Summary: "Six Principles to Build Your Company's Strategic Agility"
Thriving and not just surviving disruption can be attributed to strategic agility. In this Harvard Business Review article, authors Michael Wade, Amit Joshi, and Elizabeth A. Teracino explore the results of their research studying qualitative and quantitative data from hundreds of organizations, which led them to conclude that strategic agility can be divided into six principles:
Principle 1: Prioritize speed over perfection
Opportunities appear quickly during a crisis, thus organizations that are able to move quickly, even at expense of quality and predictability, have greater change to weather disruptions.
Principle 2: Prioritize flexibility over planning
Strategic plans typically are mapped over long periods, about three to five years, after which the planning cycle restarts. When a crisis or major disruption hits, the strategic plan may become an anchor that prevents the organization from moving forward. To absorb shocks in the plan if unavoidable, the next best thing is to minimize the damage through empowerment and diversification.
Principle 3: Prioritize diversification and “efficient slack” over-optimization
Many organizations struggle because of a “single devastating blow…due to lack of diversification or an overemphasis on efficiency and optimization.” The effect of the COVID-19 pandemic demonstrated companies’ vulnerability such as restaurants’ overdependence on fixed location and dine-in options only.
Principle 4: Prioritize empowerment over hierarchy
Empowered, de-centralized teams are inherently stronger since a single devastating blow can’t take them out. Allowing teams to manage their localized challenges can result in decision-making that is most appropriate for their circumstances. For example, during the COVID-19 pandemic, social distancing regulations had wide variations by location. Letting local leaders determine what appropriate responses to take ensured best-fit solutions.
Principle 5: Prioritize learning over blaming
An organizational culture that rewards risk-taking despite a higher possibility of failure can move forward faster. Especially during a crisis, the inability to take risks can be detrimental. Incentivizing employees for learning and adaptability fosters a greater tolerance for failure which is foundational for making necessary bold moves.
Principle 6: Prioritize resource modularity and mobility over resource lock-in
Planning the allocation of resources is difficult, especially when one can’t predict a future crisis. It is important to develop resources that are mobile/modular so they may be moved as needed.
Organizations that can apply the “triple A’s” of strategic agility will be able to adjust and adapt through crisis:
1) Be nimble enough to avoid worst impact
2) Be robust enough to absorb a lot of damage
3) Be resilient enough to accelerate forward faster
Read more about the six principles to building strategic agility.