Business agility is the ability of a business to adapt quickly and appropriately to market and environmental changes. The concept of agility as a business attribute was drawn from the agile development model which allows for a team to collaborate in a setting of collective trust and competence and focus on small parts of a project in short sprints. This permits flexibility and responsiveness to changing conditions, and that is what business agility requires as well.
The result is less predictable than the traditional non-agile business model, where plans are fully mapped out and prioritized for months and even years in advance, and all the details are expected to be foreseeable. By contrast, an agile business may produce outcomes and products that are inherently unpredictable, but over time will form a pattern. Such businesses are better able to take advantage of hypercompetitive market conditions.
The self-organizing aspect of an agile business model is key to its success. The spontaneous, feedback-rich initiatives generated by different teams within the business–without top-down direction–lead to a level of creativity and innovation that gives the business an important edge in developing new products and services.
The agile business, with its dynamic decision-making structures, is also better able to adapt quickly to new products from competitors, new regulations, changes to the supply chain, and customer feedback. A traditional bureaucratic organization is inherently stifling to dynamic decision making, since the rigid hierarchies promote role-based decision making concentrated in a few people.