For this topic, it is today required to first stop thinking about three things and clear the mental decks.
"Agile" with a capital A
"Innovation" with a capital I
"Performance" with a capital P
With a slate cleared of all that competition, the concept of agility is far simpler to set forth.
As an idea, agility has value only in terms of activity addressing a need on demand. It is a characteristic of an ongoing behavior by an actor. But the primary determinant of our characterizing behavior that way comes from agreeing that the behavior is appropriate, in real time, to the demand, even as the demand changes over time.
That means we can see propriety, timing, and variety as the three major criteria for evaluating whether agility is justifiably claimed for the behavior. In other words, an omission, defect or error in any of the three criteria might disqualify the behavior - and certainly combinations of individually failing criteria make disqualification even more certain.
That, and no other reason, is what makes agility something that we view as being "manageable". Using management, the first order of business is to prevent failures in the three key criteria of behavior. The second order of business is to cultivate reliability of the capability to intentionally behave with agility.
Built for Change, and Aligned to Value
So, when is an actor "agile"? Now the answer is simple. Meeting the three criteria effectively on demand can, if management is right, be a standing attribute of the actor. Being agile is a state of preparation that allows agility (a particular type of behavior) to be generated when required.
In all instances of agility, what becomes true is that the actor obtains positions, on demand, that avoid inhibitors, or support leverage, for an intended type of progress. We define progress as the degree achieved of reaching an intended point B from a starting point A, regardless of what point B is.
One of the most underappreciated meanings of this simple definition is that point B and point A may be identical, but the "progress" involved is to maintain that position despite pressures working against it. This is clearly the subject matter of continuity, sustainability and risk management. That is, one of the major benefit (value) propositions of agility is to lower or eliminate risk against detrimental changes. Let's call it "defense".
In parallel, another major benefit proposition of agility is to be able to exert influence as necessary by having a timely position for "progressive" action. Let's call it "offense"... This makes the subject matter change, flexibility and advantage management
Boxer Marvin Hagler, positioned just in time, famously avoids taking a hit while simultaneously dishing one out to Tommy Hearns. (Image found on Pinterest)
The Reality Check
If we now go back to the three things intentionally sidelined earlier, they can be seen clearly in terms of agility.
First, "Agile" with a capital A would not have been necessary in the beginning except that developers needed a different kind of business governance of their operation. That need led to four tenets that in a nutshell gave developers the autonomy to work directly with customers, set expectations, and be recognized for streaming practical value as output, rather than only for delivering a "big bang" package after long and risky delays. In that new approach, demand was less likely to vary over time in ways that developers were not aligned to address. Other kinds of operations, not just developers, should also look for ways to remove blockers between skill-sets and time lapsed to accepted value. Those answers need not be called "Agile" even if they are inspired by Agile. In fact, most importantly, rather than pursue some orthodoxy of technique at a larger and larger scope of operational coverage, a proliferation of a culture of agility is actually more rational as a strategy of agility at scale. Too many organizations already mistake management standardization at scale as the format of agility at scale, then fail and suffer a backlash.
Second, "Innovation" with a capital I is not really the same thing as creativity or invention or agility. Innovation is a special case, in which something is changed in a given context that, for that context, is unprecedented as a possibility or prescription for a given effect. Nearly always, the difference in question is not even recognized as an innovation unless a desired effect is achieved. As an effect with value linked to timing as well, innovation can be served by agility. Since taking new positions also offers new points of view, agility may foster ideas or discoveries that can become innovations. But the bottom line is, agility does not cause innovation.
And third, "Performance" with a capital P is, like innovation, something that is served by agility. What performance adds to the consideration comes from its definition. Performance is the degree to which an actual outcome of effort represents an intended outcome. The relationship of agility to performance is mostly as a type of precondition or success factor. With agility, inhibitors of positive performance have less influence, and opportunities for progress may be more readily available under changing conditions. Arguably, the more volatile and unpredictable conditions are, the more valuable agility can be to positive performance. But agility does not prevent the actor from taking the wrong actions when in better positions.
Seen as the Actor, the organization usually finds that its ability to behave with agility means that its internal structure must allow itself to be dynamically reconfigured on demand. The probability of being able to do that repeatedly while staying coherent is extremely sensitive to the architecture of the organization. If there is no verifiable architectural view of how actions and interactions within the organization can be dynamically reconfigured, then agility per se is probably not a realistic expectation of that organization's sustainable state.