This research essay is authored by Max Heusgen, student in the master course Open Organizations and Organizing Openness at University of Innsbruck.
In today’s fast-paced business environment, organizations constantly seek methods that foster adaptability, responsiveness, and inclusivity in their strategic decision-making processes. One emerging trend is Open Strategy initiatives. Unlike traditional top-down strategies, open strategy promotes increased transparency, inclusion, and broad-based participation in strategic development, often facilitated by IT systems (Hautz et al., 2017; Tavakoli et al., 2017). However, as this openness scales, it becomes increasingly complex, leading to potential pitfalls that can hinder its execution, as evidenced by the Wikimedia Foundation (Laura Dobusch et al., 2019) and Premium Cola (Luedicke et al., 2017). Hautz et al. (2017) therefore outline the five dilemmas of process, commitment, disclosure, empowerment, and escalation. Interestingly, some companies are already reversing their open strategy approach in pursuit of greater control and profit from their innovations (Appleyard & Chesbrough, 2017).
Another prevalent trend is Agile working. Originating in software development, Agile methods prioritize flexibility, continuous improvement, and active stakeholder involvement. They are characterized by iterative development cycles and a swift response to change (Alsaqqa et al., 2020). Agile methods positively impact project success, efficiency, and stakeholder satisfaction in volatile and uncertain environments (Serrador & Pinto, 2015). The 15th State of Agile Report by Digital.ai (2022) reveals that 86% of Software Development and 63% of IT departments are working agile, with other departments like operations or production also seeing a significant increase from 2020 to 2021. Agile values align with Open Strategy on many occasions and provide tangible measures for their implementation.
The central thesis of this essay suggests that as open strategy is practiced more radically, its inherent challenges become increasingly pronounced. However, the principles and methods of Agile frameworks, known for their robust response to the complexities of software development and other areas, can offer valuable solutions to these open strategy pitfalls. This essay will introduce the values of Open Strategy and the challenges associated with scaling them in an organization. It will then explain how Agile methodologies handle these values and how Open Strategy could benefit from these practices.
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