Strategic Agility Introduction

Strategic Agility
The Ultimate Competitive
Advantage

Bob Becker

http://www.pd-advantage.com/strategicagility.html (240) 252-8975

About Bob Becker
Bob Becker is currently the Vice President of Engineering
and Quality at DRS Signal Solutions. He developed his
insights about Strategic Agility from 25 years of industry
work in a variety high change, high tech, high velocity
business environments. As the Founder of the Product
Development Advantage Group he leveraged those
insights combined with proven methodologies to help
clients improve their product development capability and
strategic agility.

Advantage Group ◊ 24 Main Street, Westford, MA 01886 ◊ (240) 252-8975
© Copyright 2008 Product Development Advantage Group, LLC. All rights reserved. 2

Why is Strategic Agility Needed?
 The 21st century business world is different:
 Allbut the most closely held Information easily
available to anyone, anytime
 Capabilities change overnight thru alliances
 Talent is located around the world
 Rate of market and technology change continues to
accelerate
 Paradigm shifting inflection points in many industries

Competitive advantages
are now temporary

 Traditional management systems reinforce the status quo:
 Waste enormous, valuable energy
 generate and assess too much, inconsequential information
 Drive the business thru annual planning and goal setting
 slower cadence than relevant market and technology changes
 Feature command and control decision making
 slow to implement change and often removed from the customer
 “Systems” build behavioral inertia
 changing directions is too hard

Today companies die by doing
what used to be the right thing
too long


If competitive advantages are now temporary…
…you need to identify and extract benefit from
the temporary competitive advantages that
present themselves.

If companies die by doing what used to be the
right thing too long…
…you succeed over an extended period by
achieving a short business renewal cycle.


Strategic Agility

The ability to sense and take
advantage of opportunities by
planning and executing far-
reaching business changes
swiftly and effectively as needed.


Transformational Change
Congruence

Execution Capacity
Systems Pr
es oc
ctur ie s C ap es
se
c abil
tru ten ities s
S
m pe
Co Strategies
Changes Increase as
you Move out from Core
Identity

Maintaining Alignment of
Each Layer (Congruence)
is Essential for Successful
Change (both magnitude
and time to move from core)


Climbing the Strategic Agility
Pyramid
Capability of
Sustained Improved
Business Strategic
Advantage Agility

Extract Achieve
To Create
Temporary Shortest
Competitive
Competitive Business
Benefits
Advantages Renewal Cycle
Form
Defining
Internal
Attributes
Develop a
Continuous
Steering
Competence

Combined with
Infrastructures
for Agility

Foundational
Elements
of Strategic
Agility


Foundational Elements
 These are the fundamental, enabling behaviors
and capabilities required to build a strategically
agile business.
 The cornerstone capabilities of system thinking
and proactive, team oriented leadership can
form the basis to develop the other foundational
elements if starting out.

Application Internal Norms of External Proactive
Norms of
of Systems Strategic Continuous Threat & & Team
Information
Thinking Capability Organizational Opportunity Oriented
Transparency
to Change Awareness Learning Sensing Leadership


Application of Systems Thinking
to Change
 Systems are defined by the
interactions of their
components, not just the
components themselves.
 System Thinking is
the discipline for “seeing wholes”
 Seeing processes of change rather than snapshots
 Businesses are systems (and have many)
 It is the interaction of the parts (people/organization, work to be
performed, processes) that produces value for customers.
 In human systems, the structure of the system includes how
people make decisions – the operating policies for translating
perceptions, goals, rules and norms into actions.

Without an Application of
Systems Thinking to Change

 You address symptoms that have little business
leverage instead of root causes.
 Change initiatives typically fail to get desired
results.
 You keep adding checks and balances which
build into an ineffective bureaucracy.

Norms of
Information
Transparency


Internal Strategic Capability
Sensing
 Dispassionate view of how an organization’s core and
context activities change over time.
 Core activities:
 Improve shareholder value
 Goal is to differentiate as much as possible
 Context:
 Everything that’s not core
 Execute them as effectively and efficiently as possible
 Differentiating on context is a huge waste of resources
 What’s core/context now? How about in 2 or 3 years?


Without an Internal Strategic
Capability Awareness

 You build up investments in capabilities that
offer little value-add.
 You under-invest in value-add capabilities
eventually forcing you to try to catch up.
 Your cost profile is not competitive against more
agile rivals.
Norms of
Information
Transparency


Norms of Continuous
Organizational Learning
 Learning is supported by habits of
extracting knowledge as a regular part of
doing business.
 Mental models are exposed and can be
changed.
 Litmus test: Is learning supported by the
culture or forced process compliance?


