Strategic Agility – why now ?
"Five to ten years ago you would set your vision and strategy and then start following it. That does not work anymore. Now you have to be alert every day, week and month to renew your strategy". Pekka-Ala Pietilä, (President of Nokia in the early 2000s), Financial Times, 4 December 2006.
Companies have traditionally responded to change through strategic planning and the foresight offered by scenarios, or through corporate ventures and an entrepreneurial drive. Today's change is both fast –where ventures can provide an answer- but also complex (in the sense that it results from multiple hard to forecast systemic interactions). Strategic planning no longer fits because change is fast and unpredictable. Aerospace, defense, healthcare, pharmaceuticals, energy, retailing, advertising, financial services… the list of industries engulfed by fast complex strategic change grows longer every day… so does the need for strategic agility.
Further, Globalization has opened a new dimension to Strategic Agility: the geographic dimension. In the open world economy that has emerged from trade and investment liberalization, companies compete for access to global resources. Global companies are tapping the world for pockets of knowledge and know how enabling their innovations. Rather than resource arbitrage, the global competition game now is knowledge integration. Who does it faster wins new opportunities and industries, who lags fails.
Countries are also caught in a global competition game: comparative advantage is no longer dependent on “God-given” resource endowment-except for a few minerals and agriculture based economies- but on purposefully built knowledge advantage. Countries are pitched against one another in promoting economic growth and attracting foreign investments. Government effectiveness in deploying resources strategically is a source of advantage. Small “strategic” states, such as Singapore, Taiwan, or Denmark, have led the way, others follow. So their own strategic agility becomes an increasing concern for governments too.
What is Strategic Agility ?
The ability to continuously adjust and adapt strategic direction in core business, as a function of strategic ambitions and changing circumstances, and create not just new product and services, but also new business models and innovative ways to create value for a company.
Strategic Agility: the Key enabling Capabilities
1. Strategic Sensitivity : both the sharpness of perception and the intensity of awareness and attention,
2. Resource Fluidity : the internal capability to reconfigure business systems and redeploy resources rapidly,
3. Collective Commitment : the ability of the top team to make bold decisions –fast, without being bogged in “win-lose” politics at the top.
|Yves DOZ, Solvay Chaired Professor of Technological Innovation, INSEAD|