Solving tensions: a key step
Strategic agility is tough because there will be tensions when you try to resolve competing demands. Such tensions include career progression considerations – that is, an “I want to play it safe so that I will be promoted more easily” attitude – as well as having too much homogeneity in executive teams, which can “stifle innovation and reduce the chance of an outlier idea pushing the needle forward”.
“The more senior people have to accept they might not have the best ideas,” said Girod, referring to the way certain mindsets could create tensions. “In fact, they may well be more out of touch with the market. Take digital transformation, where the more senior people are indeed likely not to be the best prepared.”
It was partly this realization that led the hotel chain Accor to give junior employees a chance to come up with a new brand under Accor – JO&JOE – as a means to find an effective way of competing against Airbnb with a new sort of offer for millennials, in a context where ideas were being blocked at the top due to a lack of diversity.
Crucially, by structuring the junior team directly beneath the management, they were shielded from cost imperatives and corporate pressures.
KPIs that can be used to measure such an effort include monitoring on a quarterly basis what share of new business streams have been created, and rewarding management for that progress and the links made between core and new businesses.
Too many companies have good ideas but structural issues, politics, and social movements often stall matters, and this is frequently overlooked, said Girod.
The essence of strategic agility is reconciling competing demands to be more flexible and entrepreneurial. Ask: What are the strategic competing demands that matter to my business? What tensions are likely to result from trying to pursue competing priorities? How can we resolve those tensions? And, because this is dynamic, always keep an eye on whether there are new competing demands that you need to face.