Friday, April 4, 2014

Strategic Agility

Strategic agility means that strategy planning becomes a "living process."

We do live in a digital dynamic, and businesses are just about to realize that this is not temporary, it's a deep social, economical, political and ecological shift that they are going through. It's going to last, and it's going to intensify. In such circumstances, how are you making your strategic plans 'agile'- more responsive to change?

The first is to build business system agility, it is to establish and employ a comprehensive organizational learning system that looks broadly and deeply at the environment today and in the future. This reveals opportunities, risks, problems, and solutions. Strategic agility is the ability of an organization to sense opportunity or threat, prioritize its potential responses, and act efficiently and effectively. Since the digital context is changing all the time, organizations need to change the way they think of a business strategy. Old methods work, but there is way too time-consuming and too expensive to fit into the new economy. It takes a combination of a) recognizing and challenging the role of mental models in the assumptions about the future and b) having the means to reallocate priorities and resources nimbly when a change occurs. Without that, strategic plans can actually be an impediment - and certainly become unsustainable.

The second is to build strategic ‘muscle’ across the organization from top-down and bottom-up. But in particular, the top management’s ‘think fast and think slow’ decision-making skills, the senior executives’ capability to balance of long-term business prosperity and short term win; the standardization and innovation; as well as the management practice and governance principles; in middle ranks, encourage and enforce managers' strategic thinking, focusing on critical, creative and systems thinking skills. These three skill sets enable understanding and solving complex problems employing innovative solutions. But agility, nimbleness, and responsiveness are particularly needed at the front-lines. To be able to move deliberately and swiftly, the front-lines must know where they stand and where the others are going. It involves the managers in the operations in setting the strategies and the self-managed teams in organizing their networks to get the job done. Thus, they can judge whether they should take tactical initiatives or whether they shall refer to others for decisions or actions. In the latter case, the self-managed teams can provide sufficient knowledge to the parties they get involved.

The third is to move from the rigidity of established processes such as balanced scoreboard toward more general methodologiesFor example, a design approach will enable adaptations to emerge with the prospect of exponential gain, whereas rigid processes limit the organization to incremental growth and an inability to adapt to problems that are outside the ability of the process to solve or manage. The rigid plans, the excessive distance between the hierarchical levels, and a bloated bureaucracy are just three highlights among the dysfunctions of traditional organizations. It takes strategic agility to transform a traditional organization into an innovative enterprise (1) to review and to reframe the core of the management-system (2) to apply methods including the collaborative mode of management. 3) to take principal management-practices.

Strategic agility means that strategy planning becomes a "living process" with regular evaluation, scanning, listening, revisiting and potential course correction. The forward-looking companies realize that the traditional management is marred by inherent strategic and organizational constraints, and they are looking for alternatives, therefore, an agile strategy is on the way.


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