Friday, 17 October 2008

Sense, Respond and Learn

Agile organizations possess three groups of dynamic capabilities for mastering change and uncertainty: sense, respond and learn capabilities. Information Systems and Technology need to support these three groups of capabilities. Sense capabilities are capabilities to anticipate or detect opportunities and threats in the business environment Respond capability is the ability of an organization in collaboration with its customers and partners in the business network, to quickly and seamlessly (re)configure combinations of capabilities to shape innovative moves with relative ease (Dove, 2001).Two interrelated practices - knowledge management and organizational learning - effectively leverage knowledge as an important capability of agile firms.

IBM used these concepts to build their sense-and-respond organizational framework, which is used in their On-Demand concept. This framework corresponds closely to early strategic thinking by the military about the distinctions between strategy, tactics and operations. The relation between sense-, respond-, and learn capabilities can be described as a virtuous cycle.

Overby et al (2006) discuss the symbiotic relationship between sensing and responding capabilities. They argue that each of these components is needed for a firm to be agile. Strong sensing capabilities are of no use, if a firm does not possess the respond capabilities to react to opportunities, which have been identified. Similarly, strong respond capabilities may not help a firm if it is unable to identify opportunities on which to act. We argue that learning capabilities can further strengthen sensing and respond capabilities and co-operate in a virtuous cycle.

Further reading:
It's time to flex - creating the organizational and cultural agility to do business on demand (IBM)
Stephan H. Haeckel on Sense-and-Respond Organizations
The Sense-and_response Enterprise concept applied to value chain optimization

Case Study:
Tranforming the military through Sense and Respond (IBM)

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