Smart or Stupid Agility: Which are you?

Smart or Stupid Agility: Which are you?

By Flux7 Labs
August 6, 2020

In his book, Good to Great, Jim Collins describes an important business cycle called the doom loop, a negative cycle created by reaction without understanding. In a recent Knowledge Project podcast, he shared this about companies in the doom loop, “Here’s what’s really scary. You are going through the first three of five phases where looking in from the outside you still look healthy, but you are already sick… And you are not visibly sick where nobody can deny it anymore until stage four out of five stages. And the fifth stage is a stage you never come back from which is capitulation to irrelevance or death.”  The doom loop illustrates the importance of the OODA (observe-orient-decide-act) loop as a model for responding to shifting market situations with intelligent agility. 

OODA Loo[What makes the OODA loop work for organizations is the ability to observe what’s happening, determine which of those observations are relevant to their business or situation, decide on a course to take, and act. Yet, as Jim Collins notes, companies in the doom loop appear just as healthy from the outside as OODA loop companies, until it’s too late. Why? Because although they appear to be exercising the OODA loop, they skip two vital steps: Observe and Orient. This presents the image of agility — the trademark of a healthy organization — while making organizations in the doom loop difficult to recognize. 

Doom LoopVUCA markets can speed the doom loop. For example, leading up to the National Bureau of Economic Research declaring that the US is officially in recession, we saw several organizations enter stage four (grasping for salvation) or stage five of the doom loop. In just the past few weeks we’ve seen Hertz, JCPenney, Virgin Australia Airlines, Gold’s Gym, and more all file for bankruptcy protection. Unfortunately, these companies will likely react by cutting costs to satisfy shareholders at the sake of smart investments that would help them begin acting with understanding. And that is the crucial difference between smart and, ahem, not so smart agility: one is a reaction where the other is action fueled by observations, orientation and, as a result, smart decision making. Indeed, to reiterate, this is what makes it so difficult to discern the doom loop before stage four: agility without observation and orientation is still agile. Whereas organizations that use the OODA loop are agile with intelligence and understanding. 

Analysis ParalysisIt should be noted that there are also organizations that suffer from ‘analysis paralysis’. In these cases, the company is caught in a cycle of observation and orientation without concrete decision making or action. In these cases, you may see the organization make small, ‘band-aid’ type decisions that only prolong the larger decision that needs to be made. Yet, often, the longer the larger decision is avoided, the worse it becomes, and the greater the paralysis associated with the situation. Sears is a prime example as it slowly shutters stores, and sells brands like Craftsman as it prolongs inevitable decisions that would provide intelligent agility.

Accelerating Business Bifurcation

Juxtaposed greatly to those caught in the doom loop are organizations that effectively use the OODA loop; the current market highlights what these organizations are doing right as we see examples of groups who are able to react quickly and in alignment with their mission. Let’s take a look at two examples: 

PepsiCo quickly recognized that consumers were turning to eCommerce as a result of stay-at-home orders. To address this changing consumer behavior and a spike in demand for snacks, they launched Snacks.com and PantryShop.com — two direct-to-consumer eCommerce sites. Impressively, Pepsi’s eCommerce team was able to develop the two sites completely in-house, moving from concept to execution in less than 30 days, according to CandyIndustry.com

Seeing a community need for accelerated testing, the City of Austin, Texas launched a COVID response application. Citizens visiting AustinTexas.gov/COVID19 fill out a Public Testing Enrollment Form that asks basic questions regarding common symptoms of the virus. Based on their responses, citizens may electronically schedule a test at one of the city’s five testing locations. Once scheduled, citizens receive a QR code for check-in at the testing site and to securely obtain their test results. The application also provides helpful ‘heat map’ data, indicating which areas of the city may need additional resources — from tests to hospital beds. Using low code as a technology accelerator, the city was able to launch the application in two weeks. (Readers can learn more about the solution here.)

Role of Technology Accelerators

Looking at our examples, we can see that PepsiCo and the City of Austin used technology accelerators to execute on OODA loop inspired strategy. Rather than chasing cool new technologies to create momentum, they used technology to fuel it. The lesson: using the right technology as a tool gives organizations the agility to innovate faster, test solutions more adroitly, and get winning solutions to market more rapidly — all hallmarks of intelligent agility.

Quickly changing environments collectively test organizations. Enterprises have a choice to react without understanding or act with intelligent agility based on their observations and orientation. Shortcutting the OODA loop process merely results in reactions whereas organizations that honor every step of the OODA loop position themselves for long-term success. 

*This article originally appeared on Forbes.

To learn how your organization can apply these lessons with technology accelerators, reach out to our team today.

Written by Flux7 Labs

Flux7, an NTT DATA Company, is the only Sherpa on the DevOps journey that assesses, designs, and teaches while implementing a holistic solution for its enterprise customers, thus giving its clients the skills needed to manage and expand on the technology moving forward. Not a reseller or an MSP, Flux7 recommendations are 100% focused on customer requirements and creating the most efficient infrastructure possible that automates operations, streamlines and enhances development, and supports specific business goals.