PurposeThis study examines the impact of organisational agility on the performance of higher education institutions. It also aims to explore the mediating role of various capabilities, namely, service innovation, technology capability, learning capability, and collaborative knowledge creation, in the agility-performance relationship.Design/methodology/approachThe sample of this study includes teaching staff of two prominent state universities of J&K, India. The study employs Exploratory Factor Analysis (EFA) and Structured Equation Modelling (SEM) for scale purification and hypotheses testing.FindingsThe results show that organisational agility positively influences performance of higher education institutions. Capabilities, namely, service innovation, technology capability, learning capability and collaborative knowledge creation, partially mediate the organisational agility-performance relationship.Research limitations/implicationsThe sample comprises teaching staff of two established universities of J&K, India.Practical implicationsFor sustenance in the turbulent environment, higher educational institutions should employ practices like regular modification of academic programs, increasing the speed of logistics activities, investing in high-ended software and hardware facilities, and developing an open environment for the exchange of ideas by employees. Policy formulation should encourage adopting agile practices in higher education institutions for enhanced performance.Originality/valueThis paper focuses specifically on organisational agility and its impact on the performance of higher educational institutions. The study contributes to the agility literature by testing the mediating roles of service innovation, technology capability, learning capability and collaborative knowledge creation collectively in the relationship between organisational agility and performance, concluding that all these capabilities except service innovation enhance the effect of organisational agility on performance.