(6 mins read)
There have been many disruptive moments in human history: taming fire, the Industrial Revolution, the discovery of electricity, space exploration, and more recently, the digital revolution. In retrospect, one can say that these moments are like sparks, fast and disruptive. However, if we go deeper and analyse all the changes from the past, then we see that every disruption was a process that took years.
All companies operate in comparable circumstances; they are supporting the same customers, they use the same budgets and resources. If this is the case, why do some companies make use of disruptive times to build stronger operations and success and why do some fail?
Certainly, you have come across business cases of companies like Nokia, Kodak, or BlackBerry. A common denominator for them is that they missed the opportunity to capitalise on these disruptive changes and lost market position, becoming a small player or, eventually, disappearing.
On the other hand, there are many examples of companies that have been created or adjusted to changing market conditions and built successful business models. Executives from Apple, Tencent, Samsung, Playstation, Tesla and many others, reacted properly to market disruptions and they were able to build successful businesses.
Nowadays, all companies run their business operations within the same economic environment and with almost identical resources. We can list these resources: consumers, products, supply chains, quality, and budgets. It is increasingly difficult to differentiate from competitors. Innovation is one of the key strategies, practised by Microsoft, SpaceX, Pfizer, Moderna and recently OpenAI (ChatGPT). The challenge is that innovation does not happen every day and requires a significant investment in technology or research and development. Not all companies can afford it. There are a few other strategies, however, I wanted to focus on today, something that is within an arm’s reach for each agile leader: The FUTURE READY process.
There are four steps in the Future Ready approach:
- Analyse external market conditions and the company’s current and future portfolio to develop strategy,
- Develop an agile organisational design that will support the strategy,
- Based on the desired organisational design, identify the required competencies and skills, which will help you to select and develop or attract the most suitable candidates,
- And, finally, develop new ways of working and cultural attributes that will enable the business strategy.
Now, let’s go a bit deeper into each aspect of Future Ready thinking.
First, you need to understand the strategy with all its details. Call for a meeting where leaders, finance, sales and marketing, production, supply chain, and all supporting functions discuss and fully understand the market conditions. Engage in an open dialogue with all leaders and ask several key questions:
- How are the market conditions changing?
- Is there any new technology, new supply chain options, new products or new competitors disturbing the market?
- What are the needs of customers?
- How do your key competitors do their business? Is there anything you could learn from them?
- How could you work more efficiently?
It’s important that you run an open and honest discussion with all leaders. Include people from different parts of the business. A key advantage of running an inclusive discussion with a diverse team is that you will anticipate and discuss all potential black spots, bottle necks, traps, etc. If needed, run a SWOT analysis for your business to review key Strengths, Weaknesses, Opportunities and Threats. If your organisation is good, challenge your team and work out how to make it great. If your organisation struggles or there is a perspective that there are many untouched market opportunities, think with the team how you could improve or re-shape your strategy. Don’t rush! Take as much time as needed because this is the most important step in the entire process.
Once executive leaders understand the strategy and there is also an understanding of the market and future customer needs, then you can move to the second stage: designing the agile structure.
There are two scenarios for reviewing your structure: EVOLUTION and REVOLUTION.
With an evolutionary approach, you will be able to work in a smooth way. Print out several copies of your current structure and, together with key stakeholders, analyse the structure you currently have. Look at it through the lens of the organisational design principles you developed when you first analysed the strategy. Do not be afraid of playing a bit with options, variations, and scenarios.
A revolutionary approach is more challenging and disruptive to your operations because you deal with ambiguity, using open-mindedness, and with it are more innovative and creative. You need a blank piece of paper, a pen, and a big pot of tea. Use this blank page to draw a brand-new structure, not anchored in the past. You will not play safe, your brain and creativity will have fun in the future.
The are some generic rules for both approaches:
- Watch your levelling and avoid creating too many levels; it will slow the decision-making process in the future. Lean and agile organisational design will speed up the decision process and will drive empowerment.
- Review the span of control, which is the number of people reporting to one leader. A person cannot be a manager for one, two or three employees only. One leader should have between five to eight direct reports. There are some homogeneous teams, e.g. production, warehouse or sales force, where people have similar roles and responsibilities and in such situations the span of control could be around 10 people reporting to one manager.
- Focus and strengthen customer-facing roles or customer-supporting teams. Outstanding and professional customer support is what you need the most.
- Every decision on structure and resources has an impact on costs. Your key task is to design an organisation that will support your strategy in an optimal way. It cannot be too big, because the business model will not generate profits and it will be not sustainable from the P&L perspective. It shouldn’t be too small either. People in such an organisation will be stretched, and executives will be dealing with overtime, burnout, and finally retention issues.
- Always! Let me repeat it… Always, ask yourself a question: “Would I set it up if it was my private company?
The five simple but powerful rules above will help you in the process of designing an optimal organisation.
When a new structure is finalised, as a next step, you should engage with talent teams. Call a meeting and explain the new strategy and structure. Focus on what skills and capabilities will be needed in the future. In many cases, discussions and decisions on skills and capabilities take place when you design the structure. Don’t try to cover all areas but focus on the most critical areas only.
Later, during every single recruitment process, stay close to the recruiters and hiring managers. Ensure they do not compromise, hiring talent with the skills and the capabilities you need.
Do not forget about people you already have in the organisation. Organise another session where you will present the new strategy and structure to them. Answer all their questions to secure an understanding and buy-in from the entire team. If necessary, conduct a skill-gap analysis and develop an upskilling plan, helping existing employees to strengthen or develop future skills and capabilities.
Finally, there is the last, but the most important step in the process: CULTURE. I am sure you have heard the statement “Culture eats strategy for breakfast!” Do not ignore it, it really works like that. You could have a great product and market strategy but not the right culture; then you fail. Engage with the entire organisation and discuss cultural attributes you want to see in the organisation. Do not just present slides; use storytelling, real life examples. And finally, be a role model. People are watching you act like a leader and they check every second to see if you walk your talk. If you speak about accountability – do not miss any deadline. If your motto for the next year is collaboration – challenge the silo mentality. If the company is going to be extremely cost-conscious – consider commuting to work by public transport or by bike.
Following this four-stage process will help you to build an organisation which will be future ready.
Leave a Reply