Applying Agile to Your Business Strategy

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Summary:

Matthew Gelbwaks writes that rather than applying a strategy to agile, you should apply the principles and values of agile to business or organizational strategy. Agile is the new way to compete and the new way to win at every level of the organization—from development to strategy.

This issue of Agile Journal is themed Agile Strategy, so you may presume it focuses on the strategy of implementing agile in your organization.  Let’s mix it up a little and look from another point of view: Rather than applying a strategy to agile, let’s apply the principles and values of agile to business or organizational strategy.

This idea was generated by Walter Kiechel’s article in the May 2011 Harvard Business Review Balanced Scorecard Report, titled “Strategy, Risk, and the Global Financial Crisis.” We have all, to a person, been affected by the global financial crisis, and so its relevance becomes immediately tractable.

In the article, Kiechel defines strategy as a set of conceptual responses to the issues facing an organization.  He relates how one of the big-five consultancies’ in-house think tank on strategy suggests that “adaptive” strategy is replacing the standard practice where headquarters dictate strategy based on the ordered triplet of “analysis, prediction, and deduction,” with

…setting “optimal conditions for the continuous emergence of superior strategies through an adaptive— or evolutionary—process.” In concrete terms, this would mean giving more responsibility for strategy to the people on the corporate “periphery,” the troops in daily contact with customers, competition, and changing market conditions. They would be encouraged to probe and experiment, even if this meant the occasional failure, with their findings being continuously fed back to the corporate center for incorporation into its strategic consciousness.

Kiechel goes on to remark that this concept of adaptive strategy would require evolution of the skills within the company (and its periphery), in particular, what the think tank italicized as “learning how to learn.”  He quips that this in itself is interesting because the parent consultancy has never been “a font of interest in the human dimensions of the discipline.” 

In reading Kiechel’s article, the parallelism between his recommendations and agile methods becomes apparent However, a truly agile strategy is a step beyond adaptive; it is dynamic and proactive.

From the construct of the strategy-focused organization, as well as the familiar tag line—executing strategy,” many strategy consultancies are beginning to investigate the agile methods as they pertain to the development and implementation of strategy. Organizations in the strategy consulting space are now differentiating themselves through their willingness and ability to embrace agility and its inherent value in strategy execution and evolution. Clients find they are moving farther, faster, and aligning more quickly to stakeholder imperatives with agile methods in place.  Without agile methods, both clients and consultancies find they are puzzled by the lack of progress and the inability to create lasting transformation.

Traditionally, the implementation process associated with strategy creation (or even strategy clarification) and its execution within an organization is a Taylor-esque[1] waterfall—a prescriptive and sequential approach to strategy definition and execution.

However, the world moves so fast that fully defined, tested, and approved annual plans become obsolete even before the teams can initiate projects to implement them.  What is worse, these annual expeditions are hobbled further by the prescriptive techniques used to develop and track the initiatives

Over recent years, we are seeing companies—be they Fortune 100 stalwarts or speculative startups—no longer having the luxuries previously afforded their predecessors.  Those who cannot make rapid adjustments to the vagaries of the business world—due to the disintegration of their previously stable financial system or to the rapid shift of the interests and buying power of their dominant demographics—simply succumb to the oppressive weight of their guiding principles and the planning and execution practices.  Though a good portion of these issues typically reside outside of IT, they are quite analogous to issues that traditionally befall Project and Product organizations.  Incredibly, though, where IT has been using agile methods to address and resolve these types of issues for a decade now, the realization that less prescription and more adaptation in the organizational strategy and execution arena has been slow to materialize. For example, as the financial crisis deepened, General Motors sought to ignore the increasing conservativeness in its base.  Executives missed many of the strategic signs that Ford saw and, ultimately, was nowhere near as quick to divest languishing brands that diluted its institutional presence (Volvo vs. Saab, Mazda vs. Saturn).

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About the author

Matt Gelbwaks's picture Matt Gelbwaks

Matt Gelbwaks currently serves as the Chief Agilist for Globant, a leading IT Outsourcing services provider based in Argentina. Prior to Globant, Matt acted as a Senior Coach at ThoughtWorks, one of the leading international consultancies specializing in Agile development as well as served as Director of Change and Product Management at Segway LLC.

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