Entrepreneurial strategy in times of agility
BY BARTOSZ PRZYBYLEK
(Published in The Produktkulturmagazin issue 2 2018)
We waste time with long analyses and outdated methods, only to discover that our lives are being squandered, with no masterpiece to show for it. Even a visionary cannot implement a strategy on their own. The aim is to select the right methods, promote employees’ initiative and to anchor strategy in the company in a decentralised way. Because the effort to implement strategy is the sum of ability and determination.
Time is flying by. It always has. Now, however, something is different. Because time, speed and acceleration are perceptible only in relation to one’s own environment. This has changed in recent years, and its new cornerstone is aptly described by the English acronym VUCA: Volatility, Uncertainty, Complexity and Ambiguity. The amount of data available to us is steadily increasing, particularly as a result of globalisation and the digitalisation of processes. This also increases the complexity of systems that can no longer be grasped by people alone. That is why we enlist data analytics tools and are coining new semantics we can use to describe our world. We don't just feel volatility in our Bitcoin wallet. Today, all it takes is a tweet by a head of state to trigger massive fluctuations in price. Whether these are mere threats, a tactic in a political campaign or the announcement of real actions – we cannot classify it. Because there is critical data that we lack or cannot understand, we have no choice but to live with more and more ambiguity and less certainty about the truth.
This is the world in which we live – not just as individuals but as entrepreneurs or managers, too. New market actors that are often extraneous to the industry and have innovative business models to offer can use their blend of products and services to get even loyal customers to migrate. We have to do more and more to at least maintain the status quo. The thinking and the work methods which we are accustomed to are no longer possible, and time is not on our side.
As the protagonist of Marcel Proust’s "In Search of Lost Time" realises only too late, rather than create a masterpiece, he has wasted the better part of his life on trivial acquaintances and liaisons. Successful entrepreneurs in particular make it a point not to waste time. Without wanting to make any statements about his private acquaintances or even liaisons, it is worth noting that Amazon CEO Jeff Bezos has banned PowerPoint from all management meetings. Employees are asked to write a structured memo about the context of the meeting in advance. This is read by all participants at the beginning, and the meeting is devoted exclusively to discussion and decision-making. Avoiding inconsequential bullet points and dalliances with decks of vague slides is his motto.
But banning PowerPoint alone is not enough. Companies need a systematic response to today's framework conditions. One response is agility. Supplemented by further principles, the values found in the Agile Manifesto – originally an offshoot of software development – are being applied to more and more businesses, even beyond IT projects. In lieu of command & control or micromanagement of employees by managers, the focus is on individual responsibility and self-determination. Processes in decision-making and development are also ultimately accelerated if they do not have to cross the desks of top management. With the aid of agile methods and structures and working in iterative cycles known as ‘sprints’, self-organised and heterogeneous teams set themselves targets on which they train their absolute focus during each phase. Each phase is to lead to something as relevant as possible for the customer and be tested in real conditions. This reduces risks such as ‘running in the wrong direction’, permits valuable learning through errors, accelerates output for the customer, and keeps the company competitive. At the same time, firmly planned and self-organised phases in the midst of the accelerated VUCA environment make it possible for employees to regain their sense of time and duration. How you spend your time is no longer determined by someone else: it is in the individual’s own hands and can be seen as meaningful once again.
This construct entails a transformation in the classic role of management. Managers provide a role model of agile values and create framework conditions characterised by transparency and openness. A particular element of this is the open exchange of information, because only then can teams set themselves the right sprint targets and achieve these efficiently.
Symbols and metaphors characterise the mental image we have of strategy. They include the compass, the map or, most recently, the navigation device. It’s all about the orientation: the one destination and the one path to get from A to B. Michael E. Porter and Henry Mintzberg, widely considered the most famous management theorists, are exemplary of the classic understanding of strategy. According to Porter, strategy is something fundamentally plannable and is directed essentially at gaining a competitive advantage through distinguishing characteristics. The stakeholder employs ‘five forces’ to examine their own industry and resolutely stake out a position within it. Mintzberg’s understanding of strategy is reflected in his 5 Ps of Strategy. These are: Plan, Ploy, Pattern, Position and Perspective. Reduced to its simplest terms in a single sentence, the aim is this: to know the internal and external factors involved, benchmark, learn from the past, look to the future, position oneself, plan, be the visionary from time to time, complete things as planned – all of which makes strategy the pattern that shines through in the flow of decisions taken.
