Strategic agility

Alison Boleyn on the benefits of thinking ahead.

What is strategic agility?

The Age of Agile author Steve Denning describes strategic agility as “creating new markets with new products that reach new customers” and makes the point that it differs from operational agility (“making products better, cheaper and faster for existing customers”).

Is it the same thing as Agile?

Strategic agility demands that an organisation has bendy enough structures and processes to mobilise in the face of emerging opportunities and threats. Agile is part of that

– a nimble project-management approach with roots in The Agile Manifesto, posted by a group of software developers in 2001. Its 12 guiding principles include “welcoming changing requirements, even late in development”, “maximising the amount of work not done” and “a preference to the shorter timescale”.

Who has strategic agility? Who doesn’t?

Although Kodak invented the digital camera and bought the photo-sharing site Ofoto in 2001, it used both innovations to try to get customers to print photos because that was its core product. In contrast, Netflix moved beyond its core product of mail-order DVDs to entertainment streaming. Its shares immediately dropped seven per cent when it split the business in 2011 but Netflix is now valued at US$149 billion (about $216 billion). Kodak emerged from 20 months of bankruptcy in 2013.

Is “strategic agility” a gentler way of saying “move fast and break things”?

Rather, Denning says disruption occurs “agonisingly slowly”. Columbia Business School professor Rita McGrath told the Bloomberg Businessweek podcast in September that companies must listen for “weak signals at the edges of the organisation” because just as snow melts from the edges, the staff closest to customers will sense shifts before a boardroom ever can. She points out it took more than four years for the Wright Brothers’ first flight to get decent press. “What feels like an overnight inflection point has been bubbling up for a long time.”

The book

In Seeing Around Corners: How to Spot Inflection Points in Business Before They Happen (Houghton Mifflin Harcourt, 2019), Rita McGrath writes how small, empowered teams can make experimental, reversible and insightful decisions.

The infographic

In ING’s Agile Transformation (McKinsey Quarterly, 2017), two executives lay out how the Dutch bank divided head office into 350 nine-person, multidisciplinary “squads” in 13 “tribes”. Then COO Bart Schlatmann said, “[it’s] not just moving an organisation from A to B because once you hit B, you need to move to C. And when you arrive at C, you probably have to start thinking about D.”

The paper

The Curse of Agility: The Nokia Corporation and the Loss of Market Dominance in Mobile Phones, 2003–2013 (Business History, June 2019) is a tale of strategic agility gone wrong. Finnish researchers concluded Apple and Samsung thrashed Nokia partly because of its adherence to a philosophy “allowing multiple incompatible technology platforms and development projects to compete for resources”.

The article

The Reinvention of NASA (Harvard Business Review, 2018) tells a starrier story. Water filtration systems and satellitebased search and rescue have been developed since the space agency’s move “from being a hierarchical, closed system that develops technologies internally to an open-network organisation” with “a multitude of champions scattered around the company who push forward initiatives that slowly create change”.