Strategic Agile Business Development

Agility in management, organizing and infrastructure

Management emphasizes immediate results especially during depression. Managers often claim to have their eyes fixed on the future, but the reality tells a different story – why is it that sales meetings always handle those deals that were never closed or the problems with clients, or the manager spends two hours presenting financial figures from the previous quarter.

An organization cannot be called very creative or future-oriented, if most of the time is spent reflecting on the past. Not enough time is spent on future deals or future events. Operationally, agility sets new standards for information systems, among other things. For example, inflexible ERP systems, lack of connections between different operations and specialized systems hinder agility.

A major organizing-related problem is that resources are easily tied down, which becomes evident as, for instance, the core business monopolizes all available resources or competent managers only orientate themselves towards the core business, consequently depriving new, promising business ideas of any resources and appropriately-skilled managers. Agile organizing aims at separating profit-making from the ownership of resources to allow free mobility of resources.

Individuals and Interactions – in agile development, self-organization and motivation are important, as are interactions between key stakeholders. Business in practice will be more useful and welcome than just presenting documents to clients in meetings. Requirements cannot be fully collected at the beginning of the business development cycle, therefore continuous customer or stakeholder involvement is very important. Responding to change is the key in the Agile Development, which is focused on quick responses to change and continuous development.

From agile software development to strategic agile business development

Agile software development is a group of software development methodologies based on iterative and incremental development, for example: “During each “sprint”, typically a two to four-week period (with the length being decided by the team), the team creates a potentially deliverable product increment (for example, working and tested software). The set of features that go into a sprint come from the product “backlog”, which is a prioritized set of high level requirements of work to be done.”

The agile business development can be seen similar way, but there is several issues that require more attention. The agile business development have:

  • to focus the whole business, not just a single product
  • to take account the whole product lines or family
  • more people involved to development
  • people from different functions e.g. sales, marketing, production, logistics
  • all issues that are strongly linked to business model, strategy model and its guidelines
  • more stakeholders such as customers (not just users, but also various decision makers), suppliers, partners, resellers, authorities, etc.

Accordingly, you need:

  • Enhanced visual collaboration between people
  • Element based business model (“what”) and strategy model (“how”)
  • Longer development periods – sprints 8than in agile software development)
  • Intensive and transparent top management involvement, because development based on strategy and business model
  • Manageable amount of “projects” or tasks, which are all linked to strategy
  • Keep deadlines (pedantic) and decrease “features”
  • Find customers with urgency to purchase your product or service right now
  • Focus on MVB – Minimum Viable Business (not just Minimum Viable Product)

The key issues of Strategic Agile Business Development:

  1. A sprint is a basic unit of development in the Agile Business Development methodology. Sprints tend to last between one month and three months, and are a “time-boxed” (i.e. restricted to a specific duration) effort of a constant length.
  2. Each sprint is preceded by a planning meeting, where the projects (or tasks) for the sprint are identified and an estimated commitment for the sprint goal is made, and followed by a review or retrospective meeting, where the progress is reviewed and lessons for the next sprint are identified.
  • Program per new business is about 30-40 projects or tasks
  • Reviews in sprint workshop
  • Status reports 1 page every month per project or task
  • Status meeting every week 30 minutes

Summary

Agile strategy is diversely present in the day-to-day operation of an organization and everyone experiences the challenges set by agility in different ways and at different intensity. A new era has begun.

Minimum Viable Business [MVB]?

You need to:

  1. Business model with visual elements (1 picture)
  2. Customer: there needs to be a sense of urgency to get the problem resolved right now. Not the largest potential market, but the easiest and the fastest one.
  3.  A Minimum Viable Product has just those features that allow the product to be deployed, and no more
  4. Pricing scheme simple as possible
  5. Sell something or anything to target customer
  6. No hiring: outsource everything; production, marketing, sales, logistics, delivery, etc.
  7. Use only ready and cloud based tools and processes for ERP, CRM, SCM, etc.
  8. Sell and deliver first via existing companies and found a company later on.
  9. Iterate your business model elements

There is a real need for agile strategy development?

What shuld be included to MVB – Minimum Viable Business?

Strategic agility – Agility must first be introduced to the way of thinking

We are often bound by our old habits, whereas an agile mind is able to find new perspectives. The desired state can be reached by answering the following questions: why do we exist and what will our market position be in the future.

Our strategic alertness may have been lowered if our desired state and our brands are set to fixed assets such as land, buildings and location. On one hand, they have been, and still are, means of differentiation, but on the other hand, they narrow down the strategic horizon. An open-ended business concept leaves room for new ideas.

Ambitious enough sets us free to look for new solutions

Another important provider of strategic freedom is the set goal. Too ”realistic” a goal narrows down our horizon, resulting in us mostly relying on the familiar ways of doing things and not daring to search for new solutions. A desired state that is ambitious enough sets us free to look for new solutions. This means that we can either limit or release our strategic thinking merely by the way we set goals.