There once was a time when structural economies of scale counted, which was why methods such as Porter’s five forces worked. One knew one’s fixed industry structure – a structure defined by current and potential competitors, customers, suppliers and products. After a thorough analysis, this approach may still apply for a moment or two today, but it is much more likely that the results obtained will no longer hold true tomorrow. A long-term strategy based on a rigid definition of an industry does not lead to the desired masterpiece.
Individual strategic methods and their variations in use are losing importance. Benchmarking, for instance – the ‘copy and paste’ of strategy – no longer leads to lasting success. Detailed business cases are no more valuable than a gaze into a crystal ball. It’s slipping away from us, our precious time. Individual tools or their use become the liaisons or trivial acquaintances over which one is only annoyed in retrospect, and that stand in the way of one’s masterpieces. New methods and approaches are required. If the GAFAs (Google, Amazon, Facebook, Apple) had simply followed what the benchmarks of the Fortune 100 were at the time, they would certainly not have advanced to where they are today. Worthy of emulation, on the other hand, are the determination and ability, particularly in the case of the GAFAs, to implement their strategies. Particularly where digital strategies are concerned, regardless of the size of distinctions between them and other business strategies, what many companies often lack is not one single or the right strategy. The problem lies in execution.
There are many reasons why an attempt to execute might fall short. One factor these attempts often have in common is the basic error of thinking of execution as separate from strategy. Put in radical terms: implementation is part of the strategy. The world rotates several times around its axis as the typically lengthy phases of strategy development play out. From a customer’s point of view, once it has been implemented, the objective that was once thought to be so promising is as interesting as a Nokia mobile phone. Strategy can no longer be developed by Group A and simply implemented by Group B. In terms of the communication, motivation and time involved, the effort and expense are too high. The organisational conditions and expertise that the new strategic objectives require need to be available, too.
The underlying idea of work on strategy remains: set goals and implement them. One way to implement a strategy is to begin with a future target and then, looking backwards, consider the things that need to occur prior to the target if it is to come to fruition. On a meta-level, the same dynamic applies to implementing the strategy itself. Viewed in the abstract, carrying through with a strategy is a sum total of ability and determination. And yet the ability and determination of a single entrepreneur are not enough to create a masterpiece – and this is where agility comes in. It provides us with structures and a kit of methods that can be deployed to advance from thinking on the part of one person to action on the part of many.
Agile teams are distinguished by independence and responsibility. Thanks to their proximity to the customer, these teams know the customer’s needs and the market as well. Instead of a separate strategy unit, today’s team calls for people with expertise in classic and modern strategic tools. Aware of the company vision, teams set themselves not only their regular sprint targets, but also corresponding strategic targets, which they continuously adapt as needed. Management has a communicative and coordinating role to play here, questioning, honing and promoting these strategic goals in dialogue with the sprint teams.
This way, strategy is no longer the exclusive task of management; instead, it is developed by the people who also implement it. This goes hand-in-hand with the principles of agility and promotes autonomy and responsibility – both necessary prerequisites for determination and initiative. After all, in the right environment, people who truly want to achieve something will also find ways to make it happen. This anchors the development and implementation of strategy in a decentralised way throughout an enterprise and integrates these in iterative thinking and action.
Bartosz Przybylek, born in 1984, holds a degree in philosophy; he is an entrepreneur and management consultant for strategy and digitalisation. He has been advising SMEs and corporations in matters of digitalisation since 2013. He works with them to develop integrative and innovative corporate strategies and business models; he naturally also assists with their implementation. He is also a Cosmonaut for The Group of Analysts.
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