1.Strategic Agility-a new competitive requirement for Public Sector?November 27, 2008 Mikko KosonenPresident Sitra, Finnish Innovation Fund

2. Key Dimensions of Strategic Agility Strategic Sensitivity: Seeing and framing opportunities and threats in a fresh way as they emergeResource Fluidity:Fast and efficient resource mobilization,redeploymentLeadership Unity:Collective decision makingand commitment 3. Why Strategic Agility Now?Why so hard ?Fast Entrepreneurship Strategic AgilitySpeedof ChangeFocus onStrategicOperational PlanningExcellenceSlowSimple/ NatureComplex/Linearof Change Systemic 4. The Curse of SuccessStrategic Agility easily Turns into Strategic Paralysis Over Time Strategic Sensitivity Tunnel Vision Tyranny of the core activity Strategic Myopia Dominance mindset Snap judgment and intellectual laziness Management divergenceResource Fluidity Heady charm of fame and power Expert management Emotional apathy Imprisoned resources Business system rigidity Ties that bind Management mediocrity and competence trapsLeadershipUnity 5. Single-minded attention to high efficiency leads toDriverConsequence Toxic side-effectStrong unitsCore managersResource imprisonment with sufficient autonomy sitting on their resources as they growHighly efficientIncreasingly differentiated Activity system systems and processesand specialized (fit for purpose) rigidification activity systemsDeep collaborativeCustomer & partner lockTies that Bind relationships with key in and decreasing strategic partnersfreedomLearning by doing and Forgiven and hidden Management mediocrity building on experience misbehavior andand competenceshortcomings gaps 6. Single-minded attention to quick decisions leads to Driver Consequence Toxic side-effectClear charters for allDeclining intensity ofManagement organizational units dialogue and decreasingdivergenceneed for collectivecommitmentsStrong leaders with Inflated egos, overly boldHeady charm of fame and proven track-recordcommitments, implicit powerpecking orderPreference for fast Decisions elevating to theExpert decision makingtop team; decisions made managementby the same leadersSuccessful leaders Tired hero syndrome;Emotional apathyfuture opportunitieslooking less thrilling thanpast experiences 7. Single-minded attention to clear direction and focus leads to Driver Consequence Toxic side-effectClear vision for the future of our Considering everything outside Tunnel visioncore missionthe core as non-relevantSustained effort at maximallyFraming everything in the light ofTyranny of the coreleveraging our core mission the core mission activityTight focus on continuousShort term internal orientationStrategic myopiaimprovementLeadership position in Reluctance to open Dominance mindset everything we docollaboration and experimentationHigh action orientationAction hero syndrome, Snap judgment and and self-confidence no time and interest forintellectual laziness alternatives 8. Strategic Agility imperativeMost organizations die not because they do the wrong things,but because they keep doing what used to be the right thingsfor too long 9. When is Strategic Agility most needed? StrategicAgilityGrowth Strategic Rigidity Operational Excellence EntrepreneurialInsight and Flexibility Time04-04-06 10. Key Capabilities enabling Strategic Agility Strategic Sensitivity Open Strategy Process Heightened Strategic Alertness High Quality Internal Dialogue Cabinet responsibility Top team collaboration Leadership style and Resource Fluidity capabilities of the CEO Fluid re-allocation and utilization of capital resources Mobility of people and knowledge Modular structuresLeadershipUnity 11. Drivers of Strategic SensitivityCo-strategizing withmultiple stakeholdersOpen Strategy processExperimentationStretched andContradictory goalsHeightenedSTRATEGICStrategic Alertness SENSITIVITYOpen business definition Factual and conceptual richness High Quality Cognitive diversityInternal Dialogue 12. Drivers of Leadership UnityShared agenda & incentivesCabinet responsibility Mutual dependencyEmbracing conflict +dialogue LEADERSHIP Top team collaboration UNITY Institutionalizedtop team renewalCEO First among peersLeadership style andCapability to play capabilities of the CEO multiple roles 13. Embracing Conflict and Dialogue Conflict Consensus ++ DialogueDebate From genuine visible From soft personal dissent personal disagreementtotoCollective agreementPublic agreement,private dissentEnergized actionPassive sabotage 14. Drivers of Leadership UnityShared agenda & incentivesCabinet responsibility Mutual dependencyEmbracing conflict +dialogue LEADERSHIP Top team collaboration UNITY Institutionalizedtop team renewalCEO First among peersLeadership style andCapability to play capabilities of the CEO multiple roles 15. Drivers of Resource Fluidity Dissociating resultsfrom resource ownership Fluid Re-allocation and Utilizationof Capital ResourcesAssumption