What is ‘agile’ strategy and is it (still) a good idea?

It is frequently argued that strategy’s holy grail—the pursuit of sustained competitive advantage—is futile in today’s volatile, uncertain, complex and ambiguous (VUCA) world, and especially in times of crisis. Instead, so the argument goes, organizations should focus on “agile” strategy, thereby realizing a dynamic and continuous stream of short-term advantages.

There are countless articles now from Harvard Business School, McKinsey, Accenture and the like about agile business practices. From there, new versions and applications of the original agile idea have come up. You quickly find papers and articles about quality, focus adoption, and transformational agile strategies. But is this move toward “agile” a good idea in strategy? Does making strategy more agile even help? What are the risks of agile strategy?

Origins and meaning of agile strategy

The idea behind agile strategy is not new. Far from that. Both with respect to the content and the process of strategy it has been around for more than three decades.

With respect to strategy content it appears in one of the core discussions in the strategy literature over the past 30 years—in the discussion about what can be an organization’s internal sources of sustainable competitive advantage. In the 1990s, the focus was on resources. About a decade later, and realizing that resource-based advantages can only be temporary, the attention shifted to the processes by which the resource-base is built, organized and maintained: to dynamic capabilities.

Arguing that also dynamic capabilities cannot provide an organization with a sustainable competitive advantage, the discussion has also taken us to core values as basis for sustainable competitive advantage—an idea popularized by Simon Sinek with his focus on the "Why." In this light, the current trend towards further agility can be understood as surrender: as completely giving up the idea of any source of competitive advantage that can be sustainable.

With respect to the strategy process, there has been a similar development. Initially, strategy was a synonym of planning. It was even called "business policy and planning" or "long range planning." The core idea and sought benefit of planning was that planning provides a stable basis for an organization to rely on for the medium and long-term. However, as early as the 1970s the limitations and impossibility of long-term planning became clear as well. In response, there are pleas for more adaptive approaches to strategy that rely on trial-and-error and learning instead of planning. The word “strategy” was suggested to replace planning, to account for such more adaptive approaches.

Without question, Henry Mintzberg is the core contributor to this idea. From his early writings in the 1970s to his recent work, Mintzberg has been and still is an active proponent of a more adaptive approach to strategy. Also in this light the current trend towards more agility can be seen as surrender, as giving up the idea of a stable basis for strategy.

Because, even though Mintzberg quite aggressively promotes the idea of strategy as learning and adaptation, it is immediately clear from his writings that intentions and planning play a crucial role as well. For Mintzberg, an organization’s actual strategy (its "realized strategy") is always a mix of what it planned (its "intended strategy") and the unexpected events to which it had to respond ("emergent strategy"). Unlike Mintzberg, though, the agility trend today suggests fully abandoning the idea of planning and instead suggests strategy should be adaptive, a response to what happens around the organization.

Benefits of agile strategy

Agile strategy comes with benefits and risks. Let’s start with the benefits.

Risks of agile strategy

More agility is good when the point of reference is a rigid approach to strategy focusing on long-lasting advantages and long-term planning. There is a point, though, at which more agility becomes a risk. After several decades of arguing that strategy should become more agile, it seems to me that that point has now been reached. The risks are at least threefold:

Conclusion

Even though making strategy more agile sounds like a good idea, there are substantial risks if this is taken too far. And especially in today’s VUCA environments, also stability is needed.

The metaphor of a tree is useful here. To weather a storm, a tree needs to be flexible and bend with the wind. However, it also needs firm roots that nourish it and that make sure that the tree does not get blown down. The same applies to strategy. It needs to be flexible so that it can respond to ever-changing circumstances. However, like a tree, strategy also needs to be firmly grounded so that it serves as a reliable foundation for building and growing the organization and for keeping the organization standing in the challenging circumstances of a VUCA world.