VP & People Lead, Asia, S&P Global, driving innovation and growth through people-first approach.
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It’s been said that “the pace of change has never been this fast, yet it will never be this slow again.” Successful organizations will have to learn to thrive in the turbulent, uncertain, novel and ambiguous (TUNA) times by having strategic agility as part of their DNA. Strategic agility is the ability to move fast to align to changing market conditions and implement new strategies quickly and decisively. Research points out that, strategically, “agile organizations have 16 percent long-term EBITDA growth compared with six percent for non-agile organizations.”
The statistics might be compelling, but you will find that firms still struggle with strategic agility. Strategy is a fixed future vision, and yet agility requires flexibility to uncertain future. “Strategic agility evokes contradictions, such as stability-flexibility, commitment-change, and established routines — novel approaches. These competing demands pose challenges that require paradoxical leadership — practices seeking creative, both/and solutions that can enable fast-paced, adaptable decision making.”
Here are six key themes that could help you build momentum in a journey of strategic agility for your organization.
1. Strategy: Emphasize iterative process over one-off visioning exercises.
Strategic agility is a product of an iterative approach that requires organizations to continuously test, learn and course-correct according to the latest set of stimuli. It is a cyclic process and no longer a once-a-year strategy offsite to charter the course for the rest of the year. The process requires strong support from the top of the house with a compelling, commonly understood and jointly owned strategic agenda from the leaders. Research indicates that innovation, collaboration and value creation are the heart of strategic agile organizations that shift it from reactive to a creative mindset.
2. Culture: Emphasize a growth mindset over a fixed mindset.
Strategic agility is all about being able to adapt to uncertainty. It requires openness to learning, and a fundamental ability to experiment, fail fast and recover faster. This is the central idea of a growth mindset. Growth mindset culture believes that capabilities are not fixed for individuals and organizations but can be continuously developed. This approach creates a love for learning and a resilience that encourages great accomplishment. In a fixed mindset, the focus is too much on winning and with the change of environment, the traditional way of winning could fail. Agile organizations focus on learning over winning and inevitably they are more poised to win in uncertain times.
3. Structure: Emphasize tribes over teams.
Jeff Bezos is credited with suggesting that if you can’t feed a team with two pizzas, it’s too large. Traditional teams are hierarchical, departmental, have rigid roles and are slow to react to changed objectives. A tribe is a group of people who are passionate about each other, are cross-functional and are loosely connected for a specific outcome. Tribes are non-hierarchal, communication is efficient, trust is high and decisions are made faster than traditional teams. Spotify and ING have first used the variations of tribes, and your organization, based on industry, product or services, can dabble in your own version to empower individuals and enhance the strategic agility of teams.
4. Leadership: Emphasize servant leadership over power leadership.
Speed is of the essence when it comes to strategic agility. The servant leader’s goal is to serve the employees, align and empower them, and aid in faster decision-making. It's like a rowing team: The team that rows the best together will be the winner. The power leaders are typically non-collaborators and they are bad at empowerment, which becomes a bottleneck in quick decision-making. Servant leadership creates a culture of trust, encourages diversity of thought and multiplies the leaders at all levels to enhance empowerment. This together builds the momentum for strategic agility in the organization.
5. Governance: Emphasize RAT over HIPPO.
Risk assessment and transparency (RAT) should be the hallmark of good governance, rather than the traditional highest-paid person’s opinion (HIPPO). Good governance doesn’t try to eliminate all risks and uncertainties, a futile endeavor in today’s TUNA world, but agile firms differentiate their mitigation actions depending on the specific situation. This is possible through individual accountability and empowered leaders who can make well-considered decisions quickly and iteratively. Transparency is indispensable to make an informed choice and empower leaders at all levels to make good governance decisions.
6. Investments: Emphasize resource fluidity over resource lock-in.
The allocation of resources (space, headcounts, funds, etc.) plays an important role in a crisis and it’s difficult to effectively plan for an unpredictable future. Next-gen-enabling technology should make the resources allocation fluid and can be transferred from one business team to another as the situation evolves. Resource fluidity can be achieved through seamless integration of technology and analytics capabilities to unlock value and enable quick reactions to business and market needs. On the people side, an internal open talent marketplace could support role mobility based on required skill sets and people’s interests and capabilities.
Building strategic agility in the organization is not a tinkering job. You must make a holistic transformation in your strategy, culture, structure, leadership, governance and investments to make mindful, flexible, swift responses to a constantly changing world.
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