With the fast-pace of change affecting markets around the world, how do you create an enterprise that’s able to adapt, scale and shrink according to market conditions; to re-equip on new skills and shed the old? Read more…
Markets in a constant state of flux
No-one could’ve predicted COVID-19, or its impacts on global markets. It is a truly global economic event that will change some markets forever. But how will they change? You might look upon market changes as something organic, but I believe the influence an external ‘shock-wave’ has on economies is massively influenced by the comparative reactions of governments and organizations. Bluntly, some organizations react and thrive, while others flounder.
- In the last few days, we have learned about UK pharmaceuticals companies becoming powerhouses in lab testing owing to the UK’s national crisis in testing for COVID-19. From a standing start just a month from now, brands like Glaxo-Smithkline Beecham (GSK) and AstraZeneca will have the knowledge and capacity to be global competitors in lab testing, to face-off against their German rivals Roche. GSK has gone a step further too, entering into a research collaboration with Clover Biopharmaceuticals, a China-based global clinical-stage biotechnology company focused on developing novel and transformative biologic therapies and a protein-based coronavirus vaccine candidate.
- Amazon and Boots are today helping to “build from scratch” a network of new labs and testing sites across the country to facilitate the UK’s national efforts against the virus.
- Meanwhile, Mercedes Formula One is leveraging its engineering design skills by working with University College London engineers worked with clinicians at UCLH to fast-track a Continuous Positive Airway Pressure (CPAP) that delivers oxygen to the lungs of COVID-19 patients without needing a ventilator.
I’m sure companies that serve these markets today would be delighted to imagine that, after the tsunami wave of COVID-19 has ebbed away, everything will go back to how it was and these impressive companies will turn tail and go back to their previous markets, discarding all of the new assets, skills, know-how and resources they’ve mustered. We all know that won’t happen. Businesses grow and succeed by always being first-to-market, by being the movers and shakers, not the bystanders. The brands coming to the fore now are staking their claim in an unclear economic future. Next time the world suffers another flavor or form of an epidemic, these companies will be ready. Because they will be the new players of a relatively new industry.
The businesses I’ve described above are able to react to change faster. They can re-fashion their operations at a moment’s notice, bring online the knowledge and assets they need to get to market faster. They seemingly have ‘Rubber Walls.’
How do companies evolve their people, process, data resources and technologies to be in the Class of 2020? How do they become ‘Rubber-Walled Enterprises’, with the means the fashion their resource profile in-line with changes to
I did see this coming—no not COVID-19, I’m not sure anyone did–but the fact that, in my opinion, the future of business success depended on the ability of an enterprise to shape itself faster than its rivals to react to new market opportunities. I imagined a global event ‘like COVID-19’ and what it would take for organizations to weather the shock (and the after-shocks).
In my book, ‘Agilization-The Regeneration of Competitiveness‘ I wrote in 2004, I described the state an organization needed to achieve to become a digital leader as, ‘An organization that’s always willing and able to ‘fit’ its most profitable markets by gathering insight and using it to adapt and develop new business models.’
I’m not sure who came up with the phrase, but one of my colleagues at NDMC described it as the need to have a rubber-walled enterprise design that could shrink, scale, re-equip or release resources at a moments notice. Sixteen years later, we appear to have reached a period in our history, where this new reality has come to pass.
What it takes to become ‘Rubber-Walled’
Back in 2004, sitting in my tiny home-office writing my first book, I envisioned the need for organizations to re-think how they created perpetual agility in their organizational design; it’s resourcing (i.e. people), technology architecture, approach to change etc.
I concluded through my interviews and research with technologists and industry leaders, in Europe and the United States, that what was needed was for attitudes towards ‘change’ to be completely re-wired. Instead of thinking as change as an infrequent thing–i.e. the proverbial 3-yearly Re-Org–leaders needed to equip their enterprise to embrace change as a continuous process, with its own department function, resources, and protocols.
It’s why I coined the term ‘agilization’–to make agility a process.
I identified a series of ‘new ways of working’ that organizations would need to adopt to become leaders in ‘first-to-market’ capability. Amongst the ideas in the book I included the need for organizations to:
- Transform how resources are contracted, moving away from full-time contracts towards an on-demand workforce
- Work with knowledge portals able to bring ‘seekers and solvers’ of knowledge together
- Install agile codeless software platforms to allow applications to be created on-demand without the delays and costs associated with coding
- Adoption of cloud technologies (and now blockchain) that would create federated markets beyond the firewall
- Action frameworks that would bring more control and governance over how organizations align effort to outcomes
Of all these heady topics, perhaps the most impactful was around workforce management and planning, chiefly because it represents the biggest cost to most businesses and installs the greatest level of inflexibility in organizations to transform.
How do you Rubber-Wall Your Resources?
Never has there been more opportunity for organizations to design their organizations in such a way as to minimize inflexibility in their resourcing models and maximize their ability to adapt faster than rivals to be always ‘first-to-market.’
