Agile Digital Strategy - Why You Should Dump Your Traditional Strategic Approach Now

Andreas Braendle

The World Wide Web has been around for more than 20 years, and the internet for over 40. Still, the pace of change and innovation is not slowing down. As exciting as this constant change is, it creates uncertainty about the future environment of your organization or business.

Agile Digital Strategy - Why You Should Dump Your Traditional Strategic Approach Now

Agile Digital Strategy is a lean, fast and data-driven methodology to create a successful business strategy that overcomes these uncertainties.

If you are involved in creating a long-term digital strategy for your organization, you must agree that it is very difficult to answer questions like:

  • What new market niche or target groups will create demand for your products in five years from now?
  • How will your competitors leverage technology?
  • Are your future customers ordering your products via desktop computers, smartphones, or wearable computers, such as eye glasses or refrigerators equipped with the latest Android OS?
  • Are you going to reach out to your target audiences via Facebook or is the largest social network of today doomed to lose market dominance, as its predecessor MySpace did?
  • Is your market position endangered by disruptive product substitutes?
  • Are your suppliers going to be able to cut out the middle man and market directly to your customers?

You might have read trend reports or you just have good gut feeling about the answers to these questions, but your answers will never be more accurate than an educated guess.

Traditional strategic planning has its shortcomings

Labyrinth of uncertainty

This is why in a changing environment with ubiquitous uncertainty it is difficult to create a vision of the future and define a path to get there using traditional strategic planning methods. Traditional approaches are rather slow and usually resource heavy: highly staffed strategy teams supported by consultants invest months in research, analysis and creation of often pre-packed strategies.

The result is a slide deck that is handed over to the executive management. Sometimes it may take many more months to decide about the strategy. Then, the strategy is handed down, to be implemented. In a digital environment, this is too slow:

The world will have moved on in the meantime and most of the assumptions the strategy was originally based on will have changed. Traditional strategic planning needs to foresee three to five years into the future to be able to have an impact. This results in a scope far beyond what we know for sure, creating a vision of a future that might never happen. This is why the agile approach does not include the need for a long-term prediction.

Agile Digital Strategies adapts to change, uncertainty and speed

Traditional approaches in strategy development cannot cope with the digital challenges businesses face today. That is why we have developed our very own approach to address change on a strategic level. We call it Agile Digital Strategy.

Release early, iterate quickly[caption]

The traditional strategy process is rather linear: analyze, define and implement. The Agile process is organized in iterative loops. You define your Key Performance Indicators (KPIs) at the beginning and they will guide you as your strategic compass. From there, you create strategic assumptions and build them in short iterations. Every build is tested immediately with the target groups and monitored in real-time.

The learnings are implemented right away in the next strategy iteration. Running through one iteration loop might take as little as one week, compared to much longer traditional strategic project scopes that may take up to many months.

This strategy development process borrows heavily from software and product development methodologies. In software development, many competing concepts for agile development are well-known and applied: e.g. Minimum Viable Product, Lean Startup (by Eric Ries), ScrumRework (by Jason Fried & David Heinemeier Hansson, Founders of 37signals), and Agile Software Development. All of them are based on the same idea: How do you create a product or software for which you do not know what the required features will be in the future?

So, how does Agile outperform the traditional approach?

Agile Digital Strategy is the method that reduces the shortcomings of traditional strategic processes.

  • Agile Digital Strategy is lean. Instead of funding large projects, Agile Digital Strategy creates Minimum Viable Projects (MVPs) or business prototypes. These projects fulfill minimum requirements and are released early. The idea is to get early feedback from users or markets. MVPs will then be iterated based on the feedback of the market.
  • Agile Digital Strategy is fast. Instead of reducing the amount of iterations a strategy needs, Agile Digital Strategy reduces the time between iterations. The faster we can go through the iterations loops, the quicker we learn and the quicker we can adapt to change. So instead of trying to predict the future five years from now we create assumptions, build the project, release it, test it, and iterate the original assumption. This whole process can happen very fast, within a month or even a week.
  • Agile Digital Strategy creates start-up like innovation. When it comes to innovation, many start-ups outperform the incumbents in the market. Agility is the main reason. Startups are leaner, quicker, have shorter decision paths and can quickly adapt to change. Agile Digital Strategy adds these characteristics to every project.
  • Agile Digital Strategy is data-driven. Instead of trying to predict the future based on intuition or data extrapolation, Agile Digital Strategy uses hard facts based on statistics. Every hypothesis suggested by a strategy will be set up as an MVP and immediately tested in the markets. This creates a process of data-driven validated learning. The real-time data that comes out of these scientific experiments improves all strategic decisions. This eliminates the need for a long-term prediction for the strategy development.

This blog post is based on a snippet from our "White Papter Agile Digital Strategy Development." Download the full paper and learn how to develop Agile Digital Strategies:

Agile_Digital_Strategy_Development_Webrepublic_Strategies [en] (1.08MB)