Great companies seldom fail because they started doing something silly. It's more because they kept doing the same smart thing for too long. Welcome to the Changing Conversations podcast. I'm Katie. I'm a leadership consultant at Implement Consulting Group. And I'm Stie. I am a partner in Implement and I work with Transformation. And we believe that people and organizations change through changing conversations. This podcast is about inviting you into the conversations we're having with leading thinkers and researchers about the conversations they're changing. So you can get inspired and use their insights and questions to spark positive change and transformation in your organization. Today, we are thrilled to be in conversation with Yves Doss, a leading expert on strategic management, agility and innovation, chaired professor at INSEAD, and an experienced leader and advisor to companies around the world. Welcome, Yves. Thank you for your invitation. I'm delighted. And we would like to frame the conversation with how you ended up here with us. And I think the person to do that is Stie, because you have been geeking out on Yves work for some years now. You've been using it and work with clients already. So can you share why we're so excited to be in conversation with Yves today and why we've invited him here? Well, that's an easy one. So 20 years back, Yves wrote a book called Fast Strategy. And for me, it was the first time I came across a thinker that was really trying to figure out how to create an agile organization. Not agile as a little technical kind of process thingy, but more an agile organization. And what Yves did way back was he offered a language that was super compelling, but also intuitively right to an extent where I just felt, why have no one kind of shaped that language before? And ever since it's been with me and I've used it to do interactions with leadership teams around how to create a more agile organization. So I've been a fan for many years. Fantastic. We are very excited to unfold that language during this conversation and to also get a little bit actionable with our listeners about how they can put some of your brilliant ideas into practice. But we're going to go there. And before we do, we would like to get to know you a little bit better, the human Yves Das. So could you share about one conversation that you think shaped you and made you who you are? Yes. Probably the most important conversation was with a man who became a colleague who was a few years ahead of me. His name is Dominique Ayo. Like me, he had done the Haute Etude Commercial, the same school, business school in France. And when I decided or when I accepted to become a researcher in an academic institution, I encountered Dominique. And Dominique told me, gave me three advice. And that was probably the most, the three most fundamental pieces of advice in my professional life. He said, well, if you want to do something around teaching in strategic management, you need to get a PhD and you need to get a PhD in the US. But not anywhere in the US. Go to Harvard and nowhere else. And not anyone at Harvard. Go to a young man. His name is Joe Bauer. He's only in his 30s. But he is the best and the brightest. And that's what got me into the academic trajectory, if I may say so. So I think that was perhaps the most fundamental conversation. Great. Thank you for that. Thank you. So that's an insight into what shaped you. And we'd like to focus the rest of our conversation here on your work and the conversation that you're shaping around what you've called strategic agility. Could you share about what is the conversation that you have aimed to change when you've been releasing this work into the world? Well, I think the first, the most important part there is to say, this is not an analytical capability. It's an organizational capability. So, you know, if you dream, if a manager, if a CEO dreams of saying, I just need to get better strategy report, better consultants, better analysts, and so on, that's entirely the wrong track. It's not useless, but it's not sufficient. First of all, because the strategic information that reaches a company goes through various channels to various places. It doesn't necessarily go, actually seldom goes to the top. Partly because conversations are not very open. They may not be very honest. Partly because the outside world is in touch with an organization, not with the CEO. The CEO travels in private limos and corporate jets, never meets anyone. And the few people he meets probably have an interest in meeting him or her, meaning that they cannot be trusted. So, I think, you know, the first, the first point is really be more open. And I think that's the most essential. The other point is to understand that it's a process of resource allocation. So, it's a process of making trade-offs. It's a process of reaching collective decisions. It's a process of achieving agreement on those collective decisions, or at least achieving commitment to these decisions, even though the agreement initially may not have been there. There is this famous quote that Jeff Bezos, the founder of Amazon, keeps repeating, saying, I disagree and commit. Right. And that's essentially, that's very important. Now, to disagree and commit, you need to have a fair process. So, you need to know who and why you disagree with. And you also need to know who you commit to. So, fair process and inclusion is very fundamental. And that's another part where I'm saying it's a social and political process. Strategic agility is not analysis. It's an organizational capability. And it's a way people need to learn to work together, make decisions together, make commitments together. And you are, you're dancing around it already. And now I would love us to just get explicit about the definition and what builds up to it. So, strategic agility, could you define it for our listeners? Well, strategic agility is a result. It's