In Volatile Times, Agility Rules
Flexible capacity and worker skills are essential, but in a context of strategic clarity BusinessWeek, September 10, 2009. C. K. Prahalad
C. K. Prahalad is the Paul and Ruth McCracken Distinguished Professor of Strategy at the Universityof Michigan's Ross School of Business and the author of The Fortune at the Bottom of the Pyramid. Over the years managers have develped tools and techniques to overcome challenges ranging from inconsistent quality to stagnant productivity. (Think Six Sigma, Total Quality Management, and just-in-time supply chains.) Now what they need is a system for addressing volatility. How does a chemical company, for example, cope with oil prices that bounce from $50 a barrel to $150 and back in 18 months? And commodity prices are just one factor in the volatility we're seeing in the global business environment. The U. S. has a new Administration with a fast evolving regulatory posture. We may soon be saying the same thing about Japan and Germany. Terrorism and pandemics pose threats of major disruptions. Changes in consumer sentiment, such as "going green" or shunning conspicuous consumption, can rewrite estabished patterns of demand in a remarkably short time--just ask automakers. Volatility is here to stay. What this does is force managers to harmonize two critical capabilities: on the one hand, strategic clarity and consistency; on the other, agility and resilience in operations. This may seem counterintuitive, but organizations can handle extreme change only when they can address it within a clear strateic framework. Oherwise, companies can only wait and react. | 
