expenditure and working capital needs.

What Are the Challenges For the Agile Company?

  • The ability of agile companies to dominate sectors and industries can lead to anti-competitive and monopolistic behavior.
  • Embracing agility requires substantial investment risk and self-disruption of tried business models.
  • The increasing use of automation and AI by agile companies will take a toll on human workers engaged in low-skill, repetitive and process-driven roles.
  • Non-traditional corporate structures and decentralized autonomous operating models may present risks around corporate governance and compliance.

The pace of corporate evolution is accelerating as the year 2025 approaches. Society is undergoing a period of unprecedented technological and cultural disruption and upheaval. Agile companies which adapt quickly to this new reality will thrive while those that choose to rely on existing assets and brands face extinction.

Fewer Winners / More Losers

When change comes, it is rapid and unpredictable. In such circumstances, sticking with conventional wisdom becomes a dangerous liability. In medicine, the discovery of the helicobacter bacterium in 1982 completely upended established thinking on the treatment of stomach ulcers, despite initial resistance. In doing so, it transformed the treatment and the lives of hundreds of millions of sufferers.

Disruptive business models are also smashing current paradigms and creating new ones. Asset-light companies like Uber, Facebook and AirBnB are taking advantage of network effects and positive feedback loops to build unassailable dominance. Unless they embrace disruptive change, their less agile competitors will go bust. We believe agility will become a mandate for survival – the winner-take-all future.

Here we present the highlights from ‘The Agility Imperative’, the sixth chapter from Imagine 2025 – Themes, Opportunities & The Law of Accelerating Returns, an examination of the global drivers of parabolic change.

To read the main Imagine 2025 Report in full, or for more information, Register Here.

Disrupt That Ye be Not Disrupted

Creative destruction is a powerful force in industry but it is engaged in a battle royal with the well-entrenched forces of corporate inertia. Even as the business world experiences a period of unprecedented upheaval at the hands of disruptive technologies (digitization, automation, artificial intelligence) the potential winners and losers from this massive paradigm shift are becoming obvious. The survivors and heroes in this brave new world will be those that react swiftly and devise new strategies. Those that struggle or go into denial, such as Blockbuster Video at the dawn of streaming technology, are doomed.

While the successful companies are willing to move fast and break things, the failures share several value-destructive characteristics: rigid organizational hierarchies, a strong aversion to risk, and short-term thinking driven by the need to report results to shareholders on a quarterly basis.

Our modern, technology-enabled business environment enables rapid scalability, network effects (where the value of a system increases as participant numbers rise, think Facebook or Uber) and feedback loops (where a positive experience with a company becomes self-reinforcing). These forces are leading to a situation where successful companies achieve unstoppable momentum and where marginal performance advantages are disproportionately rewarded: the few winners therefore become category killers that dominate their sectors to such an extent that competitors are no longer able to dislodge them. At the same time, negative feedback loops can rapidly destroy a company’s reputation, brand and value.

The Wall Street Journal: Uber vs. Facebook - valuation years from launch

  • According to a KPMG survey of CEOs, almost six out of 10 business leaders are concerned that their organizations lack the capabilities and innovative processes to respond to rapid disruption.
  • An Accenture study revealed that while 52% of corporate employees surveyed had pursued innovative or entrepreneurial ideas, only 20% said that management was supportive of their new ideas.
  • 80% of executives would decrease discretionary spending (R&D, advertising, maintenance, etc.) and over half would delay the start of a project to achieve their quarterly forecast earnings target. – Duke University survey.

The Four Horsemen Against the Apocalypse

In a period of accelerating change like the present, it is often the companies that focus on the long term that are the most agile.These companies share several core attributes. In ‘The Agility Imperative’ we distill the essence of those defining characteristics into the Four Agility Mandates. These are:

Get the full report today.

For additional insight into the forces of change impacting the future, read the full Imagine 2025 report.