Agile Strategy: Short-Cycle Strategy Development and Execution
When the rate of change inside an institution becomes slower than the rate of change outside, the end is in sight. - Jack Welch
In a world of agile everything, agile concepts are being applied in areas well beyond software development. At the NDIA Agile in Government Summit held in Washington, D.C. in June, Dr. George Duchak, the Deputy Assistant Secretary of Defense for Cyber, Command & Control, Communications & Networks, and Business Systems, spoke about the importance of agility to organizational success in a volatile, uncertain, complex, and ambiguous world. Dr. Duchak told the crowd that agile software development can't stand alone, but must be woven into the fabric of an organization and become a part of the way an organization's people, processes, systems and data interact to deliver value. The business architecture must be constructed for agility.
I first wrote about agile strategic planning in my March 2012 blog post, Toward Agile Strategic Planning. In this post, I want to expand that discussion to look closer at agile strategy, or short-cycle strategy development and execution, describe what it looks like when implemented, and examine how it supports organizational performance.
Introduction: Organizational Agility
Organizational (or business) agility is "the ability of a business to adapt rapidly and cost-efficiently in response to changes in the business environment." Agility is characterized by the combination of organizational attributes like flexibility, speed, awareness, preparedness, and adaptability. In today's rapidly changing environments, agility is starting to become recognized as a management approach, and it illuminates how innovation and strategy are linked through ideas such as fail fast and pivot, wherein lots of little experiments are conducted to see what works and what doesn't, be it a product, a design, or a decision.
As agility becomes part of an organization's relationship to its work, whether through software development or business practices, agile concepts are being explicitly applied to organizational practices. These practices include strategic planning, strategy execution, change management, and performance management. In this context, agile strategy becomes a driver for organizational agility.
Current Barriers to Strategy Development and Execution
Strategic planning has traditionally been a top-down, roughly annual exercise. It typically follows a sequence of scoping the strategic plan, gathering information, defining goals and objectives, identifying potential strategies, developing action plans, identifying measures, and then executing the work in a somewhat linear fashion.
In the current business and technology environment, which is characterized by uncertainty and complexity, traditional strategic planning has become cumbersome and ineffective. Organizations struggle to construct useful strategic plans that can be deployed throughout the organization, aligned with action plans and performance plans, executed, and monitored to produce measurable results. Leadership, management, and staff lack confidence in strategic planning exercises because results are too often uncertain.
In practice, the lack of continuous feedback loops between operational units and C-suite leaders leads to the misalignment of resources. Lack of communication makes course adjustment nearly impossible. In my work with various DoD and federal organizations, I have seen many instances in which a strategic plan is created, but does not succeed for the following reasons:
- Strategic goals are not aligned with objectives of organizational units.
- Success metrics are not clearly understood throughout the organization and do not tie directly to decision processes or tactical work.
- Communication and feedback loops are inadequate or non-existent, thereby making course adjustments ineffective or impossible.
The Power of Agility
Agile organizational practices are business focused and have short cycles that are suited to business tempo. Similarly, agile strategy should focus on strategy development and execution practices that
- reduce the time to tangible value and expected results achieved
- help the organization maintain momentum on the execution of long-range strategic plans through shorter, iterative implementation cycles, meeting both immediate and long-term needs
- enable the ability to pivot or adjust course proactively and reactively to adapt to frequent changes in both internal and external environments
As agility works its way to the very top of organizations, the shift to agile thinking brings focus to strategy execution (not just planning) right from the beginning. The obligation of agile strategy is to enable the organization to sustain strategic momentum while frequently deploying and refining strategic initiatives. In keeping with Agile software development principles, effective agile strategy processes will provide "just enough" planning to launch executable initiatives early, focusing less on exhaustive long-term planning and more on early execution in the form of action planning, measuring, and reevaluating approaches as a matter of regular business rhythms.
In my experience, however, planning is still the difference between agile organizations and organizations that are merely reactive, because agility absolutely requires some stability. In a December 2015 interview, Wouter Aghina and Aaron De Smet of McKinsey & Company, describe how agility helps an organization thrive in constantly changing environments. They emphasize the need for stability with agility. "The critical thing," says De Smet, "is to have...a few critical things that won't change, at least not very much, not very quickly, that the company can use as stable foundation and springboard." In an agile environment, strategy gets more agile, but it also provides stability.
The basic steps of an agile strategy development and execution process might resemble the following:
- Take stock. Understand what kinds or contextual information you have (current strategic plans, analyses, competitive environment scans).
- Identify a vision or rallying point. Articulate a destination or a driving force for change. This piece provides stability.
- Build a high-level roadmap. Develop a small, select set of goals that drive you toward your vision
- Continually execute.
- Develop a strategic planning and execution rhythm (on the order of monthly).
- Develop a strategic planning and execution communication plan.
- Launch and execute action plans frequently.
- Conduct measurement checks to ensure progress toward goals.
- Make adjustments.
The first three steps are the springboard from which continual execution launches. Continual execution integrates the organization's strategic intention with its organizational culture and involves the entire organization in driving quickly and nimbly toward success. In keeping with agile principles, strategy is executed by small, autonomous, cross-functional teams. It is important to note that everyone in the organization should understand their role in contributing to strategy development and execution, and all initiatives are evaluated according to transparent criteria so that data-driven decision making becomes the norm, and course correction is a non-threating tool.
We already live in a world where technology and data have been democratized. As a result, competitive advantage now comes from the ability to quickly and nimbly respond to the environment. Agile strategy, in many ways, represents the democratization of strategy. When leaders set visionary targets, employees throughout the entire organization can be empowered to find innovative ways to solve problems and contribute toward the vision. Agile strategic planning and execution methods drive organizational agility by aligning effort and resources, bringing value to activity, reducing churn, and producing strategic and operational results.
Given the rapid pace of change in the world and in technology, the concept of agility is moving from software to other projects, processes, and organizational operations. Incorporating agile principles into strategic planning and execution is a highly effective way to drive strategy development, strategy execution, data-driven decision-making, and results. Successful organizations will be those that can adjust their actions ahead of and in response to changes in internal and external environments.
The next post in this series will explore how agile strategy can be viewed as a role-based, enterprise capability and describe the importance of data in agile strategy.
I welcome your feedback on this series in the comments section below.
Read my initial post in this series, Toward Agile Strategic Planning.