Happy salutations for you today. After a week of health healing, we are once more on our way to understanding the notion of “strategic agility”. My apologies for not writing last week, I was hit by an amygdala infection (thanks God it wasn´t COVID-19), so I had to take some rest, and do nothing. I felt so weary and exhausted, that I was not able to paint either. By last Friday,  I was on my tip-toes again, but I was required to reframe our content over the weekend. Sometimes, we ought to pause, no matter what, particularly when our organism is telling us to do it. So let´s begin where we left you on hold. Thank you for your patience.

More about the notion of strategic agility. Take a look at the material of the slides that we have organized for this episode. Up to slide number 7, we simply have gathered more definitions of “strategic agility”(0), not with the purpose to confuse more, but with the simple objective to make you think about the power of waiting. Any business owner has to delay or take it slowly when flashy new “terms” with “strategic flavor” arise. It doesn´t matter if these notions come from well-grounded studious sources. Any author in strategy, particularly those who are well educated in these matters, require a protocol of several DBR (Design-based research) decades, before launching notions that are still not theories.

A sign that a “new term” is still not a well-proven theory in strategic management comes tied to a multiplicity of connotations and blurry definitions. When you see this, it is a warning notice, for any of us to simply don’t dare to use it. Simply relax, and rather, let the experts find out. Let the authors a space to test and do the DBR loops required. As consultants, restrict to offering unproven solutions to clients. Let time pass by, wait after a few years (maybe decades) preferably. Then see if that notion has become a theory in management or not. Meanwhile, we, as business owners, don´t find explicit confirmation that a “work in progress” notion has been proven in every single industry, it is regulated properly, and we can measure the results, in terms of advantages and contradictions, let´s keep a distance from every pioneering premier mover “theory” exertions. A bit of cautious reserve is better than becoming a “first mover” under premises that still require refinement and adjustment.

For example: When the notion of the competitive advantage came to light in the 80s,  as a civilization, we should have restrained ourselves from rolling it out as a renaissance theory for nations to create value. Why? Because it wasn´t a theory yet at that time. Now we are reaping the good and the bad of it, and our civilization growth is not coming forward as we expected it, but with a massive disbalance in terms of economics, transaction costs, pricing, more poverty for the poor, pollution, depletion of natural resources for our societies, and an ascendence of disruptive technologies that are also destroying our human delicate nature equilibrium. This new era of NAIQIs _{(Nanotech, artificial Intelligence, Quantum Supremacy, and the Internet)} is affecting our brains, our health, our economies, and our communities.  

The big issue for all of us who are looking for new theories to grow in our companies is that we have not been trained to pause and reflect before moving fast and forward. Many business leaders are looking for the next state-of-the-art frontier to become the “first mover”, we pursue “blue strategies” to differentiate from the competition, but we also have to bear the consequences of the negative side of being the foremost first. Sometimes these outcomes are tragedies, or they trigger horrendous environmental consequences such as climate change.

Strategic agility elements. Let´s see slide number 7. The strategic agility notion offered by Doz-Kosonen (and other additional authors) seems to come as a result of a thoughtful analysis to enhance leadership capabilities, much required to boost the firm´s ability to renew its business model. But, be aware, that these capabilities come from a rationale named “Fast Strategy: How strategic agility will help you to stay ahead of the game”. And the observations come from the study of the following companies: Intel, Cisco, SAP, NOKIA, IBM, and HP. Six tech companies that have nothing to do with other industries, governments, and economic sectors. If we don´t situate ourselves in the position to understand from where (or what context) these strategy notions come, we will roll out things that are inconceivable to implement in other industries which require slowness and delicacy, cautiousness, and gentleness unhurriedly motion under high pressure. Always remember that agility, as Eleonora Escalante Strategy has defined, doesn´t mean faster, but it has other connotations.

Doz and Kosonen have identified three meta-capabilities (1) for strategic agility :

1. Strategic Sensitivity
2. Leadership Unity
3. Resources Fluidity

We have described each of them on slides 8, 9, and 10. In addition, other authors have added two more capabilities: Resourcefulness and Measurement (4). Please read the material on slides 11 and 12, for further explanation (3).

Strategic agility challenges. Since the notion of strategic agility is a paradox, or it is a contradiction itself, there is a list of challenges that have arisen when organizations take action towards implementing it. The tension between sensitivity, leadership unity, and resource fluidity is a standard situation to occur. These challenges have been identified by several researchers, and have been organized into 6 categories: Challenges of organizational culture, reallocation within the organization, midset shift, change resistance, short-term focus, and measurement of agility. I encourage you to read the bibliography that explains them in detail (4).

