6 Essential Steps to Implement Agile Strategy in Your Organization

6 Essential Steps to Implement Agile Strategy in Your Organization

In today’s environment, “resilience” is a must. In an ever-changing landscape, organizations must embed agility into their strategic execution processes to navigate uncertainty. Rather than reacting to every change, businesses should proactively prepare to alter priorities and accelerate their pace to outperform competitors. This is the essence of agile strategy. Today, I will continue to share how to implement agile strategy and provide case studies on the implementation of agile strategy.

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01 – The Six Steps of Agile Strategy

In traditional environments, leaders attempt strategic planning using tools such as the balanced scorecard, strategic maps, SWOT analysis, Porter’s Five Forces model, Porter’s value chain, stakeholder analysis, PEST analysis, and others.

The weakness of these tools lies in their reliance on top-down analysis and forecasting, often taking three to five years to develop. The resulting plans are rigidly connected and built upon assumptions about what might happen in the market.

However, in today’s rapidly changing market environment, the flaws in these assumptions often become evident.

Agile strategy, on the other hand, is different. Its implementation process is shorter and more agile. We break down the implementation process of agile strategy into six steps:

It’s important to note that these steps do not represent a sequential, one-time process. Instead, participants will continuously revisit previous steps as the subsequent steps help them gain a better understanding of the prior ones.

Step 1: Visualize Strategic Intent (1-2 days)

Strategic intent sets the direction for this process.

An important distinction from traditional strategic planning in this step is recognizing that an organization’s strategic intent is merely a planned change theory. Like any theory, it can only be validated through execution. To test our current theory of strategic intent, we need to act in accordance with it and collect evidence in the process, so we can move forward in the same direction, adjust our next set of actions, or refine our theory, which means adjusting our strategy.

Establishing strategic intent consists of four parts:

  1. Define the True North of the organization. This is its vision and ultimate goal. Starting from the ultimate goal, we can work backward—backtracing from the ultimate goal to reveal the steps to achieve it—rather than predicting, to determine what needs to be done first.
  2. Identify the problems. Determine the current constraints or other obstacles that prevent the organization from reaching True North. (These need to be reevaluated at the beginning of each 90-day cycle.)
  3. Identify opportunities. Seize internal and external opportunities (customers, partners, etc.) that can be leveraged to achieve the True North goal. (These also need to be reevaluated at the beginning of each 90-day cycle.)
  4. Determine customer impact. Answer the question: If the organization addresses the problems or exploits the identified opportunities, who will care, in what way, and how can they benefit from it?

Step 2: Potential Solutions

The second step is to explore potential solutions. We use the term “potential” because an organization can never be entirely certain whether the proposed solutions are effective or complete before they start implementing.

Therefore, delivering the proposed solutions to customers—collaborating with all necessary individuals within the organization and partner organizations—is not the final outcome of the agile planning process. Instead, it represents the experimental part of the feedback loop, providing information for future iterations of the solutions.

In this step, planners should look at each customer impact identified in Step 1 and break down what is needed to achieve that impact.

It’s also essential to establish the organization’s and its partners’ high-level objectives to achieve the customer impact—business outcomes.

For each business outcome, determine the business capabilities required to achieve that objective and identify the assets needed to support these capabilities.

Many organizations often fail to include all these types of assets in their discussions of solutions, with a common default focus on technical assets. This oversight is one of the major reasons for the failure of large projects.

Step 3: Enable the Business Ecosystem (1-2 days)

In most cases, organizations do not possess all the capabilities and assets needed to achieve all the business outcomes. Especially in today’s dynamic and interconnected world, leveraging partnerships is key to the success of many organizations.

Therefore, the third step focuses on the business ecosystem necessary for the organization to achieve its strategic intent.

In this step, you explore which business capabilities and related assets should be handled internally and which can be better achieved by partners within a larger business ecosystem. In some cases, a business capability and its related assets may be provided entirely internally or entirely by partners. However, in many cases, the situation may be more complex, with a combination of both scenarios for a single business capability.

Steps one to three are usually completed within three to five days. As leaders and their teams progress through each step, they may find the need to adjust their ideas from previous steps, which is normal.

Step 4: Prioritization and Organizing the Work

Understanding the difference between prioritization and sequencing is essential. Prioritization sets an order of activities in a top-down fashion, while sequencing arranges activities logically based on dependencies and shared conditions.

In the second week, the focus shifts to sequencing the work to be done in the next nine weeks (weeks 3-11 of the 90-day cycle). Teams identify what needs to be done—their backlog—in what order, and how to incrementally build the required business capabilities and assets.

Step 5: Continuous Value Creation (Weeks 3 to 11)

During Step 5, which covers most of the 90-day cycle, teams actually work on the plans and backlog defined in Step 4. However, first, each team must develop a more detailed version of their backlog for the upcoming weeks. This typically requires the first few days of Week 3.

Assuming teams are using agile or lean execution methods like Scrum, SAFe, LeSS, Scrum@Scale, Kanban, DAD, etc., the level of detail in each backlog item should only look as far ahead as the team’s iteration rhythm, whether it’s one, two, or four weeks. We recommend that teams align to the shortest rhythm they can reasonably accommodate.

