The time has come for a new approach to creating and managing our strategies. Leaning on Agile principles, Business Agile is the most adaptive way for leaders to capitalize on the ever-shifting landscape of the 2020s. Here's what it means to embrace Business Agile in your organization.
Written by: James Davies, Executive Vice President of Product
“If I had to identify a theme at the outset of the new decade it would be increasing uncertainty.”
Kristina Georgieva, Managing Director of the IMF, Peterson Institute for International Economics, January 17, 2020
We entered the 2020s expecting unprecedented uncertainty.
Political and economic uncertainty in the US and EU respectively set the scene for this decade.
No sooner than the prediction was made, COVID-19 emerged, and with it came the erosion of any last certainty stubbornly remaining, and substantial disruption.
In the space of fewer than two years, we have transitioned from an era of “new normal” to a time of “no normal”.
And with this change comes a key question to corporate strategists: can your strategic planning process accommodate uncertainty or will it still rely on certainty and predictability?
In this blog, we explore the implications of uncertainty on strategic planning and the imperative for what we call here “Business Agile”; embracing uncertainty and building a key new organizational capability, responsiveness.
What does Business Agile mean?
When it comes to defining Business Agile, we’re not talking about agile portfolio or project management.
Those disciplines take their places at the table in this new world.
However, Business Agile is complementary to those disciplines.
Leaning on Agile principles, Business Agile ensures that your organization’s strategy and strategic plan can be managed in a much more agile and continuous manner.
For taking a more continuous approach, an organization can become much more responsive to change.
And, as we all know, that change has been plentiful.
A different approach is needed
Clearly, the traditional approach to annual strategic planning needs to accommodate this new reality.
It is battle-tested in a slower-moving world where assumptions were safe, risks were known and understood, and market disruption was visibly signposted allowing sufficient time to adapt.
“A traditional strategy approach will not help organizations survive in uncertain conditions, because it becomes outdated quickly, is slow to respond to changes and depends on certainty”
Make your strategy more adaptive for an uncertain environment, Cox & Skyttegaard, Gartner Research, 2 July 2020
In this prior world, planning a year’s worth of strategic activity then hunkering down for the execution of that year’s activity, was a safe bet.
Both strategy and the strategic plan remained largely untouched, assumed to be failsafe for that twelve-month period.
Naturally, management attention zeroed in on performance to plan without necessarily questioning the plan itself or its governing strategy.
I know that must sound like a sweeping generalization and harsh. But processes must evolve and adapt to remain relevant, just like markets, products, and organizations.
What changes must we make to the annual strategic planning process to guarantee its relevance in this emerging new world?
Catching the need to change course
The main challenge with annual strategic planning is that it assumes strategy will not change in that 12-month period.
To understand whether strategy needs to adapt, conscious strategic reviews are critical, forcing the discussion away from performance to the strategic plan and onto the strategy itself.
Introducing regular strategic review sessions
Making this change is relatively straightforward with the introduction of regular strategic reviews.
More challenging is gathering reliable market and competitive intelligence that might either influence the strategy or signpost broader market disruption.
Historically a researcher team might gather this information from primary and secondary research; a labor-intensive task that subsequently limited available resources for analysis, interpretation, and curation.
Nowadays, AI-enabled software can automate the delivery of (close to real-time) targeted market intelligence: from competitive analysis to changes in regulations and legislations.
That just leaves the question of what types of topics or events to monitor for strategic disruption.
What strategic disruptions should you be monitoring?
Many organizations maintain a list of strategic issues that might include strategic (planning) assumptions, risks, threats, or conversely opportunities ripe for exploitation.
The nature of these is dependent on your industry, your competitors, and those fringe players who blur the lines between your industry and theirs.
Once identified, you can begin to automate the strategic disruption scanning process, similar to how search engine marketers would for keyword fluctuations they create content for.
Market and competitive intelligence software will use search terms based on these strategic issues plus known competitors, industry publications, and more.
Responding to strategic curveballs
Getting an early distant warning of a need to change course is one thing. What follows – impact analysis and response – is another matter.
Responding might require a revised strategy and/or revised annual strategic plan; mid-stream through the planning and delivery cycle.
What is clear, is the need to change our approach so that we can effectively manage strategic curveballs.
Separating strategic planning from strategy delivery
For this reason, companies are exploring the decoupling of the planning cycle from the delivery cycle.
For example, the planning cycle might remain twelve months but the delivery of the plan might be incremental and quarterly.
In between delivery cycles, the strategy team has the opportunity both to reflect on performance in the prior cycle (a “retrospective”) as well as look ahead at the next delivery cycle.
At this point, any changes in the strategic plan can be implemented in response to internal or external change factors.
Business Agile as the ability to respond to change
We call this new capability to respond to changing conditions “Business Agile”.
It is the application of key Agile principles to strategy and strategic planning, as opposed to the delivery of the strategic plan.
Rather than replace the annual strategic planning process, these concepts equip this process with much-needed responsiveness in more uncertain times.
We’ll be discussing Business Agile in more depth in subsequent blogs.
For now, we recommend you explore strategic reviews and their role as an early distant warning system.
And think about how you might incrementally deliver the annual strategic plan and accommodate course correction.
Learn more about Business Agile and Strategy Execution Management
Take the next steps in your journey to embracing Business Agile by exploring our Strategy Execution Management resource hub or any of the below:
- Key to Strategy Execution eBook: Read how companies like Danaher and HP have mastered Strategy Execution Management and what you can learn from them.
- What Does It Mean To Be Business Agile?: Take the leap into the future of strategic planning and execution with this fascinating insight.
- How AI and Machine-Assisted Learning Will Help Strategy Execution: As Artificial Intelligence becomes a mainstay in our lives, read how AI and machine-assisted learning will evolve to support your Strategy Execution.
About the author
James Davies is i-nexus’ Executive Vice President of Product. As an experienced software executive with 20 years of experience working in Silicon Valley, USA, James has held senior leadership roles in three venture capital-backed software start-ups (including CEO, CPO, and Chairman) and has delivered management consulting services to some of the world’s largest technology companies.
If you’d like to talk more about the future of Strategy Execution, reach out to him on email@example.com or connect with James on LinkedIn for the latest Strategy Execution insights.