Strategic agility - a survey of organizational capability ... · Strategic agility – a survey of...

Strategic agility – a survey of Strategic agility a survey of organizational capability to cope with turbulent environmentswith turbulent environments

Anders [email protected]

Adocus Business Solutions

2008-04-132

OverviewOverview

BiographBiography

What is strategic agility and why is it important?What is strategic agility and why is it important?

From strategic drivers of change to strategic agility

Agility consulting services

Collaboration discussion

Adocus Business Solutions™© All rights reserved Adocus Business Solutions 2007

Further information

Biography – Anders EkmanBiography – Anders Ekman

W i k MBA (2006)Warwick MBA (2006)

Strategic alliances and business strategy Accenture (2005-2007)Strategic alliances and business strategy Accenture (2005-2007)

St t i lli d t t IBM ( )Strategic alliances and account management IBM (2003-2005)

Alliance management Rational Software (1999-2003)g ( 999 3)

M.Sc. CSE (1992), Lic.Eng. (1994)


Warwick MBA (2006)Warwick MBA (2006)


MBA Dissertation – Industry patterns of IT-enabled agilityEuropean survey on European survey on IT-enabled agility

Scientifically validated and calibrated research instrument (CFA / EFA)

Industry benchmarks

Intra-organizational analysis of agility bottlenecks


Intra-organizational analysis of agility bottlenecks

What is strategic agility?What is strategic agility?

Agility definition – Four strategic dimensions of agile competition (Goldman et al. 1995)

• Enriching the customer • Enriching the customer • Cooperating to enhance competitiveness• Organizing to master change and uncertainty• Leveraging the impact of people and information


Why is strategic agility important?Why is strategic agility important?

Organizational environments – From economies of scale and Organizational environments – From economies of scale and scope to economies of speed and synergies

Local markets merge into an increasingly ”Winner takes all” logic becomes g g ydynamic global marketplace where new

bases for competition emergeWinner takes all logic becomes

increasingly common

Organizational survival Organizational survival –Lean and fragile vs. mean and agile

Organi ations that are setup to cope ith placid and protected en ironments of the past


Organizations that are setup to cope with placid and protected environments of the past will underperform and ultimatively fail in increasingly dynamic environments

Strategic drivers of changeStrategic drivers of change

Macro-environmentGlobalization Information TechnologyGlobalization Information Technology


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GlobalizationGlobalization

Free tradeFree trade

Foreign investment

Liberalization of capital

Labor mobility

L l k t i t l b l k tLocal markets converge into a global market that knows no national borders


[McAleese 2004]

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Information TechnologyInformation Technology

• High speed fixed line andCommunication • High-speed fixed-line andmobile communication

Communication bandwidth

• Vast amounts of complex dataStorage capacity

• Massive data collection and sophisticated analysis

Computing power

Complex data can be collected, processed,


p , p ,and transferred anywhere instantly

Characterization of organizational environments

Macro-environment

Globalization Information Technology

Organizational environmentg

Dynamism Complexity Munificence


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Characterization of organizational environments

• Instability• TurbulenceDynamism

• Heterogeneity• DispersionComplexity Dispersionp y

• Capacity for growthMunificence Capacity for growthMunificence


[Dess and Beard 1984]

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DynamismDynamism

3) Disturbed

4) Turbulent field

5) Partitioned environment

2) Placid clustered

3) Disturbed reactive

1) Placid random

clustered

[M C d S l k 1984]


[McCann and Selsky 1984]

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ComplexityComplexity

Simple strategiesSimple strategiesfor a complex world


[Kurtz and Snowden 2003]

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MunificenceMunificence

Supply/demand imbalances

Cyclical demand fluctuations

Industry maturity

R l d li i l d i iRegulatory and political decisions


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HypercompetitionHypercompetition

Rapidly escalating competition based on Rapidly escalating competition based on price-quality positioning

Competition to create new know how and establish Competition to create new know-how and establish first-mover advantage

C titi t t t i d t bli h d Competition to protect or invade established product or geographic markets

Competition based on synergetic alliances


[D’Aveni 1995]

New bases for competitionNew bases for competition

Macro-environment

Globalization Information Technology

Organizational environment

gy

Organizational environment

Dynamism Complexity Munificence

New bases for competition

S d S i


Speed Synergies

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New bases for competition –economies of speed

Joseph Schumpeter (1883 1950)Joseph Schumpeter (1883-1950)

Punctuated equilibria – Creative destruction –q bdisruptive change• Dynamic capabilities

Kill li ti

kill your darlings• Continuous innovation –

first mover advantage• Killer applications first mover advantage• Instant imitation –

second-mover advantage


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New bases for competition –economies of synergies

KDemand side externalities • Kazaa• Skype • YouTube

Demand-side externalities – From the law of

diminishing return to the law of plenty

• VHS vs. BETAStandards wars • LP vs. CD

• Blue Ray vs. HD-DVD

Standards wars –The winner takes it all

• LinkedIn• Letsbuyit

Syndication –Network of loosely

connected agents or


y• Opensource

connected agents or clusters of agents

Strategic drivers of change create a need for strategic agility

Macro-environmentGlobalization Information Technology

Organizational environmentDynamism Complexity Munificence

New bases for competitionSpeed Synergies

Strategic agility

Speed Synergies


Strategic agility

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Strategic agility –l d f il d illean and fragile vs. mean and agile

Lean organizations are well-suited to predictable environments (type 1 – 3 environments) ( yp 3 )

However, disruptive change can bring lean i i d h i korganizations down on their knees

Agile organizations prosper in highly uncertain Agile organizations prosper in highly uncertain environments (type 4 and 5 environments)


Strategic agility along organizational dimensions

ManagementManagementprocesses

StructureStrategygy

[S tt M t 1990]

TechnologyIndividuals

[Scott-Morton 1990]


Technologyand roles

Agility consulting servicesAgility consulting services

Agility benchmarkingAgility benchmarking• Adocus Business Solutions™ has agility benchmarks for various

industries* – we can benchmark the strategic agility of an dust es e ca be c a t e st ateg c ag ty o a organization against its industry peers

Agility profiling• A chain is as strong as its weakest link – we can profile the strategic

agility of an organization to identify internal agility bottlenecks

ili lib iAgility calibration• We can help to improve the strategic agility of an organization by

resolving agility bottlenecks


resolving agility bottlenecks* Ekman and Angwin (2007)

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Further informationFurther information…Contact details• Anders Ekman Adocus Business Solutions• Anders Ekman, Adocus Business Solutions• Email: [email protected]• Phone: +46 70 549 99 09

Publications• Ekman and Angwin (2007) Industry patterns of agility: a study of the role of

Information Systems and Information Technology as an antecedent of t t i ilit ithi E i ti I t ti l J l f strategic agility within European organisations, International Journal of

Agile Systems & Management (IJASM)• Ekman (2006) MBA Dissertation, WBS0260309,

Warwick Business School, UK


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