We refer to this step as continuous value creation because the goal of any organization aiming for adaptability and agility is to deliver value early and often, ideally multiple times a day if possible, including daily, much like pioneering companies such as Google and Shopify.

Leaders’ behavior is crucial during this process, and their role should be one of empowerment rather than top-down management. For them, the focus should be on leaving detailed decisions about what, how, and when to their teams. Their most significant contributions during weeks 3-15 will involve empathy for teams as they master these new ways of working and helping teams remove obstacles or respond to impediments as they arise.

Step 6: Review

Step 6 is about reviewing and summarizing.

Collect collective insights from everyone involved in the work so far. This includes posing a series of exploratory questions, including but not limited to:

  • What’s working?
  • What’s not working?
  • What have we learned?
  • What insights have we gained?
  • Which parts of our strategy are no longer effective/relevant?
  • Are our problem statements still valid?
  • What external changes/conditions are coming into play that were not present before?

While steps one through five are about clearly defined actions, step six is about using evidence and collective insights to adjust what we do next, rather than simply following the strategy as originally built.

Finally, it’s about repeating the process. After the first 90-day cycle, we iterate this process, continuously cycling through these steps to maintain organizational health and agility. However, the time allocated to each step may vary.

When an organization deems no need for strategic adjustment, Step 5—Implementation/Experimentation—will take up approximately 95% of the next 90-day cycle’s time. Nevertheless, abbreviated versions of steps one to four and step six in each cycle are still crucial for making necessary adjustments based on evidence and insights collected from the previous cycle.

02 – Considerations for Implementing Agile Strategy

Implementing an agile strategy requires alignment within the organization, including its structure, leadership, culture, and more. In general, the following points should be considered when implementing an agile strategy:

  1. People-Centric: Organizations, markets, and ecosystems are all composed of people. Everything an organization does must take into consideration relevant stakeholders, including employees, executives, customers/clients, partners, and others.
  2. Clear Objectives and Evidence-Driven: Everything an organization does must also be tied to achieving specific consumer impacts and/or business outcomes. Evidence collected during the current cycle is used to make adjustments/decisions for the next 90-day cycle.
  3. Alignment of Systems and People: Establish cross-functional teams for executing the strategy, create project roadmaps with timelines and milestones, foster collaboration between teams to improve transparency and accountability, develop collaborative and cross-functional approaches to problem-solving, and more.
  4. Culture: Cultivate a culture that promotes experimentation and creativity. Encourage employees to try new things and seize opportunities. Foster continuous learning and development, ensuring that employees acquire the skills and knowledge needed to adapt to change.
  5. Organizational Structure: Have a flexible and adaptable organizational structure that allows teams to be quickly formed and disbanded as needed to meet evolving demands.
  6. Leadership Enhancement: Leaders play a pivotal role in executing an agile strategy. Implementing agile strategies requires leaders to possess agile leadership qualities, such as planning more frequently and proactively, with many agile leaders revising plans continuously or even monthly. They support rapid adaptation to change. They also apply lean and agile practices more broadly, with many leaders driving company-wide agile transformations to simplify strategy execution and achieve faster, higher-quality results. Leveraging technology for decision support is essential; leaders can access real-time, accurate data and analytics, which are critical for making complex decisions and adjustments.

03 – Agile Strategy Case Study

Company A wanted to implement an agile strategy and ultimately decided to engage with consulting firm B for assistance.

When B assessed and diagnosed the organization, they found that the organization had recently completed a series of acquisitions, which had led to revenue growth of $250 million. The assessment identified short-term and long-term opportunities for additional strategic acquisitions, as well as the necessity to invest in the organization itself to achieve further growth.

Company A had never engaged in strategic planning or developed a strategic plan. Furthermore, they hadn’t invested in leadership development, and there was no common leadership language within the organization.

After the assessment, the consulting advisors began collaborating with the leadership team to create a comprehensive strategy. Through the coordination of the strategy and the leadership team, they jointly developed the structure, support, and external perspective needed for a three-year viable strategy. A crucial part of the process and results was the team’s coordinated alignment.

The consulting advisors believed that an agile strategy could help the organization achieve and maintain coordinated, collaborative, and clear results, aiding the leadership team in building trust.

Company B facilitated the process of the leadership team jointly creating a strategic business framework, coached the formulation of agile strategy goals and measures, and referred to the team as the Business Acceleration Team.

While changing how employees worked and developing new leadership capabilities, the Business Acceleration Team addressed the organization’s most critical challenges and formulated some long-term strategies, including investments in leadership development and talent to support and accelerate growth.

To ensure successful execution, a part of this process involved engaging the leadership team throughout the organization via cascading strategies and implementation plans.

After several years of development, Company A has evolved into a fully integrated corporation with revenues exceeding $800 million and more than 3,000 employees. The organization’s ability to achieve this growth was attributed to its commitment to strategic transformation and investment in organizational capabilities.

Agile strategy is a highly innovative and effective approach that can often help organizations achieve their objectives in a rapidly evolving business environment. Agile strategy emphasizes collaboration, flexibility, and continuous improvement, making it highly valuable for individuals and teams looking to enhance their processes and business outcomes.

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