Have you ever felt like your organization’s products, services and ideas tend to be just one step behind the market? In today’s business world, companies need to adapt and innovate rapidly to keep up with market demands. Companies find themselves changing and developing in such ways by harnessing new ideas and competencies that allow them to create competitive advantages. This can be a challenge which is why so many business websites, journals, blogs, etc. are focusing on the benefits of strategic agility and systematic innovation. In this article, we will discuss what strategic agility and systematic innovation refer to and how they can help improve the function of your business.
What are Strategic Agility and Systematic Innovation?
The definition of strategic agility is the ability for organizations to see shifts inside the business as well as externally in the business environment in which they operate. A company that uses strategic agility will apply these competitive skills to create new products and services as well as new business models.
Systematic innovation refers to the planned and coordinated ongoing effort of organizations to create something new using a strategy rooted in business creativity. An organization using systematic innovation will create a system to support its innovative efforts that involves various perspectives or departments working towards a common goal.
Used together, strategic agility and systematic innovation can create a powerful vehicle for growth and change within an organization.
Understanding Strategic Market Vision and Growth Mindset Perspectives
Business leaders, including Steve Denning, study and write on strategic agility and innovation frequently because these methods have proved useful time and time again. Innovation centered around creativity, cunning and foresight have helped many a company to gain a leg up in their respective market. Denning believes that to fully understand how to create a strategic vision for an organization, one should understand the difference between strategic agility and operational agility.
- Operational agility – making existing products better, cheaper, etc. for existing customers
- Strategic agility – creating new markets with entirely new products to reach new customers
Take the mobile phone, for example. In the early-mid 2000s, existing phone companies were focused on making better telephones whereas Apple created an entirely new market by developing the smartphone, which appealed to many more companies across various communications markets.
Denning also remarks on the importance of resilience and the ability of organizations to rapidly adapt to unexpected market shifts. The resilience revolution takes root in management teams, he says, and centers around the ideas the employees should be working smarter, not harder. Organizations stand to benefit from encouraging adaptability in their employees rather than measuring work output because an organization can quickly and intelligently adapt to change that leads to its success more so than the quantity of work being produced.
This idea also speaks to the belief that innovation does not happen as a product of a lone wolf creative employee. Instead, business experts believe that innovation comes more fully from a group of talented individuals. The Harvard Business Review even mentions collective creativity, which alludes to the importance of creative individuals working together at every level of an organization, technical, artistic or otherwise, to create solutions to big problems.
Steps to Create a Strategic Market Vision
Part of incorporating strategic agility and innovation into your workflow involves formulating a strategic market vision. During this process, your organization works towards cultivating success by disrupting itself. What this entails is the intentional disruption of company goals to respond to market changes in a way that propels the company forward to be a leader in its market. Take T-Mobile, for example. The mobile phone service had to halt the way that they were doing business to keep up with the rising demand for smartphones. T-Mobile changed their business model and marketing models to attract new customers with completely new services and products. Not only did this save T-Mobile, but it also launched them forward to become a leading cellular service provider. A more niche example comes from HP Inc innovating the 3D printing world by dedicating efforts to the same technology except with smaller footprints and lower costs. From here, HP was able to disrupt themselves again by gearing up for a completely efficient and energy-friendly metal 3D printer instead of plastic. True agility in a strategic market vision means being able to not only react to change but to effect change in the marketplace as well.
Having a strategic market vision can be broken down into the 3 As of Agility:
- Anticipate – anticipate that change is expected and can be managed properly
- Adapt – adapt to changes and use a collaborative spirit in the workplace
- Act – identify areas where change is needed and restructure when necessary
Furthermore, prioritizing innovative efforts in your organization’s strategic market vision will help your ideas skyrocket to success. Skilled innovator Doug Hall mentions several tools to strategize with innovation in one of his books. He breaks down five fundamentals to make systematic innovation part of a strategic market vision:
- Blue Cards – using Blue Cards (an organizational tool to lay out business plans) to create teams, lay out the basics about how your vision led you to your current point, your strategic mission, barriers, constraints and areas for long-term exploration
- Customer problem – identify the customer problem, customer promise, product/service and what makes you unique
- Meaningfully unique framework – people pay more for something that prompts them to wonder, think and explore
- Diversity – diversity helps to cultivate success
- Process – come up with ideas and track those ideas through every single stage of development they encounter. Clarify the idea with careful tracking of its process/progress
How to Beat Competitors with Strategic Agility and Systematic Innovation
The phrase competitive advantage refers to an organization that has goods or services which are superior to any other possible choices the customer has. Part of developing a competitive advantage is to create a competitive strategy.
- Identify needs – identify who your customers are and what they need that the market isn’t currently providing to them
- Gathering information – improve the quality of products/services you provide to your customers by gathering measurable data about your customers (age, income, the reason for shopping, opinion towards your company, etc.)
- Competitive strategy – create a competitive advantage in gaining new customers by aiming for customer and market value creation
- Continuous improvement – monitor and maintain quality by accepting guidance and focusing on long-term productivity and success. Create and follow standards
- Environmental screening – be aware of potential external environmental factors that could affect your business negatively. Look into macro and micro influences that arise either from within or outside of your organization that could negatively affect your business
How to Apply Strategic Agility and Systematic Innovation in Your Organization
It is important to understand some of the most useful ways of applying strategic agility and systematic innovation in your organization before moving forward. Strategic agility and systematic innovation are both incredibly useful tools, but they require in-depth planning that requires time and attention. Here are a few tips to use both tools in your own company:
- Market-creating innovations that create financial gains and new jobs
- Grow your company out of operational agility to move to a place of strategic agility
- Create a playbook for market-creating value propositions with 4 key points:
- Identify market need – think about customer outcomes instead of company outputs
- Clarify your approach to problem-solving – creating a working hypothesis for your business model
- Benefits per cost – how much of a difference can your product/service make for both your company and your customers?
- Identify the competition – consider any and all alternatives to customers using your product
If you feel as if your company tends to be lagging behind the competition or is always just one step short of functioning at peak innovation, do not wait until your organization begins to suffer. Take the initiative to look more into how you can incorporate strategic agility and systematic innovation into your business practices. These are complicated concepts and reading about them online can provide an excellent introduction, but you won’t learn everything you need from a quick rundown of these necessary business ideas. KnowledgeCity offers an online course called “Strategic Agility and Systematic Innovation” that will walk you through both concepts in great depth. Each concept is explored for what it is, and then both concepts are brought together to discuss competitive strategy and the journey of creating detailed market visions for your company.