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AGILITY, FINANCIAL PERFORMANCE AND INDUSTRY UNCERTAINTY
The results show that the relationship between agility and financial success is affected by an important contextual factor: the industry’s uncertainty. The faster the pace and volatility of change in products, services, technology, and operating models, the more important agility becomes. This is a new and significant finding with critical implications.
In moderate uncertainty industries, the levels of agility seem relatively unrelated to performance. In high uncertainty industries, like technology, media, telecommunications, financial services, and consumer goods, performance increases with increasing agility, although we again see a drop in performance for top quartile agility scores. In this subset of data, the agility performance advantage is 2.4 and 1.9 for the third and fourth quartiles of agility.
The number of firms from low uncertainty industries, such as construction, natural resources, and the public sector, was too small and the wide dispersion of their financial results was too high to make meaningful conclusions. However, the general pattern of performance in low uncertainty industries suggested that 1st quartile agility levels were associated with low levels of performance followed by a significant increase in performance for second quartile firms, and then a dramatic decline in performance for third quartile levels of agility. There were only two fourth quartile firms with wide performance differences.