an outcome. So, it's an outcome of the interplay between three sets of forces, if you wish, or three vectors of forces. There is one, which again is probably the simplest, which is strategy analysis, strategy awareness, strategy sensitivity. I just want to add one point because it's often neglected one, which is the importance of anomalies in your day-to-day life and day-to-day business. Anomalies are usually the foretelling signs of strategic changes, perhaps coming or strategic challenges in the making. So, organizations have a way to ignore anomalies. And that's very, very detrimental. The second main component is resource allocation fluidity or flexibility. It's monies, of course, but it's also people. It's also intangible assets, competencies, brands, know-how, technologies. And that requires that somehow there is no, there is no fragmentation or there is little fragmentation. If the company is too badly siloed, if people defend their own innovations and their own initiatives, then you cannot have resource for anything. And then the third one is for this to happen, for the company not to be siloed, for people not to be defensive and for people to acknowledge that strategy is a social process, you need to have some unity of the leadership. You cannot have disagreements. Or you have disagreements, as I was saying with Jeff Bezos, you have disagreement before the decision is made. But you have no disagreement once the decision has been made to implement it. So, implementation is absolutely key. And these are the three critical ingredients for achieving strategic agility. But strategic agility is a systemic outcome. It's the interplay between those three set of forces. So, cherry picking seldom works. As a CEO, you can be tempted to jump on one and say, oh yeah, that's what I need to do. Usually, the results are disappointing. You end up doing it, but it doesn't change much. Yes. I think it's a, thank you for, that was exactly what I meant with basically offering a language for how to. It's very difficult to work with anything if you haven't got a language. And here's a language for how to work with strategic agility. I think what inspired me a lot in this work is that within each of these three vectors, they are all in their own right almost a paradox. So, if you just take strategic agility, that's a paradox in its own right in the sense that strategy is, you know, going in that direction and agility is actually the ability to change direction. So, it's an oxymoron in its own right. You're also actually pointing to something that I've found interesting, this thing about, you mentioned Bezos, this thing about disagree and then at the same time committing. Yes. That is also at a fundamental individual level, an ability to both end in the sense that I can be in disagreement, but I can commit to something. Right. And some people have a very, very hard time embracing those two opposing forces. Yes. What's your thinking on that? Well, most of us are comfortable not having to embrace conflicting forces. So, the real danger, by the way, is as human beings, when we are facing the famous unknown unknown, we tend to jump on the first plausible explanation that tells you that the unknowns are actually the knowns and then you no longer have to think. So, the first point is you need to have the tolerance in your mind that there are unknown unknown and therefore you don't know yet. And therefore, there is a requirement for patience. There is a requirement for think and rethink. Don't rush into a decision. There is this famous Einstein, at least attributed to Einstein quote, but apparently accurate saying, if I were given 24 hours to solve a problem, I would spend the first 23 thinking about the problem and the last one thinking about possible solutions. So, you need to master the problem first. And studies, research has shown that 50%, over 50% of strategic decisions that turn bad, badly, bad consequences, stem from poor problem definition or problem understanding. So, it's really also understanding the, and if you want the, if you want tolerance for polarities and tolerance for paradoxes, you need to have, to suspend judgment and to have this patience and this ability to hold several competing ideas in your mind. Can we talk a little bit about what is driving the need for strategic agility today? What companies can really benefit from embracing it and what kinds of advantages does it bring? Well, it seems to be at a very, at a very high level. It's a mixture, indeed, of contradictions and paradoxes. Like, you know, some have been around for a long time. And, you know, 50 years ago, when I was a student, I was looking at multinationals in Europe and the dilemmas of the paradox of having to be both global and local at the same time. And it's interesting that now you see this becoming important again with the geopolitical differentiation or a different path. So, there are many issues like this where there are contradictions in the outside environment. Fast and slow. Take your time, but be fast. Again, almost what I was saying earlier. You cannot rush into action just to reassure yourself. But sometimes not rushing into action is worse than rushing into the wrong action. So, you have to kind of, there again, have a lot of judgment. It's difficult. It's difficult. So, I think, you know, a lot of this is really comes to the ability to live with, to have sufficient, I'm not sure I'm a big fan of psychological safety, because I don't think you want people to be too safe. You need to be fighting some uncertainty. You need to be a little unsafe. But you can live with some level of stress and not being safe. And I think that's also a key to this duality. I think, if I can just add to the importance, in the last nine months, I've been part of interviewing 200 CEOs and chairs of boards. And I think the most important takeaway from those conversations was, you know, maybe starting by saying, we