Agile Strategy

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Strategic agility means both being able rapidly to adapt existing ways of thinking and move faster than the competition, without disrupting operations. That implies formulating strategy in an agile way, developing an agile operating model and running processes with agile teams.

Whilst specific practices and may differ, each of these requirements implies a methodology based on a few fundamental principles:

We have named the basic approach behind agile strategy formulation ‘directional strategy’; the approach behind an agile operating model ‘leading through intent’; and the approach behind agile teams ‘agile practices’.

The value of each of these approaches differs according to context. Some businesses are still quite stable and require only a light touch on the tiller. Others are having their traditional business models overthrown by disruptors and are having to re-invent themselves. Many are in between.
We do not believe in ‘one-size-fits-all’ solutions. We do believe that the number of businesses needing a directional strategy, an operating model based on leading through intent and processes using agile practices is increasing. But not all businesses need them all, and a few businesses do not need any. The variables are the familiarity of the uncertainties they are facing and the nature of the ways of working they require.

The important variable in the environment is how predictable it is. This is largely driven by its familiarity. Many businesses routinely deal with uncertainties which would defeat others because they are familiar, and the organisation has learned over time to create processes and techniques to deal with them. Pharmaceutical companies routinely make big bets over which drugs to move into Phase III development; oil companies can make fairly good decisions over drilling exploration wells. Neither could do what the other does.
However, if the environment contains uncertainties that are unfamiliar, past experience is a poor guide to the future and making predictions becomes dangerous.
The important variable in the ways of working is whether they should be optimised for a steady state or adaptive. The ability to adapt has a cost. In some cases, it is better to standardise and hone efficiency introducing incremental improvements. Many – though not all – manufacturing and logistics processes are like this. In others, adaptation to continually changing circumstances is a necessity. Many innovation processes are like this.

Directional Strategy
Directional strategy is a way of formulating strategy is such a way as to give clear direction and focus, but give space for the flow of course adjustments which come from agile operations and allow for more significant changes of direction without disruption.

Instead of reducing uncertainty to a set of risks that can be adjusted for, it recognises the reality of radical uncertainty and places it at its heart. When a business is faced with unfamiliar uncertainties that could have a significant impact, a directional strategy will make it more robust to threats and faster to exploit opportunities than a traditional strategic plan.

Directional strategy is based on four fundamental principles
 
Principle 1: A set of beliefs provides orientation
There is no data about the future, so orientation should be provided by a set of beliefs about what will drive the business in the future and the principles which should guide action. These might be fundamental tenets (‘the value of customer loyalty far outweighs the cost of providing outstanding service’) or hypotheses which could be tested (‘customers will pay a premium for a wider range of choices). Beliefs need to be made explicit, shared, debated and reviewed at regular intervals.

Principle 2: Direction should be set as a compass heading
Direction should be set as a compass heading, not a destination, i.e. ‘go West’ rather than ‘go to San Francisco’. In radical uncertainty, it is not possible to see far enough forward to specify an end-state – but you do not have to. You can give a clear direction and focus by specifying a compass heading in terms of what has to be done now in order to thrive in any plausible future. For example ‘speed up the move to digital’, ‘develop new employee value propositions’, or ‘reduce innovation lead time’.

Principle 3: Optimise decisions for robustness
The question to ask is: ‘Of all the options that will produce a satisfactory outcome, which one does so under the widest range of possible futures?’ In this way, you can avoid what could kill you, but also be on the lookout for kickers – the unexpected opportunities under which you could win big.

Principle 4: Set up a review process
A review process enables you to re-assess the situation and your beliefs and so change stance. A stance is a decision to wait and prepare or to take action, either to learn, to have an impact, or to shape the environment. The review process defines an operating rhythm in which the first question in each review is ‘has the situation changed?’ In this way, strategy development and strategy execution become unified, and the unfolding of strategy becomes a series of moves which are constantly evolving.

Leading Through Intent is a proven solution for businesses seeking to implement an agile operating model

The challenge of execution is to close the three gaps. Doing so requires a holistic approach, which we call ‘leading through intent’.

Read more about The Three Gaps
Leading Through Intent is the solution of choice for organizations seeking to implement an agile operating model at the enterprise level where operational planning and execution merge. For either to succeed, an agile operating model is required to connect Agile Direction (formulation of ‘direction’ at the strategic level) with Agile Execution at operational and team levels.

