Strategic Agility

I have enjoyed reading the paper of my friend and colleague Jassim Al Awadhi about Strategic Agility. It is a very good paper describing the Strategic Agility in simple words.

It happened that at the same time I was reading the paper, I had just completed an interesting course with London Business School by the great professor Marcus Alexander in Strategic Agility. I do highly recommend the course to anyone interested in this subject.

I heard the term Agility for the first time back in 2014, during one of the management meetings discussing one of our department strategic projects. The term was used by one of the new joiners and honestly, I did not understand it at that time. Later, we kept hearing the term Agility and became one of the buzzwords at that period and was commonly used especially by our go-to-market teams.

In such unpredictable world with many disruptive innovations comes the importance of Strategic Agility. What does that mean? In my simple words and understanding:

Strategy: - How we plan and underline main company goals and objectives.

Agility: - How we can be dynamic, responsive and predictive to the changes coming or will come.

To further explain my point of view, will describe two main common issues I believe we face in many organizations or business:

 1.    Spending time to put a strategy for the next 5 years, yet we do not know what will happen the next 6 months!

•   This is exactly what is happening in many cases. Spending a lot of time to plan and execute without understanding the desired outcome.
•  In many scenarios, by the time you execute, the results are not satisfactory or let us say not relevant, especially with such dynamic and fast changing market in terms of customer needs/behavior vs technology trend.
•    We intend to ignore the market changes and new technology trends which has direct impact to our plan & road map.
•    Typical examples from the technology sector such as Nokia and Kodak and how they were leading the market in early 90s and how they ended up today.

 2.    “Everyone has a plan until they get punched in the face!”, Mike Tyson.

•  As many organizations, almost everyone got very bad hit in the face during COVID-19
• On the other hand, there are few organizations took big advantage and they were able to grasp the opportunity.
• Organizations with strong digital services were able to boost their sales during the lockdown period.
• Also, companies who were adapting the agile approach in their go-to-market strategies were able to overcome the challenges faced by COVID-19. A typical example is Amazon and how they have boosted their market share and revenues in 2020.

So, what is the solution? and how can we plan in such unpredictable market? There are multiple ways and approaches, and I believe it will differ from case to case depends on multiple factors but will list what I believe should be a common practice to be applied.

Strategy vs Agility: -

Its ok to outline the strategy for the next five years and its very ok to change it. We need to do the following:

• Spend more time on experiments to capture customers and end users’ feedback and behavior.
• Keep an eye on the market trends and adjust or steer the strategy as it serves your main objectives.
• Keep communicating the changes on your strategy such as why we are changing the direction? New targets? New approach? And what are the expected new outcomes?
• Keep learning from your mistakes and others mistakes too.
• On the other hand, COVID-19 crises have brought up all teams together to share one strategic objective which made many organizations able to achieve big milestones in their digital transformation in just 6 – 9 months; something that they have failed to accomplish during the last 5 years! Which is due to the fact that, they didn’t share one common objective nor strategy.

Organizational Ambidexterity: -

The most accepted definition of ambidexterity is a balance between explorations and exploitation; organizations capable of exploiting their existing competencies while simultaneously exploring new opportunities - Antonio Nieto-Rodriguez.

If we take the example of being in operations management, you will immediately notice that we are always on firefighting mode and we do not have time to explore nor innovate.

The solution to this common problem within technology and telecommunication companies is to create Digital Twin of the organization to be able to Build new scenarios for future technologies and trends which has direct impact on customer behavior, sales and operations excellence such as:

• Artificial Intelligence
• Machine Learning
• RPA (Robotics) and process automations
• Sustainable & renewable energy
• Electric cars & self-driving technology
• etc.

You may not need to know all the details of the above new technologies or how it works, but surely you need to know the impact and how it will affect you!

If we take Kodak and Fujifilm as examples and both are from the same industry, immediate big question will rise, why Fujifilm was able to survive and why didn’t Kodak?

Kodak similar to many companies who failed to transform into digital because they did not listen to their customers, in fact they were listening very carefully to small segment. So, Kodak were focusing on the established top customers and they neglect the bottom mass customers. On the other hand, the competitors were focusing on the mass market and their product were developed in a way to meet the mass requirement. The irony that Kodak were one of the first companies to develop digital cameras at early stages, but they have decided to continue the analog traditional cameras. Another similar example is Nokia, where they had developed touchscreen phones before four years of launching the first iPhone by Apple however, they kept focusing on the hardware not the software as traditional way of doing their business.

This is exactly what is called the innovator’s dilemma due to disruptive innovation. Majority of big companies are good in sensing and responding to new technologies but somehow, they fail to scale it up because they feel its too risky to their way of doing business.

Fujifilm, and unlike Kodak did not sell it is chemical business when they witness the world heading towards digital cameras, and they did capitalize on their massive chemical experience and started a drug business, even there are news that they have a potential cure for COVID-19.

Another quick example of Thomson! A Canadian company who took a bold move in mid 90s to sell all their newspapers because they realized at early stage that the newspapers will disappear, thus they invested in online news and acquire Reuters and became the famous Thomson Reuters.

We can keep talking about Strategic Agility and Disruptive Innovation and share multiple examples all day long; however, the main question will be how we will benefit from all the lessons learned to be Apple not Nokia or Fujifilm not Kodak!

References:

Strategic Agility by Jassim Al Awadhi

https://www.dhirubhai.net/pulse/strategic-agility-jassim-al-awadhi/?trackingId=vdl73r%2BNUP3AVZCyP%2FwUDw%3D%3D 

Organizational Ambidexterity by Antonio Nieto-Rodriguez https://www.london.edu/think/organisational-ambidexterity

 Fujifilm Found a Way to Innovate and Survive Digital. Why Didn't Kodak? By CHRISTOPHER SIRK

https://crm.org/articles/fujifilm-found-a-way-to-innovate-and-survive-digital-why-didnt-kodak