Strategic agility is a new hot topic in business magazines that closely resembles the concept of digital transformation – everyone has heard of it, but everyone defines it differently. In short, strategic agility is the ability of an organization to adapt to changes in its environment. Very intuitive and extremely useful, it could be said to be taken for granted. But why has it only started to be discussed in recent years? Precisely because of the aforementioned digital transformation, which, along with other similar concepts such as innovation, disruption, or digitization, creates a business climate that is diametrically opposed to traditional business practices. Indeed, all these terms share a common goal of fostering change. Something that does not go hand in hand with the traditional approach in the sphere: 'Focus on what you do best, build walls to protect yourself from competition, and gradually expand into complementary niches.'
Disruption is Coming
Such an approach no longer creates market leaders, and existing ones are left vulnerable on fronts they do not even know exist. A widely known example is how Uber disrupted the well-established taxi industry or how Amazon is dismantling retail giants, but did you know that the same Amazon is on the verge of entering the pharmaceutical and banking sectors? Although it sounds incredible when we think about how protected these sectors are, both financially and legislatively, the fact is that Amazon will significantly disrupt them in the coming years. The best part is that the entire race for Amazon will be relatively painless. Just as bookstores were once convinced that customers preferred to physically browse a book before purchasing, many banks are unfortunately still focused on providing the best customer experience – in person. Of course, there are exceptions in the banking sector, such as online-only banks, but the largest players in this race have a pretty clear Achilles’ heel, which is precisely the lack of strategic agility. It could also be said that they lack agility in general, because even if they recognize the threat, their systems are often too slow to seriously address it.
Strategic Agility in Practice
The aforementioned is an excellent example of strategic agility in practice. Namely, customer experience is one of the foundations of today’s business and makes the difference between the best product with a key in the lock and a relatively poor product in a market leader position. In any case, it is useful to focus on customer experience. What distinguishes the strategically agile from the less agile banks in this focus is the fact that the latter group boasts premium services such as personal bankers or skipping queues in branches in 2021. Services that are a natural continuation of the development of their portfolios, arising from a logical thought process: “We opened many branches to be close to everyone and beautifully decorated them. Despite this, they often have crowds and people are dissatisfied. They would surely be happier if they could skip the crowd and feel privileged talking to their personal banker.” So what is the problem? Precisely in the fact that this thought process is logical and extremely accurate, but such correct thinking will lead managers to headlines in the coming years, while their banks face ruin.
