Strategic Agility: Lessons From Modern Military and Hedge Funds
Agility is a complex concept.
To simplify, it is often framed as a linear process and presented with examples of cause-effect episodes: an opportunity is identified, and you must be agile to seize it. A risk arises, and you need to be agile to hedge. Something breaks, and you need to fix it fast. This linear representation of agility is accurate but somewhat commoditized and therefore doesn’t offer an edge if a company competes at the top.
Competing among the best requires more than isolated linear reactions. It requires strategic agility, which is about how fast and effectively an organization can institutionalize these four holistic competencies:
Synchronizes with its context
Synthesizes new views based on new facts and failures
Steers direction of execution
Shapes itself into a new version
One good epitome of strategic agility is the modern military and the variants of its C4ISR concept, which manifested its power during the Russia-Ukraine war. The hint is that modern enterprise IT has lessons to learn from the modern military information architecture. Similarly, the successful hedge funds all exemplify strategic agility. To illustrate, Ken Griffin, the founder of Citadel, describes their secret of success here in less than 60 seconds. In a nutshell, Citadel’s secret is decentralization, co-located cellular teams, and keeping decision-making within what I call “The Reality Inc.”
Meanwhile, the antithesis of strategic agility is rampant. Such an enterprise only syncs itself once a year at an executive retreat. During this meeting, the past and present of the organization are discussed in detail, but little or no attention is given to the future and outside. The worldview and execution are layered, functional, and linear. This type of organization denies or ignores new facts, believes that the current path is the only path, and stays solidified in an echo chamber of conformist gestures. But the innovative verbiage is lavish, and the commitment to change is sound.
The above contrast shows the potential for both technology vendors and technology customers. However, to make the necessary leap, we should ponder why, despite the tremendous technological progress of the last two decades, the executive wisdom and leadership style still need to adapt and envision new ways of wielding technology.
© Saip Eren Yilmaz, 2023
