Agile strategy

How can competitive advantages be continuously renewed for future profitable growth?

The average lifespan of companies continues to decline. For companies in the S&P 500 Index, for example, it has fallen from more than 30 years in the 1970s to 15-20 years now. Staying ahead of the competition is becoming increasingly difficult. The increasing speed of technological developments, local and global interdependencies, changes and crises, and the effects of climate change are creating a world that is increasingly risky, volatile, uncertain, complex and ambiguous. Securing one's competitive advantage, and thus sustained competitiveness and profitable growth, is thus one of the greatest challenges facing managers. Companies in the 21st century must be able to continuously adapt their business model and their competitive advantages to new changes by means of suitable strategic initiatives.

88% of strategy leaders confirm that implementing strategic initiatives is important or very important to their companies' competitiveness, yet 50-90% of all strategic initiatives fail!

The Economist Intelligence Unit, 2013; Candido & Santos, Journal of Management & Organization, 2015.

Yet most strategic initiatives to renew the competitive position fail. This is because classic strategy processes no longer meet the requirements of today's increasingly complex and uncertain environment. They typically run in elaborate 1- to 5-year cycles with annual budget planning. While companies try to counteract this with agile project organization, this is not sufficient to also carry out strategic development. Here, agile is worked in the system, but not on the system. This leads to numerous management problems such as:  

  • Too many projects without relevant impact
  • Lack of or incorrect resource/budget allocation
  • Missed opportunities and risks due to lack of agile decision-making capabilities

Agile strategy: strategic thinking instead of strategic planning

"Strategy, as we know it, is dead" claims management thinker Rita McGrath in her book "The end of competitive advantage". In fact, the change from strategic planning to an agile strategy process is overdue. Outdated models of strategic planning must be expanded to include new strategic approaches that take into account the requirements of the "new world". To be successful today, an agile strategy process is required for the continuous development and implementation of new competitive advantages.

Image title: Strategy development over the decades
Source: venture.idea

This can only succeed if strategy is no longer understood merely as analytical planning, but as a creative synthesis that can take place anywhere in the company.

Strategic planning was originally developed to provide managers and employees in organizations with a step-by-step plan to properly execute the conceived strategy. In dynamic environments, however, it is far more effective to align the organization to a vision or end point - and have the possible paths to get there defined at the point where the relevant information lies. This is the difference between strategic planning (analysis) and strategic thinking (synthesis) and links agile bottom-up processes with strategic top-down planning. 

Within this framework, it must be ensured that all relevant strategic options are always available and prioritized. Since these can no longer be taken up purely opportunistically with increasing complexity, speed and volatility in the market, this requires processes and methods for the systematic identification, iterative development and rapid validation of strategic options. In short: strategy development must become more agile and more systematic at the same time!

Strategic framework and process for agile strategy development

In order to enable established companies to develop an agile strategy, venture.idea developed the appropriate processes and methods in many years of practical work and research. Many proven tools and methods from the field of innovation were applied - because many innovation processes are already designed to deal with great uncertainty and volatility. And it is precisely in such a dynamic environment that strategy work must take place today. This must continuously and systematically identify strategic opportunities, develop them iteratively and validate them efficiently. Depending on the organization, this portfolio can be filled from within the entire company, by strategy and innovation units, or by external partners. An agile control system then allows the derived projects and initiatives to be continuously evaluated, prioritized and resources allocated. In this way, companies can continuously review their strategic orientation and align it with the changing framework conditions in an agile manner.


Image title: Agile strategy process
Source: venture.idea

Venture.idea supports companies not only in setting up the agile control system, but also with methodical support and content development of an agile strategy with a portfolio of relevant strategic opportunities for the future goal achievement of the company.  

"Thanks to the agile portfolio strategy, we always remain capable of acting even in an increasingly fast-paced and complex environment"
Timo Emmert, Commercial Director / Authorized Representative E-Commerce, MediaMarktSaturn
If you have any questions or want to learn more about this topic, feel free to let us exchange directly:

Lucas Sauberschwarz

Managing Partner
Expert in the field
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