There are lots of ways organizations unknowingly build rigidity into their organizational design. These include:
An over-reliance on full-time employment contracts
When organizations adopt a ‘full-time first’ policy to resourcing, it creates a necessity to manage long-term relationships with employees that makes it difficult to adapt, scale ad shrink at a pace necessary to maintain an optimal balance between market needs, business model designs, organizational designs, and resource skills and capacity. The solution to this is to install a Program Management Office (PMO) to constantly revising resourcing demands, starting from within the boardroom as strategies are devised. In the reality of most organizations, selection of resources happens ‘after the fact’ at the department level with very little expertise, planning or control over the consideration of best-fit resourcing options.
Today there are many ways to get jobs done, including:
- Full-time employment contracts
- Contingent / Indirect workforce solutions
- Contract workers procured against a project Statement of Work (SoW)
- Gig workers procured via a micro-task market
- Knowledge markets
- Software robots
- Various forms of AI-driven online subscription services
Hierarchies focused around operational departments, not outcomes
The most common organization design takes the form of an executive board built up of departmental leaders underpinned by the operational silos they run.
The theory of constraints (TOC) is an overall management philosophy introduced by Eliyahu M. Goldratt in his 1984 book titled ‘The Goal’. A pre-cursor to ‘Agilization’, it was one of the first management books geared to help organizations continually achieve their goals. Even as far back as 1984, Goldratt identified that operational silos were a contributor to operational inefficiencies and the most corrupting factor in attempts to grow organizational agility.
Use of job descriptions
Job descriptions articulate the job a departmental leader expects a worker to perform. An instrument of the ‘Mechanical Age of Management’, job descriptions treat work as if the human is going to slot into a role like a cog in a big data processing machine. They focus on the characteristics of work to be done and completely ignore the potential of the individual being employed.
Every person an organization employs comes with a history of experiences, qualifications, and a unique personality. Many of their experiences will not have related to their work-life but may play a considerable role in shaping the acumen of the individual. For example, they might’ve begun life with very humble beginnings, been a Cub Scout Leader, learned how to speak Mandarin at an early age; or they could’ve transitioned from a career as a teacher before moving into the world of enterprise. All of these background experiences may contribute to their ability to lead projects, possess startling amounts of activation energy, and to know what it takes to get jobs done!
Annual appraisals take a snapshot of an individuals’ performance once a year. In a world where change happens all of the time and most workers operate within a project-oriented ecosystem of teams and jobs to be done, an annual appraisal does almost nothing to stimulate, coach, nurture and train individuals into performing at a higher level.
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Today, most organizations depend on their staff to build leadership into every layer of their operations. No longer are humans mechanically adding data into computers, or acting as mechanical data processors. The high cost of labor and advances in computing mean that the role of humans is both TO THINK and TO LEAD. Coaching leadership skills and ‘get the job done’ behaviors into the workforce demands a perpetual review cycle (normally once fortnightly or once a week). Generally, these appraisals take the form best described as a mentoring and coaching session led by the worker themselves. Coaching methods like G.R.O.W. are increasingly popular as an approach to achieving the best results.
Adoption of IT systems that doesn’t adapt
Enterprise IT software has been developed around static prep-programmed applications that don’t adapt to change. The high cost of change (and complexity) means organizations cannot afford to change systems regularly, even if they had the skills and capabilities to do so.
The high cost and inflexibility of legacy enterprise IT software has led to the emergence of modern cloud-based High-Productivity-application-Platform-as-a-Service (HPaPaaS) software platforms in the last decade. These Low-Code or Codeless solutions equip organizations with the skills and tools to create and adapt business applications to keep them always in-tune with business plans and process enhancements.
An ignorance of the importance of agility in senior management teams
If leaders don’t identify agility as a business-critical construct, then it doesn’t appear as a priority on boardroom agendas. Like all aspects of enterprise management, it takes investment and pre-planning to make agility work. Without a commitment to agility, it normally gets ignored.
A limitation in mechanisms to track customer demands and emerging market needs
Few organizations have a clear ‘early warning system’ approach designed to help them identify changes in their market-place and afford them the time and opportunity to respond with enhanced products and services. The rise of ‘big data’ and cloud computing technologies make it easier to monitor customer and market behaviors, but it’s still not easy to get right – and it can cost lots of money to do well.
Organizations able to gain some oversight or ownership over the operating ecosystem their customers use–like LinkedIn, Google, Microsoft, Zoho, Spotify, HootSuite, Facebook, Netflix, Apple, AirBnB, Glassdoor, TripAdvisor, and Amazon to name just a few–are best-placed to identify and act on market opportunities as interest or new demands emerge.
About the Author
Ian Tomlin is a management consultant for Workspend Inc., specializing in workforce management, digital transformation and organizational design. His business books about organizational agility (‘Agilization’), social cloud computing (‘Cloud Coffee House’), and the future of enterprise computing (‘Social Operating Systems’) can be found on Amazon and iBooks. Follow him on Twitter or LinkedIn.