Refreshing the concept of the Value Chain. A value chain is a tool that has been taught at Business Schools since the entrance of Michael Porter to our most used frameworks in business administration. What Professor Porter did, was simplify a scheme, in such a way that we can segment a sequential chain of activities when we are dealing with offering value in products or services to our customers. These activities are common in many industries. These activities are classified into two main groups: primary activities and support activities. The supply value chain is related to this general concept of the value chain. So, now what is the difference between the value chain and the supply chain? If there is any? Or are we on the same page?

Let´s go to the theoretical roots of it.

What is a supplier: It is a company or an individual that supplies raw materials, products, and services to others, who might use them to produce something or, who can resell them at a higher price. This supply may happen either at the wholesale or the retail side or at the re-selling (an end-customer can become a supplier later on to another end-customer).

What is supply chain management (SCM)?  The most popular definition of SCM is so simple that you may find it, even ridiculous. But let´s read it, so you will begin to understand what is happening. Even in ridiculous ideas, you can find wisdom: “Supply chain management is the management of the flow of goods. It includes procurement (purchasing), the movement or logistics of those goods, storage or warehousing, work-in process-inventory, and finished goods from point of origin to point of consumption”.

If you ask any SCM specialist, SCM in reality, not on paper, is interconnected to the following list of all the things they do as suppliers of goods. Let me record it as follows:

Why is agility mentioned in supply chain management (SCM)? Because agility has been linked to applying any procedure, technique, activities, and technologies (the NAIQIs) to improve the core operations (activities, functional areas) in supply chain management (SCM); then to pursue agility is the core of SCM. The application of any improvement at SCM can make a difference to compete and get more clients. So operational agility to save money, to become faster, more flexible, and more able to adapt, is what happens in reality. In the process, humans have been replaced by these technologies, in less than a generation. Why? because when the value chain is fully executed by machines, then agility enables cheaper products (human slowness is removed). The result: the queen of the party is “the agility” motivation.

Time is money, and agility helps us to be cheaper. Because agility has been connected to the notions of fast-flexibility, which matches cost reduction led by the quest for hyper-efficiency, agility is a consequence of the application of the NAIQIs to SCM. The majority of enterprises that depend on SCM to thrive, particularly those e-retailers or mega-importers of goods from China, have been testing and rolling the world of artificial intelligence. Those corporations, for example, Amazon, have embraced and pursued “operational agility”. In Asia, supply chain management has been deployed fully, and the pioneers, in their quest for hyper-efficiency,  have already seen the result of machines in place with their artificial intelligence software, with algorithms beyond their operational aspects. And, look at what is happening: those machines and algorithms are taken into account now to make decisions at the corporate level.

Read please: the great confusion is happening because operational agility goes up to the corporate level of the enterprises, where a human makes decisions. Strategic agility as we have defined it in our presentation above is not what represents being agile when we land into SCM. Nevertheless, everyone at the operational level uses the term agility (producing faster and cheaper) in such a way that is conceived as strategic agility.

The strategic agility that we are exploring in this saga is beyond the SCM. I was checking a presentation of one of our professors at London Business School (5). This was under the context of the Worldwide LBS Alumni celebration 2018.  Birkinshaw was explaining the threats and the opportunities of the world of automation and artificial intelligence, and the challenges to corporate strategy leaders. As usual, Birkinshaw is always honest about the pros and cons of any situation. But, an immense fear came into my mind. I was scared to death to notice what is the meaning of using artificial intelligence without any type of logic. One side of the coin might be positive, as Birkinshaw has tried to explain. But the other side of the coin of disruptive technologies triggers a horror of a fiction movie that is not a fantasy of what will happen, but it is occurring now in the year 2022, only 4 years later after Birkinshaw´s presentation.

The worst is that meanwhile, I am writing this article, business owners continue using erroneously the quest for operational agility as if it is strategic agility. What horrifies me, is the strategic agility confusion between the operations and decision-making, not just in corporations but at the individual level, in our households. In terms of SCM, we are already using the NAIQIs in our operations, and the “Internet of Things” in our personal lives (for example Alexa), so all our “agility quest” is in the hands of machines and algorithms, or artificial intelligence. Machines are and will control human lives in frightening ways, and we have seen it, evidently during the last two pandemic years.