Without Norms of Continuous
Organizational Learning

 You repeat mistakes, creating frustration.
 You only have a few, overcommitted “go-to
guys” who can solve the tough problems.
 You take large hits trying to replace institutional
knowledge that leaves for other opportunities.

Norms of
Information
Transparency


Norms of Information
Transparency

 Open, honest information
naturally flows up, down and
sideways.
 People at the “top” deliver information as a
habit, not “as required”.
 “Relevance” is in the eyes of the beholder
 Messengers don’t get shot
 Systems support providing the same, timely
information available to all involved.


Without Norms of Information
Transparency

 Lack of top-down information flow causes dis-
engagement, lack of urgency and slows change.
 Lack of bottom-up flow forces management
decisions without key, timely information.
 Lack of information flow between groups causes
key activities to take much too long.

Norms of
Information
Transparency


External Threat and Opportunity
Sensing
 Continuous external awareness and
internalization of upcoming market and
technology shifts that could impact the business.
 Internalize? Eliminate the delay in going from “that
can’t be true” to “face the world as it is”
 Being late to “sense” (or
“in denial”) puts renewal
on hold.


Without External Threat and
Opportunity Sensing

 Market insights are late which limits both top and
bottom line growth opportunities.
 Late recognition of threats cause disruptive plan
shifts and large remediation initiatives.
 Unseen opportunities turn into expensive
turnarounds over time.

Norms of
Information
Transparency


Proactive and Team Oriented Top
Leadership
 Top executive leadership that:
 Is biased to make a future rather than react to the
past
 Promotes team behaviors and shared leadership
in fulfilling the business purpose
 Key leadership challenges in moving toward
increased agility:
 Must overcome denial, nostalgia, and arrogance
 Look beyond ideologies of ‘operational excellence’
and ‘flawless execution’


Without Proactive and Team
Oriented Leadership
 Near term focus causes strategic turns to be
missed.
 Command and control at the very top slows
adoption of decisions and limits growth potential.
 Lack of a team approach at the top level creates
silos which limits the potential advantages of
synergy.

Norms of
Information
Transparency


Strategic Agility Pyramid
Improved
Strategic
Agility

Extract Achieve
Temporary Shortest

Combined with
Infrastructures
for Agility
Foundational Application Internal Norms of External Proactive
Norms of
Elements of Systems Strategic Continuous Threat & & Team
Information
of Strategic Thinking Capability Organizational Opportunity Oriented Top
Transparency
Agility to Change Awareness Learning Sensing Leadership


Infrastructures for Agility
 Human resource processes and systems to efficiently
and effectively:
 Acquire, manage, develop and reward talent
 Create new structures
 Reorient people to perform different work
 Business information systems for communications and
decision making:
 Financial and other business goals, indicators and results
 Includes for whom, by whom, what, how and how often
 Business processes and authorities for determining and
making timely resource adjustments
Management Engaging An Empowering Extending
Efficient
Focus on Value Talent & Change Business View
Resource
Generating Management Enabling with Rolling
Reallocation
Activities Practices Organization Outlooks


Management Focus on Value
Generating Activities
 Resource usage is dissociated from resource
ownership
 De-emphasize functional silo power
 Systems, measurements and
key objectives stress cross-
functional view of activities that
produce value
 Activity-based
accounting
 Team goals/rewards


Without a Management Focus on
Value Generating Activities

 Silo’d behaviors develop which emphasize
functional success over the business.
 Investments are made and initiatives are
completed with little bottom line impact.
 The ‘sum of the parts’ is greater than ‘the whole’.

Efficient
Resource
Reallocation


Engaging Talent Management
Practices
 Hire based on talent and an ability and willingness to
operate in a high change environment.
 Talent: “A recurring pattern of thought, feeling, or behavior
that can be productively applied.”
 Motivate people by focusing on strengths, not on
weaknesses.
 Develop people by finding the right fit, not the next ladder
rung.
 Use reward systems that support a changing environment.

A litmus test: Is the focus of hiring and pay…
 the job standard (level and description)?
 or the person (the talents and evolving skills and knowledge)?