asked them one question, one question. And we asked them, what would you wish you could say about your organization that you can't say today? And then we just paused. And I would say that more than 90% of the people we interviewed were centering around, with different wordings, but centering around a longing and a yearning for being more agile, being more responsive, being more adaptive, having empowered people with agency to act upon opportunities and threats emerging, being more sensitive to picking up early signals of things that need to change. Basically changing faster and being more adaptive. And in those conversations, of course, I was listening, but I was also thinking back to your book 20 years ago. And I can't help thinking that in some way, you were a little bit ahead of time. And I would argue that now more than ever, everyone has realized that the model we're running is good for certain things, but it's not necessarily very good for the world we're looking into. Right. Yes. Yes. Yeah. And we have been, actually, we're having that conversation over lunch today. The need for strategic agility is greater today, I think, than it has been in any recent time. And strategy used to be an exercise which you would do periodically and which would be essentially analytical and which would not entail any major redirection nor any major resource reallocation nor require a hell of a lot of working together at the top. And this is a challenge for Intel to overcome the dominance of the PC chips and how difficult that position has become. I was also talking. that's interesting, you know, Microsoft almost invited me to do a big challenge process on strategic agility. And at the end, they did not. They got cold feet and they said, well, first, this was a time of the financial crisis, we'll first tighten the screws and put everything in order, which is completely opposite to strategic agility. So after two rather unsuccessful trips to Seattle, essentially we decided to give up. So the problem there is really we rely too much as human beings on the heuristics inherited from our past successes. And that means that recognizing that change is needed is very difficult. Yes. And I think this also leads to a really interesting point, and you could even call it a twist in your work, about how companies often unintentionally, you use the word, erode their strategic agility in pursuit of what are perfectly worthy goals or goals that are hard to argue with that we just sort of take for granted as a good thing, like this clear direction, efficiency, strong leadership. So can you talk a little bit about how pursuing those goals can have these sort of unintended consequences and lead to rigidity? Well, it's part of, to me, it's part of this development of heuristics as shortcuts for real thoughts or as substitutes to real thought. So indeed, you know, the more successful you are, the more you believe that what you are doing is right, and the more you believe that what you are doing is right, the harder, obviously, it will become to question or to change. There is also a lot of, you know, people get developed and promoted. They make their careers in a certain domain, in a certain context. They develop what C.K. Prowl had, a very prominent strategy thinker, was calling a dominant logic. In other words, a worldview which is theirs, but may be wrong or may have become wrong. And the idea is always that great companies seldom fail because they started doing something silly. It's more because they kept doing the same smart thing for too long. Yes. So Nokia, I studied Nokia some number of years ago, same story. Nokia stuck to the phone as a product and did not recognize the fact that Apple's entry was not a bad phone. There was a change in how the industry would operate, and it was a platform for Internet-based applications, completely different. So very often, you know, there is rigidity creeps in by reinforcement of past practices. We get institutionalized into policies, processes, power relationships, so we can live together well, but we cannot change together. One thing that you mentioned today as a potential maybe antidote or a way to try to mitigate this a little bit that I thought was fascinating is being a little bit more attentive to anomalies. Could you say a little bit more about that? Well, it's interesting that organizations, or like us, you know, you tend to get used to your faucet in the bathroom not working very well, and that's fine, you know, it doesn't work very well, and you move around it. So we don't fix things for small anomalies, and therefore we learn not to worry about small anomalies. And very often, now there are many anomalies which are minor. There are also a few anomalies which are major, and which can create a complete, can turn into a complete disruption if you don't pay attention to this. And you find it in corporate contexts. Again, take Nokia for a second. At some point, it found that the application developers, which were critical to its success, were becoming reluctant to commit to their operating system. It was a thing called Symbian in those days. It was an anomaly. But they had a 40% world market share. I mean, who are these stupid guys who don't want to work with us? They are easy to dismiss. The only problem is they started working with Apple. And they discovered that actually the reason they did not work for Nokia, but Nokia didn't know that, was that getting to develop applications on Nokia's operating system was a lot more difficult, complicated, and expensive than doing the same for Apple, although Apple picked up 30% of the turnover, or even more so with Android and Google the following year. So again, you know, it's continue. The power of old-fashioned, obsolete, dominant logics is frightening. Yes. In many organizations. The anti-confirmation bias is looking out for surprises instead, or disconfirming evidence. Exactly. I have more questions, but I'll let you