MAKING STRATEGY AGILE

The concept of agile strategy and who it is for

Strategic agility means both being able rapidly to adapt existing ways of thinking and move faster than the competition, without disrupting operations. That implies formulating strategy in an agile way, developing an agile operating model and running processes with agile teams.

Whilst specific practices and may differ, each of these requirements implies a methodology based on a few fundamental principles:

We have named the basic approach behind agile strategy formulation ‘directional strategy’; the approach behind an agile operating model ‘leading through intent’; and the approach behind agile teams ‘agile practices’.

Graphic of the Agile Strategy framework

The value of each of these approaches differs according to context.  Some businesses are still quite stable and require only a light touch on the tiller.  Others are having their traditional business models overthrown by disruptors and are having to re-invent themselves.  Many are in between.

We do not believe in ‘one-size-fits-all’ solutions.  We do believe that the number of businesses needing a directional strategy, an operating model based on leading through intent and processes using agile practices is increasing.  But not all businesses need them all, and a few businesses do not need any.  The variables are the familiarity of the uncertainties they are facing and the nature of the ways of working they require.

Four box matrix illustrating the strategic, operational and team approaches required in different situations

The important variable in the environment is how predictable it is.  This is largely driven by its familiarity.  Many businesses routinely deal with uncertainties which would defeat others because they are familiar, and the organisation has learned over time to create processes and techniques to deal with them.  Pharmaceutical companies routinely make big bets over which drugs to move into Phase III development; oil companies can make fairly good decisions over drilling exploration wells.  Neither could do what the other does.

However, if the environment contains uncertainties that are unfamiliar, past experience is a poor guide to the future and making predictions becomes dangerous.

The important variable in the ways of working is whether they should be optimised for a steady state or adaptive.  The ability to adapt has a cost.  In some cases, it is better to standardise and hone efficiency introducing incremental improvements.  Many – though not all – manufacturing and logistics processes are like this.  In others, adaptation to continually changing circumstances is a necessity.  Many innovation processes are like this.

This website offers a menu of approaches. Each business should choose the most appropriate options.

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