Issue 5 October 2008
However, companies should have a process for retailers to respond rapidly to market needs and
renewing processes to align them with strategy. Ideally, avoid costly mark-downs. World class logistics and
this should be driven from below. Anyone trying to information systems tie it all together. When styles
execute strategic change is empowered to identify change, or when demand shifts from one country to
and implement new processes. Agile firms also employ another, or when a currency shift makes one country
empowering continuous improvement programs ‘with a more attractive supplier, Li and Fung can respond
teeth’ such as General Electric’s ‘Workout*’ to engage immediately.
the front line in reshaping the architecture.
Capital One is an interesting example in the financial
Agile firms often break down the organisation into a set services sector. It uses a self-organising component-
of small, independent, self-organising “components” based structure to generate and process its numerous
(teams), each running its own business. They design credit card ideas. Anyone can suggest an idea to a
an internal market that is more efficient than the business manager who then forms an ad-hoc team
external market, with greater information transparency to evaluate it, drawing on people from IT, the risk
and trust. Agile firms are also embracing new social department, etc. If the idea passes initial criteria, it is
networking tools to turbo-charge their informal tested. If the test works, then it is launched. Meanwhile,
networks and help create and sustain very different the team is dispersed to the next project.
organisations from those we have been used to in the
past. And finally, Atari presents a different picture. In 1972
* Work-Out has been an important part of the way we work in RBS across the
Atari was founded by Nolan Bushnell, the grandfather
Group for over five years. It has reduced bureaucracy, increased efficiency and
of video games. In fact, a couple of the earliest
enabled people to improve the processes they work with every day.
employees were Steve Jobs and Steve Wozniak, who
bw» what companies do you consider to be later started Apple. They started with a game called
truly agile? Pong – great game – and then launched a hugely
popular video console.
Jw» I will give you two examples of companies
benefiting from great agility and an interesting case So where did they go wrong? Ultimately they did not
study in poor agility. have the agility to respond to the changing market
and to make strategy happen on a continuous basis.
Li and Fung is one of the world’s biggest players in First of all, they turned down a game called Donkey
fashion clothing manufacturing and retailing but it Kong (which turned out to be one of the most popular
owns no stores or factories. Instead, it subcontracts games of all time) from a tiny company in Japan called
manufacturing to over 9,000 suppliers around the Nintendo. Then they launched PacMan on a console
world, often using many suppliers in parallel for the that was just not powerful enough. Then in 1983 they
same order so that it can deliver the product very lost $500 million launching the more powerful 5200
quickly - in as little as 10 days. This allows local console too late.
24 | Perspectives on technology
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