get curious here too. No, I was actually going, when I was thinking about the three drivers of strategic agility, the strategic sensitivity to opportunity sensitivity, this ability to sense at the fringes early signals of something happening, you're just giving a great example right now, right? So the ability to sense that, but also to bring that information back and sense make around it to figure out, is this anormality something we should take notice of or disregard? So I think that this is an area where I believe that the fact that you laid out the language and we now have AI as a vehicle, I think that there is an opportunity to actually develop a sensitivity for an organization, an ability to sense whether the assumptions on which you have based your main choices, whether those assumptions are sliding a little bit in a market or in a technology or with some clients. And I think there is an opportunity for exploring, and I'm just using strategic sensitivity, this ability as one, but you could take the two other vectors as well, that you suddenly can do things that was cumbersome to the extent where it was almost impossible. How could I, 20 years back, overlook all my main assumptions in every market, on every technology, with every client segment? It was just, I would give up without even, before I even contemplated the task ahead of me, it was just impossible. And the same thing would go for how could I possibly leverage the collective wisdom of my organization so that everyone knows what everyone does. That's just, it was just something, that's not happening, so we will silo the shit out of stuff. So, but now I think there is an opportunity for reimagining within each of these sectors what is actually possible. And does that resonate with you? Yeah, absolutely. No, no, no, it's actually, I'm working, I'm working, but it's, you know, you can, we can have another conversation in six months or perhaps next year. I'm working on this integration of strategic management and artificial intelligence. And some of it is superior knowledge and superior analysis. If you are a little fancy, you can take it at least one or two steps further. You can also say, you can start to think of an organization as a self-regulating system where, which is essentially, where action takes place by agentic agents, not by human beings, or much less by human beings, particularly in businesses like retailing, where just looking at the pattern of interaction and what sells and doesn't sell and the behavior of customers and doing this on a very large scale in a very short time, almost real time, feeds you very interesting data, which you don't even need to have human beings process. You can just have entirely AI solutions to what is the product mix, what are we going to ship, what price discounts are we going to give, and so on. A hell of a lot of your operational marketing activities can be run without human involvement. Yes. And can be run by the minute, literally. Yeah. And that can also take you into different strategies because the mix of what you do will change as a function of the behavior of these interactions, of these collective, the collective behavior of these interactive agents. So I think there is something entirely new which is opening itself there where strategy becomes perhaps more the definition of rules and guidance and boundaries so artificial intelligence doesn't do anything wrong and detrimental to you or to your customers, but where a lot of what we used to call strategy, particularly in operating businesses, is actually delegated to artificial intelligence. Yes. It's a very different world. That's fascinating. Yeah. Earlier today, you mentioned that the front end of strategic agility, and I think by that you meant the strategic sensitivity, could largely be done by AI in the future, or at least in part. But the hard part is what happens after that. No, absolutely. So could you talk a little bit about what are the real challenges here with taking that intelligence that we might now be outsourcing to AI and using that to steer resource allocation decisions or for the management team to use that to make choices? What gets in the way? Well, yeah, we actually touched upon one or two already. One is this question of suspending judgment and accepting dualities, paradoxes, and so on. So don't jump into the fast and easy resolution of what seems to be pulling in different directions. It may also be, again, less human involvement, perhaps, and more delegation, including to artificial intelligence agents. It may be pattern recognition and sense-making, where in some areas, just to give you a little bit of an anecdote, but I have a very good friend of mine who runs a body imaging business in California and a body diagnostic imaging business. And for him, he has been awfully dependent on radiologists, medical radiologists, medical doctors. He may still need some medical doctors to sign the bottom of the pages, but most of the work that these guys and gals have done so far can go to artificial intelligence analysis and large learning models very quickly. So it's really going to transform businesses in a fundamental way around this question of, you know, what do you know about the world around you? What do you know about your customers? What do you know about the context? And so on. And it also ties to your anomalies in the sense that I would guess that a language model could easily go with averages to a very large extent and build the reasoning on that. So I was thinking about if strategy, in essence, is a creative exercise of imagining the future. So you're imagining something that could be, and then you're reasoning around that until you... So it is a very creative exercise. Yes. And that plays well with the anomalies because it's actually your ability to see that, ah, this anomality together with this and so you build hypothesis by actually not looking on averages, but looking at