Agile Strategy: In Search of Strategic Agility

Successful companies often become victims of their own success. When their businesses mature, they believe it is impossible to change, to refresh. To return to and maintain growth, companies need to learn how to thrive in an environment of changes and disruptions.

Organizations must possess strategic agility, due to the complexity and speed of technological and social changes, and the continual shifting of sector boundaries, caused by digitization, deregulation and globalization. These are but two of many reasons. Strategists must have an integrated vision and the ability to quickly leverage the needed resources to operate in the face of significant disruptions. Today’s financial markets demand constant growth from companies, and each drop in results significantly affects a company’s market cap, potentially compromising its capacity for future investments.

The approach presented by Doz and Kosonen in the book Fast strategy: How Strategic Agility will Help You Stay Ahead of the Game was based on interviews conducted by the authors with 150 executives from leading global companies, such as Cisco, HP, IBM, Intel, Nokia and SAP. Leadership methods, tools and behaviors implemented by these companies were studied as they rekindled growth.

Fast Strategy analyzes the risks that companies face and presents what the authors’ three key dimensions of strategic agility for recovering and maintaining continuous growth: strategic sensitivity, i.e., the way an organization perceives the world and is “open-minded” and attentive enough to sense new opportunities and discontinuities; resource fluidity, which refers to whether companies can redeploy resources quickly enough to explore emerging opportunities in a complex and rapidly changing environment; and collective engagement, the commitments necessary for senior management teams to make bold decisions and work together to get things done, rather than being fractured by the tensions of decentralization and delegation of business units (or functions) versus the quest for organizational unity.

Let’s talk a little more about each of these.

Strategic sensitivity is, according to the authors, the ability to correctly analyze, perceive and reframe a challenging situation that is usually unconsciously limited by the cognitive weight of the rules of the game previously established. Additionally, the maximization of external exchange, the multiplication of experiments, and the development of a holistic approach, a broader view and intense internal dialogue are important abilities.

Collective engagement is the general mobilization of chief executives to adopt an orientation supporting the implementation of necessary investments. This requires leaders as architects or negotiators, rather than as captains or barons, as is usually the case.

Finally, the fluidity of resources, which is the ability to reallocate resources quickly and sometimes radically, despite tendencies to reinvest in mature sectors, deepen relationships with the same customers and suppliers, and rely on proven skills. The architecture of the company, the systems and the governance model are key elements.

Each of the companies surveyed by Doz and Kosonen is a beautiful case, with its own stories of internal changes leading to quite heterogeneous speeds and levels of success in the pursuit of strategic agility.

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