Without Engaging Talent
Management Practices

 You expend a lot of energy trying to turn people
into people they are not.
 Your new hires may fit yesterday’s needs like a
glove but cannot evolve to meet tomorrow’s.
 Many employees are not fully engaged which
impacts customer satisfaction and ultimately the
bottom line.

Efficient
Resource
Reallocation


An Empowering and Change
Enabling Organization
 Never satisfied with how things are.
 Encourage, but manage, risk taking.
 Organizational design should encourage
resource fluidity.
 Dynamic Work Assignments
 Dynamic Work Relationships
 Virtual Work Capability
 Focus on multidisciplinary teams for key activities

 Decentralize the authority to act.
 Shared leadership

Without an Empowering and
Change Enabling Organization
 Management forms the first line of resistance to
change - which may never be overcome.
 Most of your key projects fall short of goals with
a primary reason being an inability to staff.
 You have few risk takers as employees defer to
those higher up who don’t have all of the detail.

Efficient
Resource
Reallocation


Extending Business View with
Rolling Outlooks
 Having a substantive plan update only once a year is
hazardous in a rapidly changing business environment.
 Fundamental to successful agility is continuous business
monitoring beyond the limits of an annual plan.
 Typically this is a quarterly update where a 4-8 quarter
outlook is pushed out one more quarter each quarter.
5 Quarter Rolling Outlook:
Year X Year X+1
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
1st Review
2nd Review
3rd Review
4th Review

Forecast Actual


Without Extended your Business
View with Rolling Outlooks

 You lose visibility into future business
performance as the fiscal year proceeds.
 You train your organization to sub-optimize the
future for the visible present.
 Preventable surprises around the corner cause
sudden priority shifts.

Efficient
Resource
Reallocation


Efficient Resource Reallocation

 Business choices impacting resource allocations can
be made when needed during the year.
 Supporting processes and tools are in place to allow
for an efficient understanding of resource deployments
and the impacts from reprioritizing resources.
 Decision makers can be engaged to shift resources in
a low overhead fashion as needed to more compelling
business opportunities.
 Leadership is willing to cancel or delay existing
projects and initiatives to fully staff a compelling
opportunity.


Without Efficient Resource
Reallocation

 You may see an opportunity but are unable to
free up resources to pursue it.
 Faster competitors often beat you to market
since you can only reprioritize annually.
 You may over-commit resources by attempting
to just fit new commitments into an existing plan
resulting in time-to-market and quality issues.

Efficient
Resource
Reallocation


Improved
Strategic
Agility

Extract Achieve
Temporary Shortest

Develop a
Continuous
Steering
Competence
Combined with Efficient
Infrastructures Resource
for Agility Reallocation

Norms of
Information
Transparency


Develop a Continuous
Steering Competence

 Continuous steering is not continuous change!
 Hands on the wheel – always scanning forward
 There are likely plenty of “straight-aways”, turn when
it makes sense

Form Manage the
Generate Be Proficient at
External Hierarchy from
Strategic Orchestrating
Partnerships Vision to
Alternatives Change
As Needed Objectives


Form External Relationships as
Needed
 The best organizations are effective at
supplementing their internal capability
with mutually beneficial relationships
Transaction Alliance Purchase

Non-equity Equity Joint
Contract Merger Acquisition
Alliance Alliance Venture

Risk and Control Asymmetric Shared Total (by owner)

Duration Short term Medium to long term Permanent

Entity Formation No new legal entity formed New entity Legal status changed


Without the ability to Form
External Partnerships as Needed

 You must create all your own innovation which
gates your ability to consistently win in the
market.
 Without ‘as needed’ flexibility to expand your
competence and/or capacity you can’t leverage
new opportunities for which you lack resources.

Form Manage the
Alternatives Change


Manage the Hierarchy from
Vision to Objectives
 The Hierarchy of Intentions ranges from long term
aspirational goals to tactical operating objectives.
 The best systems are:
 Organizational alignment mechanisms Rate of Change

 Low overhead
Rarely
Aspirational
Shared Vision As Needed
(Typically
Strategic Goal
1-3 Years)

Focusing Theme Duration of
Balanced Focusing
Scorecard Theme
4-6 Focusing
Theme Objectives
(Typically
2-6 Quarters)

4-10 Operating Objectives
(leverage organization’s Key Performance Indicators (KPI)) As Appropriate
(Typically
Time/Organization/Individual Appropriate 1-6 Quarters)
Cascading of Objectives


Without the ability to Manage the
Hierarchy from Vision to Objectives

 You lack the integrity that extends from your
vision to your workforce – a key aligning tool to
excel at rapid change.
 Often, too many things are important, so
nothing is important.
 Objectives cannot be used to guide priorities.

