Under pressure, a spring recoils to take the pressure as it is agile. However, a thin plastic sheet cracks as it is fragile. The consequence of what happens depends on the characteristic of the spring and the plastic sheet. The pressure applied is akin to challenges posed in this ever-turbulent environment that breeds disruptive technologies at an alarming pace. Organizations are either able to adapt to this turbulence or disintegrate due to it, depending on how agile or fragile they are.
The desire to and realization of the importance of becoming agile is predominant. How exactly does a business entity become agile and what should be done to avoid becoming fragile in the face of the relentless onslaughts of challenges being faced?
With the advent of disruptive technologies, business entities have to shift their preference to remain agile. Otherwise they become fragile and susceptible to failure. As long as they plan strategically, learn when necessary and exploit existing opportunities, they remain fragile. The degree to which these preferences shift towards scenario planning, unlearning and relearning continually as well as exploring beyond existing opportunities, they become increasingly agile.
Scenario Planning over Strategic Planning
Strategic planning involves structured consideration of internal and external issues to develop the one true ‘best way forward’. Scenario planning involves developing different scenarios and analyzing different ways of moving forward. Strategic planning is premised on a predictive approach to strategy development that assumes it is possible to predict the future. Scenario planning is premised on an adaptive approach that embraces change and incorporates this into a planning horizon.
This involves asking and seeking answers to the “what if” questions, rather than assuming all will work well once a strategic plan has been established. When business entities encourage senior management to ask “what if” questions regularly, they remain agile. Otherwise they become fragile, susceptible to the changing business terrain.
Unlearning and Relearning over Learning
As uncertainty takes center stage within the business ecosystem, the need for better understanding increases. Better understanding comes from developing accurate and deep insights of issues from many different perspectives that require unlearning previously held perspectives.
A willingness to unlearn, learn and relearn continually is required to adapt and remain agile. Acquiring knowledge only when necessary without sufficient understanding leads to fragility, especially whenever the need for new processes and systems overwhelms the capacity to develop them. Comfort zones are the enemy of growth.
Exploration over Exploitation
When the focus is in exploiting the existing business model, fragility sets in whenever the existing boundaries of exploitation are approached. Many car manufacturers in the US suffered huge losses when to the exploitation of their existing patents and intellectual property led to market fatigue and declining sales margins. Their inability to innovate and ‘explore’ led to their downfall, and the rise of Tesla Motors. Elon Musk, an ‘explorer’ in the truest sense, managed to forge a path for himself beyond the self-imposed boundaries of the auto industry, and challenged the very notion of ‘driving’, and the concept of ‘cars’. Only when faced with increased competition did the traditional car manufacturers relent and explored other possibilities, such as electric vehicles and self-autonomous vehicles.
To explore beyond the boundaries of existing expertise and capabilities requires agility and adaptability. Better mechanisms for optimizing existing knowledge assets are sought for exploration to occur. Knowledge acquisition, creation and integration on a regular basis becomes a mainstay that facilitates agility and adaptability. By exploring what lies beyond what they are doing, they remain agile.
To be agile, business entities should shift their preference towards scenario planning, unlearning and relearning and engage in exploration over exploitation. By doing so, they remain agile, otherwise, they become fragile in the face of disruptive technologies they encounter.
Dr Rumesh Kumar