Agile manifesto and business leadership
There is a lot the business world can learn about the way software is developed. Coders hate inefficiencies and wasted work, but they love structure. The structured nature of software development was, however, for a long time incompatible with the somewhat chaotic world of business. One of the breakthroughs to improve the speed and efficiency of that interaction was the agile manifesto.
In many ways, businesses now are dealing with similar challenges as coders 20 years ago when the Agile manifesto was published:
1. Accelerating change: Customer demands and competitive environments are changing rapidly.
2. Internal friction: The execution of a strategy or investment will face unpredictable challenges due to inflexible organization or culture.
3. Unpredictable future: The crucial problems cannot be defined upfront due to unforeseen changes in the environment, especially due to digitalization.
4. Complexity: Increasingly complex value streams require open collaboration and data across systems.
The key problem to be solved here is the speed of execution and feedback loops. Especially in the corporate strategy domain, the implementation is arduous, and feedback loops, if they exist at all, are long and weak. Companies cannot afford to have 3–5-year strategy cycles in a world where well-established business models may be outdated in a week.
StratOps – Learning while executing.
We applied the agile and DevOps methodologies and ideas into the business strategy world, and in combination with our own dynamic strategy model we came up with StratOps.
StratOps is a method to identify improvement areas between strategy development and operational execution. This method aims to accelerate execution and learning from strategic decisions dramatically. It combines various existing and emerging leadership models and tools (such as OKRs, Scenario thinking, Future back analysis) into a framework that companies can implement in whole or in parts.
As with IT's DevOps model (check out the DevOps principles below), implementing StratOps in an organization requires building a culture of shared responsibility and openness. This requires more people in the company to be involved in the ideation and realization of the strategy and be empowered to find innovative solutions to meaningful problems.
Establishing this needs shorter and accelerated feedback and execution processes in the company. Data needs to be collected on everything, and the processing of that data should be as automated and real-time as possible.
Continuous learning happens when everyone in the organization has the same objective and vision, access to performance data, and can experiment and learn from mistakes. Their experiences lead them to build a better working environment for themselves and others ideally.
StratOps - Overview
StratOps model consists of eight steps (Figure 1):
1. Insights – Continuous collection and analysis of strategically significant insights from the operational activities to which everyone in the company participates.
2. Trends – Continuous scanning of the environment and emerging trends, focusing on the elements critical to the future scenarios.
3. Scenarios – Combining the trends and insights into plausible stories of the future and creating data-simulated market scenarios to understand potential destinations and paths.
4. Vision – Identifying and articulating the direction and potential pathways and ensuring the vision and scenarios are continuously enforced and communicated to the company and its ecosystem.
5. Objectives – Clear, high-level action plans and priorities are communicated and reiterated with various company teams to ensure meaningful work and allow for continuous feedback and follow-up of results.
6. Prioritized tasks – Teams break tasks down into understandable parts that can be reprioritized and adjusted according to changes in objectives. Tasks are handled by those most capable of executing them at any given moment.
7. Execution – Incremental, continuous development according to prioritized tasks.
8. Results – Execution results are collected and scrutinized based on various data streams.
We live in a world where technology and data do not necessarily provide a competitive advantage anymore but are rather pre-requirements to play. Only agility and innovation create competitive advantage. Old strategy execution paradigms are too slow for the new world, and the myriad emerging new methods and tools require a sound, stable foundation. Incorporating the StratOps principles into the strategy development process effectively drives more inclusive and informed execution and results.
In the next articles, we will continue to investigate the crossroads of strategy and operations and highlight, e.g., the importance of strategic architectural planning, ecosystem management, and data strategy in the execution of StratOps.
Also read about the difference between the traditional and dynamic strategy approach that StratOps is built on in this article.