AGILE STRATEGY AND PLANNING: BUILDING A CUSTOMER-CENTRIC COMPANY
- November 7, 2022
- Posted by: mealone
- Category: Uncategorized
AGILE STRATEGY AND PLANNING: BUILDING A CUSTOMER-CENTRIC COMPANY
Many strategies do not necessitate making choices from alternatives. For example, claiming that you use a customer-centric approach isn’t a clear choice about what to accomplish. You can describe the opposite without seeming stupid when you’ve made a meaningful strategic choice. Non-choice techniques (and missions) promote confusion, deception, and disinterest, but not speed. If creating an effective strategy is about making choices, then an agile business strategy is about signal vs noise and framing decisions via three contexts.
Consumer: We must emphasize consumer behaviour trends and customer demands. This action helps us distinguish between a fad and a trend (a more fundamental underlying shift). Technology fads and behaviour trends may exist. Trends address more basic, long-term client requirements and behaviours than fads. PrioritizationPrioritization and an understanding of change importance are crucial. A corporation close to the client is primarily outward-facing, open to trying new things, and networked to build the most effective strategy in today’s market.
Competitors: We must decide where we should play in the market. Companies should choose to lead rather than compulsively follow and benchmark against competitors. The goal should be to be more aspirational about who we consider competitors and where to learn from.
Company: We must grasp the potential and use of new technologies to produce value. We must be skilled at knowledge flow, fast experimentation, and iterative working to inform strategic direction choices.
If building strategy becomes an exercise in agglomerating activities and assigning tasks without a cohesive set of choices to bind them, we would be making huge mistakes. We will create a strategy that would be ineffective for today’s unpredictable, fast-changing business environment. Neither is inadequate strategy communication, poor relationship with tactics and execution, or confusing a set of goals or targets with a strategy. Strategies aren’t goals, but they help us achieve our achieve goals.
A strategy is a cohesive combination of analyses, arguments, and actions to address a situation. An intelligent strategy considers numerous viable paths of action and picks one/some above others.
Good strategy comprises diagnosis, the formulation of a guiding policy, and a clear set of activities or direction, according to Richard Rummelt in “Good Strategy, Bad Strategy.” Agile businesses are strong at analysis, synthesis, and creativity aimed at mastering all three of these elements.
Deliberately Creating or Choosing Your Strategy:
True agility requires an organizational plan that balances the fixed and purposeful with the flexible and developing.
Professor Clay Christensen says strategy is ‘not a single analytical event’ Instead, it’s a ‘continuous, diversified, disorderly process’ The art of managing this is to find better possibilities and use resources flexibly to support them. Rigid planning procedures (especially in big companies, where criticizing a fixed plan may be political and morale-killing) reduce the flexibility needed to adjust to quickly changing situations. Christensen cites Honda’s entry into North America to highlight adaptability. The company’s approach focused on huge motorcycles (US consumers favoured them), which directly conflicted with Harley. Some Honda employees used the smaller Supercub versions for weekend dirt riding in the LA hills. A Sears buyer saw the excitement and decided to put them in the outdoor equipment section, creating a new opportunity for Honda, an innovative distribution method, and a new genre of bicycling. Honda refocused their approach on the Supercub, which became the world’s best-selling two-wheeler after breaking into the North American market. Our current corporate environment’s significant volatility and ambiguity are relevant to this sort of fluidity.
Image-sharing website Flickr was created from tools for the online game Game Neverending. Ludicorp cancelled the game to focus on developing Flickr. Pinterest began as a mobile shopping app called Tote, which was ahead of its time and laid the foundation for the service we know today. Twitter grew out of Odeo, a podcast company. Android originated as a digital camera operating system. Professor Amar Bhidé found that 93% of successful companies abandoned their original strategy. However, even when they stumble, companies that survive maintain a high level of strategic adaptation and improvisation.
Vision Versus Iteration: Where Should the Balance Lie?
Leaders of Agile businesses should aim for stubborn firmness when it concerns their vision and flexibility concerning the details of attaining the vision. This focus is the heart of the Agile approach to strategy described here. A balance between a strong, directed vision and adaptive, iterative planning that adapts to changing settings and new knowledge is vital. Undirected iteration is chaotic. The vision should be challenging, clear, and captivating but also guide strategic decisions and decision-making.
