Organizational agility and dynamic managerial capability are pivotal for small and medium enterprises (SMEs) operating in volatile environments such as Bali's dynamic business landscape. This study investigates the influence of human capital and innovative work behavior on organizational agility and dynamic managerial capability, with a particular focus on the mediating role of organizational agility. A quantitative methodology was employed, involving a survey of 166 SME managers in Bali using an online questionnaire. Data analysis was performed using structural equation modeling (SEM) with a partial least squares (PLS) approach to validate model reliability and accuracy. The findings reveal that both human capital and innovative work behavior significantly foster organizational agility. In turn, agility demonstrates a strong effect on dynamic managerial capability. However, the direct impact of human capital on dynamic managerial capability is limited, and innovative work behavior shows no significant direct effect. Mediation analysis confirms that organizational agility partially mediates these relationships. These insights underscore the strategic role of agility in translating human and behavioral competencies into adaptive managerial performance. The study highlights the importance for SMEs to cultivate agile, innovation-oriented, and competency-enriched environments to bolster resilience and competitive advantage in uncertain market conditions.