TRANSFORMATION
Thriving in Disruption
what does the organisation of the future look like
The future of organisations.
Our point of view.
“It’s not the strongest of the species that survive nor the most intelligent but the most responsive to change” Charles Darwin.
One thing is clear, change and disruption is now a daily concern. Whether it be the advent of generative AI, global socio-economic instability or the constant tension between remote and in person work - disruption is set to be part of the new normal. This backdrop leads to big questions about how we set our organisations up to be resilient, agile and highly responsive so they thrive in this ever evolving landscape.
The organisation of the future will be different from anything that’s gone before
Our work with global organisations has led us to believe there are some common capabilities that need to be established that set your business up for success.
Inclusion will be the heartbeat of performance
For your organisation to stay at the forefront, you’ll need to foster a highly inclusive way of working that ensures everyone is involved in design. Fostering diversity requires a commitment to ensuring a diverse perspective is represented through both diverse representation and by creating a psychologically safe working culture. Too often, there is a preconception that the work of inclusion is simply a political exercise that only slows things down. The data seems clear though. Extensive research conducted by Kornferry suggests that a diverse workforce generates 38% more in revenue due to the creation of more innovative products and services. MacKinsey's work entitled 'Delivering through Diversity' also finds that diverse and inclusive workplaces are more likely to outperform their counterparts ion terms of financial returns.
Having the right balance and blend of people in the room is not enough though. It’s critical that organisations focus on ensuring that those people feel safe, empowered and confident to bring their best. Google’s Project Aristotle demonstrated that it is highly engaged and involved team members that are the number one driver of team performance. When people speak up, innovation goes up and this leads to market breakthroughs.
"Diverse and inclusive workforces are more likely to outperform their less inclusive counterparts in financial terms"
Connecting the business together
Too often businesses have believed that it is primarily financial capital holding them back from growth. We are increasingly finding that unlocking the intellectual capital that lies dormant inside of organisations is one secret to driving growth. Mckinsey research finds that companies actively promoting knowledge sharing are 31% more likely to outperform their competitors, with Deloitte saying that effective knowledge sharing practice means organisations are 46% more likely to be strong innovators in their space. This is all about democratising knowledge and information. In the industrial age, holding on to information increased your power, in the organisation of the future, sharing knowledge is what unlocks your superpower. Increasing the situational awareness of the employee base, and connecting people who know things, to people who need things creates innovation and effectiveness.
Organisations will also need to review external facing insights continuously. Anticipating how trends will affect customers and revenue generation now, and into the future, will ensure that investment plans and product portfolios can be shifted at the right time. This won't be just generic trend analysis. It will be founded on integrating direct exchanges with customers as part of the value bing delivered. The organisations that will be successful into the future will be looking for all opportunities to engage with and learn from their customers.
"Effective knowledge sharing practices mean that organisations are 46% more likely to be strong innovators in their space."
Fostering adaptability and building agility
Alongside maintaining customer centricity, there is a growing focus on the importance of building a learning centered culture. The priority here is establishing a workforce rooted in adaptive skills, which is able to keep building tactical skills that help the company stay agile and respond to market trends. Learning agility is fast replacing customer centricity as the number one priority for organisations. One of the core capabilities of this adaptive workforce will be a high level of AI literacy which must move beyond mere familiarity to understanding how to leverage and deploy AI models in day to day working life. Securing a meaningful understanding of how the human stays in the loop to build a truly technology enabled employee base is amongst the highest priorities. Organisations must invest in this skill now or risk falling behind.
By creating a more agile and adaptive workforce, organisations can build resilience to change, alongside avoiding the workforce redundancy that costs so much money due to roles that are no longer needed shortly after being hired.
"Learning agile organisations can quickly identify and seize opportunities, overcome obstacles, and achieve sustainable growth."
All dancing to same the rhythm
One important element that leaders need to give their attention to is creating the systems and structures (what we call the operating system) that enable people to work in a highly agile and focussed way. The operating system can easily constrain growth when they promote silos around key functions, or when each function is enabled to have its own way of working. Such things only serve to impede collaboration. In a fast paced working environment, where cross-functional collaboration is critical to success, and where teams form and disband quickly, it is increasingly the ways of working together (more than organisational structures) that drive efficiency and performance. In a resilient, growth system, businesses focus on setting up outcome-orientated cross-functional teams who all know how to collaborate within a clear and consistent operating environment. When employees have a similar way of working across departments, collaboration improves (due to improved communication and cooperation), and scale becomes easier. Common ways of working standardise the process by which work is delivered, whilst retaining high flexibility of people deployment.
"Companies must think rethink how they organise the most important parts of their business, setting up outcome-orientated, cross-functional teams with the right expertise."
A clear and coherent leadership culture
With markets moving so quickly, and the war for talent so strong, organisations need to intentionally create the culture within which people thrive and are deeply engaged. Gallup research demonstrates that positive, engaged culture delivers 21% higher profitability and 17% higher productivity than companies with disengaged employees, whilst Deloitte research finds that 94% of CEO’s believe that strong company culture is critical to success. Leaders are at the heart of this culture - they shape and define that culture every day by the things they celebrate and tolerate inside their sphere of influence. Culture will need to support fast decision making, resilience to mistakes and adaptability to change.
Organisational growth is often underpinned by securing and investing in a coherent organisational culture. Having a relentless pursuit of growth without a balanced development of the operating culture within which that growth is taking place often leads to an unsustainable organisational environment. Growth should not be seen as being fuelled by 'supply side' investments alone. Profitable long term growth will be found when the organisations build the organisational capabilities and culture that allow such growth to be sustained. Investments in training, processes, systems, technology and culture are a way to break growth bottlenecks and raise a company's sustainable growth rate. The leadership culture you have at your organisation - which we see as a combination of 'mission-ready' leaders, who understand the core business, market and ways of operating inside the business - will need to be intentionally cultivated if you will thrive in a time of disruption.
"Positive, engaged culture delivers 1% higher profitability and 17% higher productivity than companies with disengaged employees"
They will be masterful experience designers
Finally, the organisation of the future recognises they have two equally important experiences to design. The experience of the client, and the experience of the employee. It is an experience that continues to win out and create an edge to the value you can bring. We need to see ourselves as being in the business of designing and providing experiences. HBR research suggests that companies who invest heavily in designing and delivering superior customer experience generate higher lifetime value, increased referrals and greater long term profitability.
For your increasingly remote workforce, prioritising building a robust communication capability to ensure that everyone hears your unique company voice in the way you want them to will be key. Ensuring that the remote experience is supplemented by extremely well crafted ‘in person’ memorable moments will ensure you build your own sense of identity.
"Prioritising building a robust communication capability to ensure everyone hears your unique company voice in a way you want them to will be key."
Transforming to power your growth
One thing is clear, in order to stay ahead of the game, organisations will need to keep their own transformation at the forefront. Having a great product or service won’t be enough. If you can create the environment within which you empower your leaders at every level, where you people connect meaningfully, collaborate better, innovate bolder and adapt faster you’ll be putting yourself in a place where disruption will only play into your hands.
We’d love to help you and your organisation be bulletproof in this new landscape.