Is strategic agility a notion that might be utilized to solve the issues of the water cycle in corporate strategy? Today, we also reply to this question with another one. We wonder if for a minute the notion of strategic agility has included the water cycle protection when our strategy authors write a book about fast and forward strategy, that may impact the world forever? If not, then it is better to pause. All strategy management authors require to pause, review their contents and find out if, in reality, they respond to protect our environment from pollution, depletion, and irrational cost-efficient new theories with disruptive technologies.

Let´s see how we will address this last question in our next episodes. At the end of this saga, we envision giving you our final verdict. Stay tuned.

Our next subject: Strategic agility is not NAIQIs.

Strategic Music Section:

Why did we choose Francesca Dego? Francesca Dego belongs to the new generation of virtuosos of the violin which has built a story of music dedication and devotion towards its instruments.  Her biography is impressive too. https://www.francescadego.com/welcome. She has played Paganini´s oeuvres, using his Il Cannone Guarnieri del Gesu violin that has been kept in the Genoa Museum. Paganini (1782-1840) is considered the greatest violinist that has ever lived; and his compositions, including 24 Caprices, are perhaps the most difficult to play. Paganini was a prodigy as a performer (6), but his excellent quality was coupled with myths regarding his talent, and constant mobbing about his connection with the devil, given his superior qualifications. People couldn´t believe that he played solely from ordinary human efforts, so his extraordinary talent put him in the spotlight of bullying, which included demonization attacks, all with the purpose to hurt his reputation.  Nobody likes to believe that astonishing talent exists, and they cover you with lies to destroy your way up to the top.

Paganini was not only a showman of third-party oeuvres. He composed his own creations. The most difficult ones in history for violinists. When a violinist overcomes with success the oeuvres of the best-talented predecessors and begins to create and design his or her own compositions; that is when strategic agility happens.  Strategic agility, as a mélange of strategic sensitivity, resource fluidity, and leadership unity can be found in Paganini. Francesca Dego has the correct foundations to stretch and expand herself to become a composer. If she can play Paganini´s music, we also expect from her new violin compositions, much well elaborated or higher in difficulty than Paganini´s. We anticipate her own composer role breakthrough during the rest of her lifetime, as much as we expect it from the rest of the new generations of violin virtuosos that we have shared in this saga. Cheers!

Songs of today are interpreted by Joshua Bell. We have selected two oeuvres. The first one shows Bell playing with Peter Dugan at the piano performing Frederic Chopin’s Nocturne Op. 9, No. 2 in E-flat Major for “the Oregon Symphony Gala 2021: The Music Plays On”. The second one is a song from the Beatles “Here comes the sun”. Bell is joined by 13-year-old cellists Ian Maloney and Dylan Wu for the occasion. Enjoy the music!

See you next Friday, with the 23rd episode of “What´s up with water: Pouring water in your corporate strategy: Strategic Agility is not NAIQIs”. Thank you for reading to me.

Sources of Reference utilized to prepare the slides and the material above:

(0) https://www.leadershipnow.com/leadershop/9780273712442.html

(1) Doz, Y. and Kosonen, M. “Embedding Strategic Agility: A leadership agenda for accelerating business model renewal”. Elsevier, Long Range Planning 43 (2010), pp 370-382.

(2) Presentation by Doz-Kosonen to the Wharton Club of Northern California.  Wharton West, San Francisco February 7th, 2008. http://www.whartonclub.com/article.html?aid=867

(3) Doz, Y and Kosonen, M. “The dynamics of strategic agility: Nokia´s rollercoaster experience”. California Management Review. Spring 2008 Vol 50. No. 3. cmr.berkeley.edu

(4) Knutsson, A. & Bukachabia, I. “Preparing for change”, an exploratory study on how Swedish organizations can implement strategic agility. The University of Gothenburg, School of Business, Economics and Law. Master Thesis by the authors, Spring 2021.

(5) Julian Birkinshaw on Strategic Agility in a World of AI presentation at London Business School Worldwide Alumni Celebration 2018. https://julianbirkinshaw.com/index.html

(6) https://www.biography.com/musician/niccolo-paganini

Disclaimer: Illustrations in Watercolor are painted by Eleonora Escalante. Other types of illustrations or videos (which are not mine) are used for educational purposes ONLY. Nevertheless, most of the pictures, images, or videos shown on this blog are not mine. I do not own any of the lovely photos or images posted unless otherwise stated. 

Published by eleonoraescalantestrategy

Corporate Strategy Artist, San Salvador, El Salvador View all posts by eleonoraescalantestrategy