BCG Henderson Institute

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Everywhere we look, we see large, successful companies facing intense pressure from newer, smaller, faster-moving companies that threaten to disrupt their industries. Across the business landscape, speed is becoming more important than size, and the basis of competition is shifting from scale to pace or tempo.

In a companion article (“Tempo and the Art of Disruption,” February 2019), we ­argue that disruptors sustain a tempo advan­tage by cycling more rapidly than their competitors through a four-step learning loop consisting of scan, orient, decide, and act. The greater the market leader’s cycle time advantage over its rivals, the greater its competitive advantage will be.

Recognizing these changes, some CEOs are adopting agile ways of working—pioneered by the tech industry—to set priorities, allocate resources, and empower teams to make decisions more quickly. The goal is to achieve what we call fast execution. At its core, fast execution is about minimizing hier­archy and unleashing the creativity and judgment of the people closest to the work and to customers. The goal is to use increased autonomy to create an organi­zation in which average people deliver above-average performance every day—and learning happens continuously and transparently.

Too often, unfortunately, companies grant teams autonomy before ensuring that they have a clear, shared understanding of the organization’s strategic direction. And auton­omy without alignment can rapidly lead to chaos.

How can leadership teams develop and communicate strategy in a way that reliably guides an agile organization toward enhanced and sustained competitive advan­tage? The traditional annual strategic planning process is a poor fit for this ­approach—particularly for companies competing in rapidly changing markets, where a tempo advantage is most decisive.

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