Leading through Intent enables leaders to think strategically whilst acting operationally. Its benefits include:
Clarity
Organizational alignment and connectivity
Improved decision making (speed and quality)
The ability to withstand and adapt to changing situations without disruption
Increased productivity
Improved organizational resilience through developing leaders at all levels

Leading through Intent describes an intent-led approach to execution, focused on outcomes rather than means. It is based on the insight that you can have high alignment and high autonomy at one and the same time – the more alignment you have the more autonomy you can grant. And it starts at the level of strategy.
Leading through Intent was specifically designed to meet the challenges of executing strategy in dynamic and uncertain environments.

Proven throughout history
Leading through Intent is not a new idea.  It has emerged in various organizations at various times when the environment in which they operated was fast-moving, uncertain and volatile, and the information processing capacity and communication systems they had available were unable to keep pace, rendering tight control self-defeating or obsolete.
We can all recognize that environment as the one we work in today.  If you disagree, what we have to offer is not for you.
Organizations that developed some form of Leading Through Intent include the Roman Army, the C18th Royal Navy, the C19th Prussian Army and many contemporary western armies.  Its principles and practices can also be adopted by modern businesses. For more than ten years we have been doing just that.
The common idea behind these historical examples, which have been described as auftragstaktik (mission command, mission-type tactics or intent-based leadership) is that organizations able to operate effectively in chaotic and uncertain environments give clear direction (focused on the outcome rather than the means of achieving it) and enable leaders at all levels to use their disciplined initiative within clearly defined boundaries.
In essence, leading through intent involves creating alignment around an intent, which is a clear expression of what to achieve and why, and granting as much autonomy as possible to teams and individuals to decide how.
Core beliefs of Leading Through Intent
As a cultural philosophy Leading through Intent has a core set of beliefs which collectively describe the way it is intended to work in practice. These beliefs are codified into repeatable practices and specific leadership behaviours.

Belief 5

Belief 1
Intent is always preferable to instructions

Leaders must set out a clear intent but resist the temptation to issue detailed instructions and then micro-manage people. When people have a clear picture of what success looks like and their freedom to act, they don’t need instructions on how to act.

Belief 2
When we trust people, they don’t need tight control

Leaders exercise minimum control over their subordinates, consistent with the situation and the subordinates’ capability and experience.

The ‘friction’ associated with fast-moving and uncertain environments will not be overcome through more detailed communication or control, even though leaders remain accountable for their actions.

Belief 3
Decision making must be conducted at the lowest appropriate level

Leaders at the strategic or operational level cannot feasibly make timely and appropriate tactical decisions.
These are best made quickly by subordinate managers on the ground.

Belief 4
Everyone has a role to play in translating intent into action

When people understand the intent and clear boundaries, they have the freedom and the responsibility to use their individual initiative to solve problems and decide how to achieve the intent, within agreed boundaries.

Belief 5
We allow people to adapt action as the situation changes

Everyone has a responsibility to act (or not act) as the situation changes, informed by the overall intent and their boundaries.
Allowing people to adapt and solve operational problems as they encounter them requires high levels of trust and confidence.

Leading through Intent Practices
Practices describe practical things leaders must do to apply the principles of Leading through Intent. We’ve identified six practices that can be codified and taught to leaders participating in a Leading through Intent development package. These practices can be rehearsed in practical application to provide learning opportunities and to build intent-based leadership skills and confidence.
For practices to become a familiar habit, they must be repeated again and again in order to learn or improve.
Practice 1. Being clear about the context and what really matters.
Practice 2. Formulating intent based on outcomes, not activity.
Practice 3. Translating intent into action and briefing to create shared understanding,
Practice 4. Facilitating alignment by backbriefing.
Practice 5. Giving people freedom to act.
Practice 6. Supporting people to act and make decisions.
Behaviours
Any organisation seeking to adopt an agile operating model will need to embed fundamental changes in leader behaviour. We’ve noted that leaders in challenging circumstances often respond in similar ways. Sometimes these behaviours result from formal training, though more often than not they reflect common practice in today’s organisations. David Marquet (author of ‘Turn the Ship Around’ and ‘Leadership is Language’ describes these as patterns of action and language. 
David Marquet describes the problem with these patterns …most of us are working with an outdated playbook: plays that we have been programmed to run from an older paradigm of leadership – the Industrial Revolution.
In essence, many leaders are well equipped to deal with yesterday’s leadership challenges, and we need new ‘plays’ appropriate in today’s environment. Leading through Intent is focused on changing leader behaviour to implement these new plays.

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