February 11, 2021
When faced with a crisis, companies should dial up two interdependent drivers — speed and agility — to seize opportunities.
Etsy is a U.S.-based e-commerce company best known for connecting individual crafters and artisans directly with consumers. But when CEO Josh Silverman heard in early April that face masks would be a key component of the general public’s fight against the coronavirus pandemic, he mobilized sellers — fast. Within days of the release of public health guidelines, Etsy had more than 20,000 sellers with masks ready for purchase. As Silverman put it, “It’s as if we woke up and it was suddenly Cyber Monday, but everyone in the world wanted only one product, and it was a product that basically didn’t exist two weeks before.”
This example highlights two interdependent drivers that have permeated the global business environment during the pandemic: speed and agility. Etsy’s booming sales also highlight what’s possible when businesses exploit both qualities simultaneously. While many retailers are struggling, Etsy’s revenue for the second quarter of 2020 is expected to increase by 80%. Academic research and anecdotal evidence show that Etsy’s experience is not unique; organizational speed and agility strongly influence company performance.
It seems obvious that when faced with a crisis, companies should simply dial up more speed and agility to seize an opportunity. But not all companies do. Speed is not simply an attribute of an organizational activity tied to clock time. Rather, speed is a complex, performance-enhancing organizational capability that requires a holistic approach to its development and execution. Speed alone enables companies to operate quickly only in already established product domains. During a crisis, companies must also demonstrate agility, a capability that allows the organization to change elements of its business model and/or pivot to adjacent or entirely new product domains.
Dr. Walter Ferrier, Professor of Management, University of Kentucky Gatton College of Business and Economics
MIT Sloan Management Review, October 15, 2020