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Big goals and small steps – the union of strategy and Agile

Digital technology, once viewed by many as distinct and insignificant, now permeates every industrial sector. A handful of companies dominate the global tech economy. Facebook, Amazon, Microsoft, Google and Apple account for 40% of the NASDAQ 100 market cap – up from 32% in 2014. No industry is safe from disruption as these companies encroach into long-established and previously-unrelated industries.

Conventional companies are running scared, and rightfully so. The recent acquisition of Wholefoods by Amazon is a case in point.

Since it first emerged as a discipline in the 1950s, strategy has relied on hard analysis, predictions about the future made from examining historical data, and static definitions of customers, partners and competitors. In summary, it’s a methodology that isn’t well suited to change and uncertainty. But enter Agile. It emerged as a technical development methodology but is increasingly being applied to other business disciplines, including strategy.

Agile brings to mind a host of buzzwords, eg daily stand-ups, working in sprints, but what is its real value for strategists?

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‘Minimum viable strategy’

The concept of the minimum viable product, which is used in Agile to describe a ‘good enough’ version for initial launch, can be borrowed by strategy. A ‘minimum viable strategy’ allows us to launch a portfolio of strategies at a palatable cost. The strategy calls for continual monitoring of performance to test, refine, keep or scrap each of the strategies in this portfolio. Over time we’re left with a strategy that continually learns from its mistakes and is flexible enough to pivot in response to unforeseen changes to market dynamics.

Of course, changing a methodology that’s been successful for more than half a century isn’t easy and requires strategists to adopt new functional and cultural tools. Some companies, such as Mastercard, have experimented with these new ways of working by creating separate innovation labs that embed Agile into designing new products and strategies. This allows them to test the water without fully embracing the cultural shift that Agile requires. Others, such as Barclays, have embraced Agile at an organisational level.

We’ve found you can learn from the many organisations that have gained real value from Agile strategy by embracing the following core set of concepts:

  • become comfortable with going to market with a strategy that’s, initially at least, less than perfect
  • adopt a ‘digital mindset’ and make full use of technology to measure performance and listen to customers
  • refrain from crafting strategy in an ivory tower. Instead, work in multidisciplinary teams, eg operations, marketing and finance, to act on this insight at speed
  • disrupt yourself by broadening your strategic horizons in terms of size of ambition and inspiration. Think about Nissan – they’re aiming for zero traffic accidents involving its vehicles.

As industry lines blur, even conventional sectors can learn from a number of concepts. Take platform business models, such as Uber and Airbnb, where value is created by allowing two groups to seamlessly cooperate. Or servitisation, where manufacturing firms like Rolls Royce move to service-focused business models. Doing what you do but better is no longer enough to maintain competitive advantage. Strategists must have big goals – but take lots of small steps to achieve them.

Contact the authors

Contact the strategy team

Andy Katz

Andy Katz

Alan Treadgold

Alan Treadgold

Cesare Gussago

Cesare Gussago

Thomas Bjørnstad

Thomas Bjørnstad

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