The business environment continually changes and if firms do not adjust to the fast changing needs of consumers, the changing competitive landscapes, and the need to acquire competent talent, their operations could be unprofitable. Given the unpredictable nature of the business environment, organizations are expected to be agile. There is a need for SMEs to rapidly and proactively identify and adapt to changes in the environment to mitigate the risk of being out-done by their competitors and to serve their customers well. This research investigated the link between organizational agility and performance of SMEs in Nairobi County. Judgmental sampling design was used and a sample size of 99 SMEs was selected from which 84 fully completed questionnaires were gathered and data analyzed. Employee engagement has a positive and significant influence while IT systems adoption and customer engagement were noted to have insignificant negative effects on SMEs performance. It was noted that 99.2% change in SMEs performance was explained for by change in employee engagement. The study recommends that top management should ensure employee commitment and locality which will then transcend to improved services delivery to their clients. However, IT adoption and customer engagement should not be avoided but their implementation should start with equipping employees with skills and competencies to not only meet customers' expectations – but exceed them.

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