anomalies. Yes, looking at... And looking for a pattern in those. And of course you can use AI for that as well, but you could also miss it fundamentally. No, of course. That's exactly, I mean, it's interesting you say that because it's very much what that body imaging doctor I was mentioning does. You know, the AI is very good for the average cases. If people have some very strange images, then there is also something very interesting, which is the AI system has to bifurcate and say this is for human beings to take a look at. I give up. I don't know enough. You could probably, although you would not want to do it for more than just a regulatory reason, you could probably also say that if someone has no particular disease in the making, then perhaps there is no need for human intervention at all. So on the other side, and the middle ground is where AI is most useful and maybe most discriminant or at least may discriminate or not and therefore involve more or less human expertise into the... and human decision making into the diagnostic and the feedback to the patients and so on. Yes. There's absolutely still a need for that human discernment. Yeah. And I think the AI experts wouldn't fight me too much on that. Now we would love to move into what we would describe as our wrap-up mode. And this is when we put our heads together and we co-create a little bit for our listeners who have been with us through the conversation, how they could put some of the ideas that we've surfaced into practice. So what are some questions that they might ask? What are some experiments they might run if they are to try out some of these things that we've mentioned? Well, it's a complex question because there are so many different entry points and so many different angles. it seems to me it's around breaking silos, communicating more. It's around asking questions more than providing answers or providing positions. It's more around dialogue than debate. It's not a fight between positions. It's a joint search for a common solution which is very, very fundamentally different. A few of these things basically modify very quickly the dynamics, or if you want to call it, the culture of an organization toward more collaborativeness, more openness, more mutual understanding. And all of these contribute to strategic agility. In other words, what I'm trying to say is the technicalities of it can be done and are probably relatively easy to do. So if you tell me we are going to do more scenario planning or we are going to use option reasoning or real option thinking and so on, I would say yes, but fine, you probably already did this for the last 20 years, if not the last 50 years, you can do it better. The real difference is back to the question from a while back. It's strategic agility is a social process within the organization. It's not the sum of discrete pieces of analysis. So if you want to improve the analysis, yes, do it. It's useful, but it's not efficient. Yes, I'm hearing that a high quality conversation is a major unlock for strategic agility. That is definitely one of my takeaways from your work is the importance of high quality dialogue because it's the external sensing as well as the internal sense making. and the connectivity around those. Yeah, and I call it dialogue because, you know, the key point in dialogue for me is you share starting points. You don't share endpoints. So you don't throw, here is my proposal versus yours and there will be a winner and a loser. You start by saying, here is how, here is where I come from and here is how I understand this problem. Yes. And what's your take on it? Absolutely. Which is a very, very different conversation. If I may, I'll add a few other things that I've noted down for takeaways for myself. Being mindful of assumptions, explicit about them even. Maybe even having, when will this no longer be true? What would lead me to change my mind? Suspending judgment with something that you mentioned. Practicing pattern recognition. noticing and paying attention to what surprises you. Steve, what comes to mind for you? I think, I think the big idea is, and that's the core of your whole, your whole IP in this space. That is, that is, I think that the three areas, strategic sensitivity, resource fluidity and leadership unity. I think those ones are, I mean, most executive teams are working on, in some shape and form, transforming their organization, which is a system, a complex system. And, and, and the, my own thinking about that is that, okay, if you're looking to change a system, that is by definition impossible because you can't control every part. So what do you do? And a good metaphor for what you do is you identify a few acupuncture points. in the organization that you, you address and they have a catalytic impact on the whole system. and I think, I think actually the three vectors that you have, you, you save us and every leader a lot of work because most of the work would almost go into identifying what are those acupuncture points for creating an agile organization. and I think you have given us the three vectors, the acupuncture points to work with. So I would definitely start by shaping the conversations on where, where in those areas do, do we have some toxic side effects of doing too much of something that was initially really good but we just went a little bit overboard and, and, and lost ourself. and, so I would, I would look for those toxic side effects within those acupuncture points and I think it's a beautiful language for that. So thank you for that. Thank you. Thank you. Thanks for joining us in this conversation. We hope it sparks something for you. To continue the conversation with us, you're welcome to send us your reflections and questions through the link in the show notes. We would love to hear from you. We also invite you to use this episode as a conversation starter by sharing it with your colleagues and friends. Take care and see you next time.