Form Manage the
Alternatives Change


Generate Strategic Alternatives
 Life on earth teaches us that variety matters!

 Even great strategies decay
 Scenario planning
 Don’t try to predict the future
 Picture and create a wide range of
possible success paths
 Commit to a “set” of preferred futures
 Counteract the forces that favor investment in
“what is” at the expense of “what could be”
 Distinguish between risk and newness

Without the ability to Generate
Strategic Alternatives

 Incremental thinking typically fills the void of
strategic alternatives leading to incremental
results at best.
 When the breadth of strategic alternatives is
much narrower than the breadth of change in
your environment you will likely become a victim
of that environment.
Form Manage the
Alternatives Change


Be Proficient at Orchestrating
Change
 Capability to efficiently and effectively plan and
carry out strategic and organizational initiatives.
 Effectivecoordination of communications, actions,
decisions and events to implement change
 Must learn how to disrupt strong inertial forces
that inevitably favor status quo.
 Develop norms, systems, and processes that
counter inertia.
 Inclusive organizational involvement a key.


Without the Proficiency to
Orchestrate Change

 Status quo wins in all but the simplest
change initiatives.
 Disruptive, radical surgery is needed in
situations that have become intractable.
 Turnarounds rarely result in new market
leaders.
Form Manage the
Alternatives Change


Improved
Strategic
Agility

To Create Extract Achieve
Competitive Temporary Shortest
Benefits
Form
Defining
Internal
Attributes
Develop a Form Manage the
Continuous Generate Be Proficient at
Steering Strategic Orchestrating
Relationships Vision to
Competence Alternatives Change


Norms of
Information
Transparency


Defining Internal Attributes
Alter Effective
Underlying Innovate Renewal
Behavior Productively Without
Patterns Serious Trauma

 Underlying organizational behaviors can be changed by
moving from being reactive to responsive to generative.
 Increase the likelihood of developing and capitalizing on
product, process, or business model innovations by:
 having a view of potential futures
 nurturing the right talent
 maintaining values that support innovation
 leveraging partners when it makes sense
 When change is “normal”:
 organizational effectiveness remains high during shifts
 the “wake” from changes is not traumatic as in organizations
whose “operating system” reinforces the status quo

Create Competitive Benefits

Extract
Achieve Shortest
Temporary
Business
Competitive
Renewal Cycle
Advantages

 Maximize the likelihood of sustained success in
a turbulent environment.
 Business success over time is created by
stringing together temporary competitive
advantages.
 A business can do that when it has the ability to
renew itself more quickly than it’s competitors.


Capability of
Sustained Improved
Business Strategic Allows a
Advantage Agility Business to:

Extract
To Create Achieve Shortest
Temporary
Competitive Business By Leveraging
Competitive
Benefits Renewal Cycle a Capability to:
Advantages
Form Alter Effective
Defining Underlying Innovate Renewal Enabled by
Internal Behavior Productively Without an Ability to:
Attributes Patterns Serious Trauma
Develop a Form Manage the
Continuous Generate Be Proficient at
Steering Strategic Orchestrating Set up
Relationships Vision to
Competence Alternatives Change by:

Focus on Value Talent & Change Business View Built
Generating Management Enabling with Rolling upon:

Norms of
Information
Transparency


Top 10 Strategic Agility Killers

 Too many priorities
 Inadequate information flow
 Central command and control
 Denial, nostalgia, and arrogance
 Poor talent management practices
 Lack of a systems thinking approach
 The ‘power’ sits within functional silos
 Running the firm on an annual cadence
 Inability to reprioritize resources when needed
 Extensive job description/competencies ‘complex’


Strategic Agility – The Ultimate
Competitive Advantage
 Battlefield commander mantra: “get inside
the enemy’s decision cycle”.
 By retrieving, interpreting and acting on
battlefield intelligence faster than an adversary
you can perpetually be on the offensive

 Businesses with the strategic agility to get
inside the competition’s “renewal cycle”
have a sustainable advantage!

Strategic Agility Introduction

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Viewers also liked

Viewers also liked (14)

Similar to Strategic Agility Introduction

Similar to Strategic Agility Introduction (20)

Recently uploaded

Recently uploaded (20)

Strategic Agility Introduction