- Saad Masood
Until quite recently corporate strategy was thought to be the exclusive domain of leaders within an organisation who would analyse and ponder for ages before establishing a strategy that would falsely be assumed to be suitable for years to come. This might have worked till 15 years ago when the rate of change, internally and externally, was not as exacerbated as it is now. Today, however, the corporate environment is so dynamic that this ancient wisdom of strategy formulation no longer holds true.
A leaf from history
Years ago, software development followed a sequential framework entitled Waterfall. The idea was that requirement gathering, analysis & design, development, testing and deployment was done serially. Although this generated some certainty but the main issue was that all value was delivered right at the end of this chain and after a considerable wait. The IT and Internet revolution across both sides of the new millennium meant that the ever-changing demands of business forced software development to move towards a newer framework, termed Agile.
Scrum methodology rose to become the most popular implementation of the Agile framework where two functions and one timeline activity played a critical part. Firstly, the Scrum Product Owner was responsible to gather and analyse requirements from the community and environment at large. Secondly, the Scrum Master was responsible to implement those requirements using this Scrum Team. Thirdly, the work was divided into a concept of multiple Sprints which would be time constrained and would deliver value at the end of one Sprint. Here, the notion was to deliver value in chunks but iteratively and throughout the life cycle of the work. Therefore, certainty was sacrificed over early realisation of value by keeping the fluid and changing nature of requirements in view.
This radical approach paid dividends to the software industry as value was delivered earlier. This is reflected in the mega success of software houses from the United States to India and China.
The question is, can a change in thinking such as that encountered in the software world help the construction of corporate strategy and bring it out of the malaise of stagnation? It can. Consider.
Extrapolation of Agile in to Corporate Strategy
The traditional framework of corporate strategy formulation envisages similar functions such as the Scrum Agile framework. However, the implementation and timelines are completely different. There is a function responsible for analysis that scans the market, grades the opposition, provides competitive intelligence, and aligns to internal stakeholders within the organisation. Then there is a function that deals with formulation and implementation of the strategy, or strategies, to fulfil the direction suggested within the results of the previous phase. The problem is that both phases are relatively static and take too long to execute and thus the organisation finds itself behind the curve and always playing catch-up with an ever fleeting and ever changing face of business and the environment.
This highly volatile and rapid velocity business environment can be labelled as VUCA, a term borrowed from the military which stands for Volatile, Uncertain, Complex, and Ambiguous. Plainly put, it means “it’s crazy out there”. VUCA forces the business leaders of today to shift towards a new paradigm of strategy formulation by extrapolating the Agile framework and the Scrum process into the organisation and upper echelons of power. Most importantly, though, the transposition of the notion of Sprints to deliver value earlier.
Firstly, shorter Sprints must be defined as opposed to the existing strategy formulation time that takes months if not years and strategy execution that takes years if not tens of years. Although in the software world Sprints can be anywhere from two to four weeks but in the realm of corporate strategy the Sprint for strategy formulation and strategy execution should be a couple of months and a couple of years respectively. Furthermore, the Sprint for strategy formulation should re-run every six months to recalibrate the ongoing Sprint for strategy execution. This is so that there is a continual feedback mechanism from the environment which will keep the strategy aligned to the overall vision of the organisation and deliver value earlier.
Secondly, the function of Scrum Product Owner, to analyse the environment and define the strategy, should be headed by only a couple of roles within the organisation. These are expected to be leaders in the organisation who are aware of the overarching vision of their own corporation as well as being in tune with the external environment and in-sync with the pulse of internal stakeholders. And nominally, they will be part of the executive team.
Thirdly, the Scrum Master will be a manager within an organisation who will be tasked for ratification and execution of one or more strategies but within the bounds of defined Sprints as mentioned previously. This is because managers are generally tasked with this endeavour anyway.
At this juncture, it is important to differentiate between the roles of a leader and manager in any organisation. Leaders generally tend to deal with policy and high level strategy formulation. Managers tend to be resources who will deal with ratifying and executing the strategy. That is why leaders are more suited to be Scrum Product Owners and managers more suitable as Scrum Masters.
The dividends of an Agile Corporate Strategy
As for software development, the biggest merit of an Agile Corporate Strategy is the early recognition of value – and that is crucial in an ever-changing business environment that generally retains its inherent property of flux. Well defined roles paralleled to the Agile framework and the Scrum methodology is another advantage which means that there is no reason to reinvent the wheel. Especially when one considers that leaders and managers both will need to be involved to make this a success. Keeping the old maxim of “too many cooks spoiling the broth”, Agile Corporate Strategy would also dictate the number of leaders and managers that are needed to formulate and execute the strategy.
The novel idea of the Sprint, a reduced timeline for strategy formulation and execution, is also a key lynchpin of this approach. Gone are the days when strategy was left trickling through years of stagnation, ambiguity, and apathy. The Agile Corporate Strategy envisages smaller phases of strategy formulation and execution which would need strict adherence for the success of this enterprise.
Remember the Greeks
When in doubt, always remember the Greeks. For this method to succeed, the extrapolation of the Agile framework into Corporate Strategy must be underpinned by the three pillars of the Greek system which defined modern democracy.
Ability to see both sides of the coin – never forget that strategy formulation and strategy execution are two sides of the same coin. Hence, it is important to give both their dues and realise their effect on each other.
A feeling for proportionality – a proportional response is needed to the analysis of the environment and competition. Therefore, careful strategy formulation with a feeling of proportionality is key so that out of scope items are not part of the execution and that the organisation should not bite off more than it can chew. Faith in rationale not dogma – lastly, competency should be developed to have faith in the approach and the notion of reasoning rather than fleeting and gimmicky slogans. The idea is to stay the course and only re-calibrate when needed.
Okakura Kakuzo, the great Japanese scholar, once said, “the art of life is a constant readjustment to our surroundings”. How true he was, the fleeting and hectic pace of life today puts this theme at the heart of the discussions about adaptability. Organisations also should be adaptable when it comes to changing environment and empowering opposition and the newly defined Agile nature of Corporate Strategy will go a long way in ensuring that happens. There are no other alternatives for success in a hectic and global world.
