Leo Tilman and Jesus Salazar-2

Purpose, Strategy and Agility in Business: CEOs, Take Note

Hasbro sparks instant name recognition for many Americans. Whether it’s a “Stretch Armstrong” doll, a game of “Guess Who?” or a “Lincoln Logs” building set, most consumers feel some amount of nostalgia when confronted with their favorite Hasbro toy. That type of nostalgia, which can transport a person to a lost time or place, is powerful, and Hasbro knows it. The company’s understanding of that truth informs its purpose to Create the World’s Best Play Experience. 

In addition to a seemingly endless catalog of toys, Hasbro has expanded into the digital landscape and as of February 2021 was “revealed to be a geek game company with toy and entertainment divisions” (Wall Street Journal), meaning their digital gaming division is now the largest within the company. Seemingly unstoppable Hasbro is consistently ranked in the top 10 toy and game producers worldwide, despite multiple public relations nightmares and manufacturing challenges in its lifetime. Its sheer existence in a radically evolving retail landscape is remarkable. So why does Hasbro continue to thrive, when the company itself and the market in which it operates look drastically different than it did at its founding 99 years ago? Hasbro demonstrates a history of agile, strategic decision making and remains rooted in its purpose.

When three experts with diverse professional backgrounds gathered to discuss the state of business in 2022, they quickly reached the consensus that organizations guided by purpose and operated strategically are positioned to remain relevant, please stakeholders and prosper long-term. In a discussion inspired by their book, Agility: How to Navigate the Unknown and Seize Opportunity in a World of Disruption, author and economist Leo Tilman and retired US Army General Charles Jacoby sat down with Prosono CEO Jesus Salazar to discuss the concept of strategic agility and how its application can make or break an organization in an increasingly globalized, transparent economy. 

To understand what role “purpose” should play in an organization, it helps to define it. Tilman describes purpose as, “An innate quality,” while Salazar echoes its value as, “A company’s north star.” “Purposefulness has gotten much more complex than it’s ever been,” notes Salazar, which he attributes to the democratization of information and consumers demanding accountability from businesses. “Historically, organizations were able to keep a certain set of stakeholders and shareholders front and center for driving a purpose. Now, purpose has to resonate across more stakeholders.” The factors increasing stakeholder engagement should matter to companies. “Society at large are able to draw deeper and stronger connection points between organizations, and the level of forced transparency on organizations is driving interest where there hasn’t been,” continues Salazer. Tilman agrees, “Covid has really intensified the change in customers' preferences.” The pandemic forced society to pause, reflect and reevaluate: consumers assessed their spending and revisited their personal values; policies aimed at helping low-income Americans shed harsh light on socio economic divides; neighborliness turned heroic; and purposefulness became urgent. The pandemic, social justice movements, social media and globalization are all major contributors to consumers’ increasing expectations for transparency and purpose-driven business practices. 

While some companies might feel pressure from the heightened demand for transparency, the three experts agree that companies guided by purpose and operated with true strategic agility are vastly better equipped to respond skillfully, rather than react chaotically, to crises of various types. As an example, General Jacoby referenced some ill-prepared companies’ responses to the 2020 murder of George Floyd and the subsequent galvanization of the Black Lives Matter movement: “Did you have to invent the position of Chief Innovation Officer? Then that cross-thinking wasn’t happening in the organization. Am I bolting the DEI officer on to the organization?” He continues, “An ‘agile’ organization becomes a clunky Frankenstein…if a value isn’t organically part of the culture or model of an organization.” Organizations that hastily pieced together DEI policies or made one-off donations to social justice organizations likely didn’t incorporate the value of inclusivity into their operation. Jacoby’s Frankenstein is something Tilman is familiar with; describing the current geopolitical climate and the biggest challenge companies face today, Tilman says, “Companies are a bit caught off guard by one dislocation after another. What is missing is a repeatable diplomatic way to respond to it all.” 

