Informed i’s Weekly Business Insights
Extractive summaries and key takeaways from the articles carefully curated from TOP TEN BUSINESS MAGAZINES to promote informed business decision-making | Since 2017 | Week 375, November 15-21, 2024 | Archive
How to Avoid the Agility Trap
By Jianwen Liao and Feng Zhu | Harvard Business Review Magazine | November–December 2024 Issue
3 key takeaways from the article
- Agility—the ability to quickly react to rapid change—is all the rage in strategy circles these days. Its popularity is rooted in the belief that organizations must constantly respond to technological advances, new market dynamics, shifting consumer preferences, and other external developments. That sounds like a sensible proposition, but in practice continual strategic adaptation is almost impossible to pull off, because the business environment is evolving so fast that firms can’t keep up. The consequences for those that try to are stark: Erosion of competitive advantages, Strategic myopia, and organizational chaos.
- Orgazniations need to focus on strategic constancy – maintain a steadfast focus on a long-term vision even as it navigates a dynamic business environment. It’s about recognizing the enduring aspects of a company’s business model—its core values, customer relationships, brand identity, and key competencies—and remaining committed to them despite external pressures. It emphasizes depth over breadth—deepening the company’s competitive advantage in its core areas rather than spreading efforts over many.
- How to use a focus on strategic constants: adopt future-back thinking, identify strategic constants, match constants to capabilities, and adapt around the constants.
(Copyright lies with the publisher)
Topics: Agility, Competitive Advantage, Competition, Agility, Sustainability
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Agility—the ability to quickly react to rapid change—is all the rage in strategy circles these days. Its popularity is rooted in the belief that organizations must constantly respond to technological advances, new market dynamics, shifting consumer preferences, and other external developments. That sounds like a sensible proposition, but in practice continual strategic adaptation is almost impossible to pull off, because the business environment is evolving so fast that firms can’t keep up. The consequences for those that try to are stark: Erosion of competitive advantages, Strategic myopia, and organizational chaos.
So what can firms do to avoid these problems? Jeff Bezos, the founder of Amazon, once made an interesting observation: “I very frequently get the question: ‘What’s going to change in the next 10 years?’… I almost never get the question: ‘What’s not going to change in the next 10 years?’ And I submit to you that that second question is actually the more important of the two—because you can build a business strategy around the things that are stable in time.”
Bezos’s philosophy underscores the importance of understanding and catering to fundamental consumer needs that are consistent over time, rather than getting caught up in the transient trends that businesses often chase. By focusing on the strategic constants, Amazon can confidently invest in infrastructure, technology, and processes that cater to unchanging customer desires, ensuring that any investment made today will continue to contribute to the company’s success for many years to come.
This is a classic example of strategic constancy, which requires a firm to maintain a steadfast focus on a long-term vision even as it navigates a dynamic business environment. It’s about recognizing the enduring aspects of a company’s business model—its core values, customer relationships, brand identity, and key competencies—and remaining committed to them despite external pressures. It emphasizes depth over breadth—deepening the company’s competitive advantage in its core areas rather than spreading efforts over many. Because it ensures continuity in an organization’s vision, it also facilitates more-reliable strategic planning and execution.
Strategic constants are few in number. Some strategic constants may seem intuitive. In contrast to strategic constants, transient factors are abundant, stemming from fluctuating and often unpredictable market trends, regulatory shifts, and technological changes. The impact of transient factors is temporary, and their low predictability creates challenges for strategic planning. Understanding these distinctions is crucial for businesses.
How to use a focus on strategic constants to build a company that consistently outperforms rivals throughout upturns and downturns: adopt future-back thinking, identify strategic constants, match constants to capabilities, and adapt around the constants.
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