In my previous post I discussed the definition of Strategic Agility and the benefits of being strategically agile. In this post I’ll focus on the different levels of agility.
According to Professor Donald Sull of the London Business School (2009), your organization can become more agile on three levels:
- Strategic level (strategic agility): this relates to recognizing and exploiting market opportunities and game-changing opportunities. Think of companies like Apple, Philips, Google, Fujifilm and DSM that continuously introduce new innovative products and services.
- Business-portfolio level (portfolio agility): this level relates to a quick and efficient redistribution and transfer of employees, resources and money from underperforming areas to more promising product-market combinations. This, for example, is where companies with lots of competitors operate, like Vodafone, Procter & Gamble, Randstad, Amazon and banks and insurance companies.
- Operational level (operational agility): this level relates to cleverly seizing opportunities within a particular business area. Operational excellence companies such as Wehkamp, Dell, Ryanair, Zalando and various internet companies, educational institutions and healthcare organizations excel in this.
Many traditional companies rely solely on operational agility or portfolio agility. Strategically agile organizations are agile on all three levels. They identify and exploit market opportunities and are able to introduce new innovative products at the right moment.
Let me be clear here. Focussing on portfolio agility or operational agility is in no way bad. The companies mentioned (Amazon, Zalando, Ryanair) have shown tremendous growth in the past years. However, on the long-run, strategic agility, incorporating both portfolio agility and operational agility, helps companies to grab more and diverse opportunities. Making them more resilient to change.
Become agile on all three levels
How about your company? Are you agile on all three levels or is it a specific level your company focuses on? It’s also possible that you don’t identify with any of these levels due to a lack of agility.
In our next post we’ll focus on the building blocks of Strategic agility and how to improve these.
- Top executives believe that their companies should become more agile to stay relevant for customers, attract talented employees and increase profitability. (KPMG,2012)
- Over 90% of companies and governments are convinced that a cooperative network and open innovation are crucial factors in order to survive in the future. (ACE,2012)
- 82% of the top executives sees IT as critical success factors to change business models. They also see IT as a key driver to achieve competitive advantage (Economist Intelligence Unit, 2005)
- 34% of managers say they have a competitive disadvantage because they are not agile enough (PMI,2012)
- 71% of top executives say that technological development is the most important factor for change in the next three to five years. (IBM, 2012)