Strategic Agility by Bettina Büchel and Rhoda Davidson - Preview

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Introduction

practice or product in a subsidiary location or locations where a routine or business model is developed for subsequent subsidiary- by-subsidiary scaling. We see piloting as a key tool in the arsenal of multinational organizations; it is a capability that – when mastered – enables organizations to reduce the risk of failure, as they test concepts that will help them make the quantum leaps in performance. Through piloting multinationals learn and can, if necessary, shift resources – including cash, talent and managerial attention – which is the core of strategic agility. By allowing organizations to develop a blueprint that they can replicate in other parts of the organization and by building support for strategic initiatives at the operational level among employees that will execute the programs, piloting helps organizations maximize the gains achieved from the initiative. But, when done poorly, piloting can have devastating consequences, consume vast amounts of resources, discredit initiatives or stunt organizational learning. One growth initiative that failed miserably was Motorola’s $5 billion investment in satellite-based phones. The phones, which had a price tag of $3,000 each and came with hefty monthly charges, were ultimately rejected by customers. The business line was closed after a year, and the company filed for Chapter 11 bankruptcy. The problem: Motorola ignored the early warning signs around the shortcomings of the technology and the practicalities of selling the phones on the open market. A pilot was not conducted. In another example, Avon, as part of a global “Service Model Transformation” (SMT) initiative, tried to introduce a new sales order management system in 2012. i The new system was intended to streamline the ordering process, thereby allowing Avon to reduce costs and better meet customer needs and expectations. By utilizing a new back-end enterprise resource planning (ERP) system and a new tablet enabled e-commerce front end, the SMT system was supposed to allow sales agents to showcase products on their tablets and