Agility: Navigating the Unknown

Leo M. Tilman
President and CEO, Tilman & Company; Author of Agility and Financial Darwinism

Companies have always needed to practice “agility” but exactly what this meant or required has been poorly understood, according to Leo Tilman.

In his book, Agility: How to Navigate the Unknown and Seize Opportunity in a World of Disruption, co-authored with General Charles Jacoby, Tilman provides both a comprehensive definition and a workable framework for this essential competence. Tilman shared some thoughts about agility, its perennial importance, and how it can help companies navigate through the complexities caused by COVID.

Q: You define agility as an organizational capacity to detect and assess changes in the competitive landscape in real time and then take decisive action. Has agility always been essential to organizational success?

A: Achieving agility has been an enduring human aspiration because the need to creatively respond to change and navigate disruption has always been there. Now the pace of change has outpaced the ability of individuals, organizations, and institutions to adapt. It is the very nature of today’s environment that makes the need for agility so much more urgent – enormous complexity and interconnectivity, for example.

And yet, despite agility being an enduring aspiration, a cogent definition of agility has never existed. Frequent usage of agility as a buzzword – across business, government, and the military – has led to confusion, resulting in generic prescriptions, like “democratizing authority” or “flattening organizations.” The concept of agility was not differentiated from other qualities, like adaptability, flexibility or resilience. Things became additionally muddled thanks to the applications of software-inspired “agile” approaches to business.

Our goal was to address the “Big Task” facing boards and executives: to enable organizations, whether companies, investors, or armies, as well as individuals, to successfully navigate disruption and change.

Q: Is agility something organizations intentionally adopt, or do they organically gravitate toward it?

A: One aspect of confusion and lack of clarity that we encountered was the debate on whether agility is something that is inborn or whether it is something that can be acquired. It was fascinating to speak with NBA and NHL champions and ask them, “Is it in your DNA or is it something you can learn?” We got a range of answers, leaning toward the idea that it was inborn. It was the same in the corporate world, where executives would say things like “It’s either in your corporate DNA or it’s not.”

We’ve viscerally disagreed with that view. Throughout our careers, we’ve seen examples over and over again, whether in business, in government, or in warfare, where agility was deliberately cultivated even in the absence of a comprehensive definition or theory. Agility is not inborn. It’s a choice by senior leaders. And the result is survival, superior performance, and enduring relevance.

It’s something that can be easily lost, too. So, it requires constant nurturing, reinforcement, and development. It’s an organic, disciplined, determined activity.

Q: What can companies do today to benefit from this way of thinking and operating?

A: First, it’s about conceptualizing the richness, uncertainty, and complexity of the environment in which we operate. To us, the relevant risks fall into three distinct categories: 1) the pandemic and its macroeconomic fallout; 2) societal changes, and 3) geopolitics. If you systematically assess these factors along with a wide range of possible scenarios, that would exemplify an immediate application of agility to this crisis. It is bound to be more effective than “flight-or-fight “responses based on the gut feelings.

Second, you have to recognize there are true uncertainties – not just risks – that are emerging from this pandemic. You could have a profound change in customer norms and preferences. You could have an acceleration of various trends, for example, the future of work and learning that will have profound ripples across wide range of industries.

As we start seeing some of the evidence of the leading indicators of scenarios emerging, alertness, vigilance, and preparedness will help mitigate threats and capture opportunities.

Q: If leaders haven’t already been intentional about adopting this mindset and taking the actions that accompany it, how do they get started?

A: Start by comprehensively assessing the implications of today’s environment to your organization in the broadest sense. Thinking about a wide range of risks and uncertainties, ascertaining what they mean, and preparing to decisively react to both threats and opportunities is what can be done today.

There are two types of agility, and both are necessary. The first is strategic agility. That is the realm of senior leaders: detecting profound environmental changes and adjusting business models and balance sheets to that new reality. Comprehensively assess what the environment is going to look like, what customer preferences are going to look like, what global trade environments will look like. Will you maintain the same products, services, and delivery, or do you need to change them?

The second is tactical agility. Once you shape a strategy, once you reposition your entire organization to your new reality, every level of the organization has to be cohesive, with everyone understanding not just the overarching strategy but their role in delivering on strategy. How empowered do they feel? How much do they trust their leaders to innovate and take smart risks?

Q: How can people develop strategy given that we are living through a time of such enormous uncertainty, where people literally don’t know what to expect, or how to model or predict?

A: Agility is not at all about prediction. Humans are terrible at predicting. We have so much evidence that everyone from economists to political pundits can’t predict the future. Agility is about preparedness, detection, and deliberate action. There was no specific catalyst when we wrote this book. We were generally in the environment of disruption and accelerating change. But our premise was that we would be faced with all sorts of shocks going forward: macroeconomic; technological; and geopolitical.

Even though we are in a huge period of uncertainty, we can imagine a wide range of scenarios about what could happen. Even though we can’t predict the future, we can thoughtfully evaluate how exposed we are to a prolonged recession, a credit crisis, or a stagflation.

Q: How has the pandemic changed your thinking about agility?

A: It has provided an amazing case study of an environmental change that was entirely unpredictable but necessitated a significant response by governments, companies, investors, and individuals. First, there were very faint signs coming out of China and then Europe. They were either not noticed or ignored by many, which was a failure of detection. In terms of assessment and response, given the lack of preparedness, much had to occur in real time, with most actions being reactive and defensive in nature.

Companies assessed what they needed to do to make sure people were safe and could work from home. They cut costs and deferred expenditures and transactions. Only now the focus of boards and executives is switching to strategic questions of “what if” and “what next.”

We’re in the next stage, having no idea what the path of the pandemic or the economy is going to be, or how the emerging societal trends are going to play out. When the book came out last year, we were 9.5 years into the longest economic expansion in history. The level of complacency was astonishing.

We would hear from senior “this is super important” but they weren’t preparing. Now, the topic of agility is no longer abstract. The critical importance of this quality to long-term survival and success is self-evident. The question is whether senior leaders will allocate the necessary time and resources to invest in agility long-term.