Change doesn’t come from a CEO’s impressive PowerPoint deck. It comes from repeating the vision and communicating goals and progress. It arises from leaders’ and others’ actions and judgments and how they communicate to reinforce the ideals the company should live up to. More importantly, it comes from how we identify and reinforce behaviours that serve the organization’s objectives through rewards and other means for motivation. Finally, it comes from how we learn and structure every communication. Every meeting, update, and communication is a chance to reinforce the change’s objectives. Inflexible planning leads to decreased performance, missed opportunities, and restricted learning. Continuous iteration generates fundamental transformation.
Flexibility gives autonomy and plasticity to the organization, enabling it to adapt planning in ways that facilitate the learning and continuous development that drives lasting change. Every sprint, lessons learned, and knowledge translated into action helps bring the goal to life.
The agile company knows what’s permanent and changeable and the difference between a strategy and a plan. Strategy should be flexible and open to multiple success paths. Therefore, each rate of change of each strategy element is crucial.
- Mission and purpose are established and not easily changeable
- Vision: should be compelling, drive the mission and be fixed.
- Strategy: defined by choices, changes slowly to adjust to altering situations and new knowledge.
- Plans or strategies are flexible, iterative, and adaptable to feedback, learning, and further information.
Agility and adaptability should rise as execution draws closer. Still, strategy and governance should be flexible enough to allow response throughout the business in the light of changes or new information. Leaders must set expectations, develop governance that removes impediments to growth, and provide teams with needed skills and resources. They should never be the sources of barriers to learning and development.
Building a Your Business Around the Customer
The client guides the agile company’s goal, vision, strategy, operational priorities, tactics, and execution. Every firm says they put the client first but prioritize what’s simpler and more efficient for them rather than what’s best for the consumer. Businesses are sometimes arranged in ways that confuse customers (ever had a customer care agent transfer you to another department because they can’t help you?). Business efficiency is prioritized over customer happiness in resource allocation. Too much time spent on responding to the customer is spent dealing with failures for things the company did not perform correctly, rather than helping to produce more excellent value (value demand). Lousy customer service results from poor automation, scripts, or rigid rules and processes. Many companies hide contact information on their websites or charge clients to call. Too many customer experiences aren’t connected, causing duplication of effort and wasted opportunities to improve customer experience.
Thankfully, digital-native approaches like agile and lean are customer-centric, involving the consumer throughout the development of the processes, systems and products that serve them. Real customer-centricity spans process, strategy, culture, metrics, and structure.
An excellent example of a customer-centric company would be Amazon. They always take the long-term view when it concerns growth and development, driven by learning and innovation. This approach is strongly emphasized in the mission statement of the company. “To be the most customer-centric company on earth”. They also distinctly identified their stakeholders: customers, suppliers, enterprises and the generators of content.
This approach not only simplifies the operation of Amazon’s model but also puts clarity of purpose and focus into everything they do. Bezos feels that Amazon is customer focused rather than competitor-focused. If one considers what he pays attention to, they’ll agree. According to specific sources, Bezos used to bring empty chairs into meetings as “representatives” of the customer. Bezos’s approach forces the stakeholders and decision-makers to consider the impact of their decisions on the most critical stakeholders in the business. Bezos also led by example when it came to engaging the customer. He spends time in call centres to teach the culture of listening intently to customers to understand them better. His managers received his message.
Another aspect that must align with this aim to understand and please customers is using measures and metrics. Management is impossible without measurements. Amazon performs well in this regard. In Amazon, Performance is measured using 500 objectives; of these, about 80 percent are customer-related goals. If the employees succeed on the job, they must be fulfiling these metrics chosen to delight and satisfy the customer.
Amazon’s algorithms are built to personalize content for hundreds of millions of users and pick out the slightest delays in the loading of the web page. A 0.1 percent delay in web-page activities can slow down customer activity by 1 percent resulting in a drop in Amazon’s revenues. The company CEO relentlessly fights the war on waste and inefficiency.
Amazon’s approach is firm and commendable to organizing a business around the customer. The customer sees it, and they feel it. When the customer responds loyally from his wallet or card, the organization also feels it.
Organizations make strategic choices to be able to accomplish their set objectives. There are three broad contexts to consider when developing strategy: the consumer, competitor and company context. Strategy is about focus, and selecting between options. Some elements of a strategy should be fixed, and other more detailed elements should be flexible and adaptable to the environment. The need for this balance between rigidity and flexibility is much more pronounced in the agile environment. While the organization must be firm on its vision, purpose and its direction, it must be flexible about the details of how it accomplishes these ends.