basedplanning/resourceallocation process Institutionalizedjob rotation Mobility of People andRESOURCEKnowledge Sharing FLUIDITYValues and managementsystem emphasizing knowledge sharingPlug and Play modular Modular structures structures 16. Dissociating business results from resource ownership case Nokia Business GroupsMobile Multimedia Enterprise NetworksCustomer andPhonesSolutionsMarket OperationsHorizontal GroupsTechnologyPlatformsBrand and designDeveloper supportResearch and venturingBusiness infrastructureCorporate Functions 17. Drivers of Resource Fluidity Dissociating resultsfrom resource ownership Fluid Re-allocation and Utilizationof Capital ResourcesAssumption basedplanning/resourceallocation process Institutionalizedjob rotation Mobility of People andRESOURCEKnowledge Sharing FLUIDITYValues and managementsystem emphasizing knowledge sharingPlug and Play modular Modular structures structures 18. Plug and Play modular structures -in Nokia Rapidlychanging Market opportunities markets FITBusiness system 1 Reconfigurable Business system 2business systemsBusiness system 3Combining FITEconomies of Process A Process Bscale and Process C ModularFlexibility business ProcessesinfrastructureApps & DataIT Platforms 19. Key Capabilities enabling Strategic Agility Strategic Sensitivity Open Strategy Process Heightened Strategic Alertness High Quality Internal Dialogue Cabinet responsibility Top team collaboration Leadership style and Resource Fluidity capabilities of the CEO Fluid re-allocation and utilization of capital resources Mobility of people and knowledge Modular structuresLeadershipUnity 20. Where is Finland and its Public Sector on this curve?Strategic AgilityGrowthStrategicRigidityOperationalExcellenceEntrepreneurial Insight and FlexibilityTime 04-04-06 21. How Strategically Agile or Paralyzed - are You? NotRelevant Highly TOXIC SIDE-EFFECTS OF FAST GROWTH AND HIGH PERFORMANCE STRATEGIC ACUITYSourceConsequence1 2 3 4 5 6 7DISTROYERS OF Strategic myopia - Caused by tight focus on core - Considering everything outside the business trajectory core as non-relevant - Caused by tight focus on- Internal short term orientation Tunnel visionincremental improvements and consistency - Framing everything in the light of - Caused by performance pressures core business; committing Tyranny of coreand familiarity to core businessbusiness resources through core businesses - Caused by over-reliance on own- Reluctance to open collaboration Dominance mindset experience & implicit assumptions and experimentationRESOURCE FLUIDITY DISTROYERS OF Imprisoned resources - Caused by continuous resource - Core business managers wanting constraints and growing doubtsto own their resources, lack of about corporate-level resourcetransparency allocation - Caused by increasingly tight fit- Highly differentiated & specialized Business system rigiditybetween activities activity systems - Caused by product compatibility - Decreased strategic freedom Ties that bind needs and customer partner commitments - Forgiven & hidden shortcomings, Management mediocrity- Caused by hasty recruitment and partly wrong competence profileand competence gapsinsufficient people developmentLEADERSHIP UNITY Management divergence- Caused by naturally increasing- Declining intensity of dialogue, DISTROYERS OF subunit advocacy and decreasing stalemates, and polictics need for collective decisions Heady charm of fame- Action Hero Syndrom, implicitand power- Caused by the inflated egos and pecking order, risk aversion or Expert managementhubris of the key leaders overly bold commitments - Caused by action orientation and- Decisions elevating to the top team perceived time pressure where they are done quickly based Emotional apathy on individual expertise - Caused by future opportunities Yves Doz and Mikko Kosonen, 2006 looking less thrilling than past- Tired Hero Syndrom 22. More National level Strategic Agility needed! Strategic sensitivity Seeing and framing opportunities in a fresh way as they emergeCollective decision making andWell-coordinated foresight activitycommitmentSystematic cross-sectoral strategy process to Mutual dependency via sharedfeed in Government Programtargets & agenda (based ongovernment program)Enhancing cross-sectoral dialogue via Resource Fluidityrotation & executive education Fast and efficient resource allocation & redeployment Dissociate results from resource ownershipLeadership Unitycross-sectoral programs as the mainvehicle for change Modular process and IT-systems based on open architectures 22 23. Strategic Agility requires increasing integration-without loosing speed and differentiation!Value from Value fromAutonomy IntegrationPerformanceDanger ZoneSingle business Portfolio of companyBusinesses 24. Cornerstones of Finlands Innovation StrategyWORLD WITHOUTBORDERS INNOVATIVEHUMAN/INDIVIDUALS INNOVATIONEND USERAND COMMUNITIESPROCESS CENTRICSYSTEMICAPPROACH24 25. Thank You!