This article proposes a framework to address a central conundrum in strategic management: How can firms transcend the trade-off between the momentum that results from the strong strategic commitments needed to gain industry leadership with the need for strategic agility in the face of strategic discontinuities? The article develops an analysis of the meta-capabilities underlying strategic agility, which is clustered around strategic sensitivity (both the sharpness of perception and the intensity of awareness and attention), resource fluidity (the internal capability to reconfigure business systems and redeploy resources rapidly), and leadership unity (the ability of the top team to make bold decisions fast, without getting bogged down in "win-lose" politics at the top). Based on an in-depth study of Nokia's evolution over the past twenty years, this article shows how these three meta-capabilities interact over time and proposes a framework to enable a firm to maintain and regain strategic agility as it matures.

What makes a company strategically agile--able to alter its strategies and business models rapidly in response to major changes in its market space, and to do so repeatedly without major trauma? Three years of in-depth case research on a dozen large companies worldwide showed the authors that one key factor is a new leadership model at the top. Senior executives at agile companies assume collective rather than individual responsibility for results. They build interdependencies among units and divisions, motivating themselves to engage with one another, and carefully manage their dealings to promote collaboration that is frequent, intense, informal, open, and focused on shared issues and the long term. Challenges to conventional thinking are encouraged. This is the new deal, and it's not easy to strike, because it requires executives to act in ways that are far from comfortable. After all, the corporate ladder at most firms favors independent types with a deep need for power and autonomy. At executive meetings, disagreement is suppressed or expressed passive-aggressively, eroding any real sense of belonging to a team. Switching to the new deal almost always requires a huge shift in the company's culture, values, and norms of interaction. The authors describe three approaches to making the shift: Executives can be given formal responsibility not for a business unit but for different stages in the company's value chain. This worked well for SAP, which has a relatively focused business portfolio. When a company's portfolio is less uniform, like Nokia's, business and functional units can be organized to crisscross on a matrix. And when a company is widely diverse, like easyGroup, it can emphasize the learning opportunities that units with common business models may share.