A hands-on and shared feeling on business is crucial for innovation.

A third factor affecting strategic alertness is a shared goal. A common desired state helps look for and recognize new solutions. Finally, a wide network of contacts and close interaction with interest groups are important in defining your vision. Reading interest group analyzes cannot do this; it requires actually meeting a variety of people. A hands-on feeling on business is crucial.

Values form the basis for agility

Agility is created through open interaction that encourages involvement, and in which everyone aims for the same desired state. Agility incorporates discovering, recognizing, handling, deciding over and implementing new things. It has also to do with an organization’s capability to adjust to new situations.

Are the necessary decisions made solely among the management team, or are different units able to decide for themselves? Values that promote agility include

  • free participation,
  • openness,
  • efficient interaction (internally and with interest groups),
  • accountability,
  • initiative and
  • the courage to participate.

Strategic agility – Lack of genuine dialogue in business innovations?

In principle, big and small companies experience strategic challenges differently. Big companies struggle to make their sluggish and process-oriented organization more flexible, whereas smaller companies tend to be even too flexible and risk losing focus on their core competency. As a result, small companies easily waste their potential and miss the big picture, especially if the owner does not consider it a priority. Large companies do see the big picture, but fail in its implementation.

A lack of genuine dialogue

Both big and small companies suffer from a lack of genuine dialogue. Big companies traditionally tend to collect a lot of information, or rather data, that no one can process any further. Too centralized decision-making has also distanced the management from hands-on knowledge.

The division of thinking and doing still applies?

Small companies, on the other hand, have always relied on gut feeling. The problem, however, is that this feeling has been based on too few contacts and has been formed within too small circle of people. One of the biggest causes for problems in both big and small companies is too authoritarian leadership. Open dialogue is not even an option, if strategy does not involve the operational level. This century-old Tayloristic principle on the division of thinking and doing still applies to a number of organizations.
The challenge is to implement the strategy, to put it into action. This is what people often refer to when they say that the strategy was good, but its implementation failed. So traditionally the blame has been cast on the implementation, that is, on how the strategy has been communicated.

Increasing communication, clarifying the message and through training?

The situation has generally been attempted to remedy by increasing communication, clarifying the message and through training. However, this only serves to alleviate the negative effects of the problem and does not address the cause. The root cause of failure to implement resides within the structure of the strategy itself, in the division of thinking and doing. The solution is to develop understanding, motivation and passion.

What is strategic agility –

agile strategy?

An agile strategy is analogous to a large shoal of fish that changes course simultaneously to achieve its (moving) goal or waypoint. Agility is naturally opposed to inflexibility and constraints. Inflexibility is caused by fixed and unquestioned patterns of thinking, such as ”acquisitions never work out”, rigid contracts with clients and suppliers, monotonously repeated chains of operation and tight control systems in, for instance, budgeting.

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We have entered an era of strategic agility?

Strategy management has always been guided by different themes, which have defined how to build a strategic competitive advantage. These might have been the cost advantage in a given country, natural resources and the amount of resources, or process efficiency. Themes come and go as no single strategy can maintain the competitive advantage –

or is there such a strategy?

Now, in the beginning of the 21st century, the old cliché nails it: the only constant thing is change. Both big and small companies have traditionally built their competitive advantage into permanent structures. Large companies have relied on, for instance, a large production capacity enabling lower costs per unit, while local actors have benefited from their ability to adapt to local markets and stay close to their customers.

Both are in trouble now, but why are the times different from before?

Competition has certainly always existed, getting more intense all the time. So in this regard, nothing has changed.

Still, has a fundamental change nevertheless taken place?

Many industries, more than ever before, are facing:

  • hyper-competition, industry consolidation and change
  • an unparalleled rapid change in consumer behavior brought on by new technology
  • a deeper and wider recession than ever before
  • a great increase in expert involvement and the amount of available information.

It is no longer possible to leave the strategic decision-making to the top management team alone – the decision-making process needs to be decentralized. How can this be accomplished in a controlled way?

The answer is…

….by using agile strategy based on modeling, visualization and transparency towards all decision-makers, including those new in the process. At this very moment, a radical change is taking place, comparable to the turmoil brought about by industrialization.

Earlier, sustainable strategy (at least in part) could be built on fixed capital (factories, machines, land, etc.) or reproducible, efficient operation of high quality. Now, sustainable strategy rather leans on intellectual capital, such as know-how, branding, and the ability to constantly do something new and different, and do it better.

Monotonous repetition is out of fashion.

Sustainable strategy is achieved by doing things in a new way. Continuous renewal becomes the only sustainable strategy. This is new to strategic thinking, which until now has mainly pursued the benefits of sustainable strategy without being able to identify its main factor –

agile strategy.

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