We’ve seen examples of strategic agility informing tactical agility in recent years through significant global societal and economic upheaval. Crises across healthcare, racial justice, public safety, the environment, the military and politics have challenged organizations in every industry. As private citizens, employees and consumers, Americans have grown accustomed to crises snowballing, and even society at large has developed its own systemic responses to disasters of all sorts. Through private channels, nonprofit organizations and the mass media, society’s repeatable, diplomatic response to crises generates fundraising, volunteerism and activism almost automatically. Yet many organizations still haven’t implemented purpose-driven systems to guide them in strategically responding to challenges. Why are companies continuing to rely on surface-level quick fixes in times of true crisis? 

These concepts trickle down to a simple truth: companies can no longer have one or two strategy sessions per year and expect to succeed. Strategy should be pervasive throughout an organization; it should inform everything from decision-making, policy and investment to culture, communications and branding. The very fringes of an organization should be in tune with the C-Suite so that companies can “merge top-down strategies with bottom-up execution,” Jacoby stresses. “You want to have unity of effort so that everybody understands what they need to do.” This level of organizational harmony is achievable with the right people and the right tools. 

The right leaders, Jacoby stresses, are “energetic, engaged and committed…eager to infuse the culture of a company with the requirement to be agile.” He emphasizes, “In terms of opportunity for leadership and courage in vision, this is as exciting as it gets,” and notes that the practice and application of agility should be applied to operations indefinitely, so organizations can “evolve and remain relevant.” Leaders do not solve one issue and move on - they cultivate a nimble culture that honors the values of an organization. They must ask themselves: is every member of the organization, extending all the way to the fringes, engaged with and passionate about the company’s purpose

The right tools “mean something different on a computer than on an assembly line,” notes Jacoby. Tools encompass whatever mechanisms are used to apply the strategy: values, expectations and systems can all be used to execute an organization’s strategy. Tilman describes a “systematic and formal exercise of formally articulating how [a company is] relevant” as helpful to determining what operations and procedures can serve a company’s purpose. As an example: Germany responded to the current Russia-Ukraine crisis by re-firing shuttered coal plants to ensure its citizens have access to heat during the winter. The government demonstrated its relevance (need) by activating a tool (system) that fulfills its purpose (serving the citizens of Germany). This foresight by German leadership avoided a last-minute, reactionary response to a crisis, and reinforced its relevance to society. While the decision to re-fire coal plants is incongruous with the country’s commitment to the Paris Climate Accord, the impact of Germany’s decision will have a negligible effect on their overall climate change commitment, thus ensuring the German government remains consistent with its purpose. Tilman comments that the decision “took detection, assessment and engagement,” adding, “the response to dependence on Russian energy was well understood.” This broad acceptance of Germany’s decision might seem incongruous, too: how does an entire nation seemingly change course on a policy designed to fulfill the same purpose the reversal claims to serve?

To ensure an organization is well understood, the importance of clear messaging cannot be overstated. “The cohesion, level of engagement, time, investment, energy and dialogue that happen within an organization; the relentless automatic response creates the fertile ground for true agility,” says Salazar. If an organization’s messaging clearly communicates its purpose, they earn public acceptance in situations that demand strategic agility. Salazar notes this should encourage companies to lean into their purpose: “It has become a threat to not embrace some of the deeper purposes that society is interested in,” Communicating purpose with clarity of vision, conviction and evident strategy is paramount, and Salazar emphasizes that the purview of leadership teams is to continually reposition an enterprise in its environment. That can involve developing new products and services, making changes in balance sheets, changing business models, changing workforce and even fundamental reshaping of the business model.

Purpose, strategy and agility give companies freedom and license to adapt. When synchronized effectively, they create room for tactical agility: the hands-on, top-to-bottom response that gives stakeholders at every level of an organization the power to “detect, assess, anticipate, and change process,” Tilman says. Hasbro’s evolution from boutique textile manufacturer in 1923 to seventh-largest toy company in the world in 2022 has been anything but linear. But the company has repeatedly responded skillfully to its changing environment, consumer demands and production landscape, remaining steadfastly anchored in its purpose. Salazar concludes, “The new level of complexity requires a lot more” of companies. Most challenges can be anticipated - even the pandemic - so organizations should take a long view of major disruptors, implement strategic policies, make strategic operational shifts that are guided by their north star and allow them to continue serving their greater purpose throughout seismic change.  

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