Analysis: organisations need to use strategic agility to deal with the massive disruption caused by the pandemic
It is a truism in business education and practice that the business environment is swift-moving, ever-changing and unpredictable. There even is an accompanying leadership principle - VUCA - which outlines the volatile, uncertain, complex and ambiguous nature of business.
In the pre-Covid-19 business world, organisations had been experiencing disruption wrought by technological developments such as artificial intelligence, as well as other factors such as intense competition, globalisation, Brexit, political instability and constantly evolving customer needs. However, the pandemic has upended businesses, industries and society. The lockdown, restrictions and public health measures have had a drastic impact on our lives and how we do business. Being able to adapt to change, or being strategically agile was always critical for organisations, but it has now taken on an even greater urgency in a post-Covid-19 world.
Strategic agility is an organisation's ability to depart from its current strategy in response to disruptive changes and chart a new strategic course to avail of business opportunities and dilute any possible threats that may impact negatively upon a business. Harvard Professor John Kotter defines strategic agility as "the capacity to spot strategic issues that are coming at you, in time to act on them. Leaders who display strategic agility are able to turn perceived threats into opportunities quickly, and they execute just as quickly". A further insight is offered by Professor Rita McGrath who refers to strategic agility as the ability to "see around corners".
From RTÉ Radio 1's Morning Ireland, Rosemary Garth of Irish Distillers on the company's plans to make hand sanitising gel in partnership with Cork's Mervue Laboratory
The business world is peppered with examples of agile organisations who have charted a new course for themselves by developing and indeed diversifying in new directions. For example, Amazon’s business model is essentially one of disrupter. It has continuously developed its business model from the original online bookstore in 1994 to a giant online marketplace today where customers can buy from the company itself as well as third party sellers.
But it is more than a marketplace and now constitutes a content community where customer reviews are sought out by prospective buyers as part of their purchase decision-making process. In 2017, Amazon purchased the Whole Foods grocery chain and has recently been rolling out its Amazon Go service in the US. A combination of the customer’s use of an app and credit card billing, along with Amazon’s use of AI, means that customers can literally grab their groceries and go from high-street Amazon stores that do not have checkout operators, tills or queues. Amazon have disrupted both the high street and their own business model, by transforming from a pure play online operator, to now also competing in the US bricks and mortar grocery market.
From CNBC, how Amazon's purchase of Whole Foods changed the grocery business
The importance for organisations to be nimble and to be able to pivot in a different corporate direction was very evident at the height of the Covid-19 pandemic where global players like Ford, Rolls-Royce and Airbus adjusted their manufacturing competencies to move into totally new areas of expertise such as building ventilators for the health sector.
Elsewhere, Irish Distillers partnered with Cork-based Mervue Laboratories to produce hand sanitising gel. The Local Enterprise Office presents numerous case studies of organisations in Ireland who adapted their business models despite the Covid-19 pandemic. One such case is that of Donegal-based company, Moville Clothing who went from making courtroom attire and clerical wear to producing hospital uniforms and scrubs.
From AutoTrader, Rory Reid looks at the reasons for the failure of the Dyson electric vehicle project
Being strategically agile means taking brave decisions, and this can also mean knowing when to walk away from a strategy or opportunity. In 2019, vacuum cleaner technology company Dyson announced that they were abandoning their electric vehicle project. Dyson's founder James Dyson explained that, while they had developed a "fantastic electric car", it was no longer "commercially viable…This is not the first project which has changed direction and it will not be the last". While Dyson’s vision of wanting to disrupt the electric vehicle sector ultimately failed, making the decision to strategically retreat is also a key aspect of agility.
It is clear that the old way of doing things is no longer a sustainable strategy in the current turbulent marketplace. Strategic agility in a Covid-19 business environment can involve an organisation adapting to significant disruption or even reinventing its business model.
To borrow a Chinese proverb that Microsoft’s National Technology Officer, Kieran McCorry recently quoted, "when the wind of change blows, some build walls, while others build windmills". An agile mind-set will ask how can windmills be built in order to adapt to the winds of change, but also to succeed despite the change.
The views expressed here are those of the author and do not represent or reflect the views of RTÉ