The future belongs to Adaptive Organisations

What organisations will survive and thrive in the future?

Adaptive Organisations

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Business digitisation, shared economy and deglobalisation are some the most important long-term trends bringing massive change to the way society is organised and works. Traditional approaches to business planning and management are increasingly ineffective. Businesses, small and large, need innovative ways to think about their strategy and operations. They need flexibility built in their structure.

Trend #1: business digitisation

The process of creating business revenue and value from the unprecedented combinations of people, information technology and things. Which enable people and organisations to buy goods and services in an automated way, with limited or no human interaction. To so they use devices like mobiles, tablets and PCs.

Business digitisation could refer to an established large company who: digitised one of more of its existing businesses, or a new one. Or it could refer to start-ups who sell goods and services in a digitised way from day 1.

Examples: established banks offering “robo advisor” services vs Nutmeg. (We think Digital Wealth Management is a better name for Robo Advisory.)

Trend #2: shared (sharing) economy

Originally an economic model where individuals or organisations provide access to underutilised assets via on online platform. Now a term that refers to a host of online economic transactions, including innovative ways to deliver services, such as taxi rides and workplaces.

Arguably, the model came about after the Great Recession that followed the Lehman collapse in 2008. People found new ways, leveraging platform (P2P) technology, to raise extra money in tough economic times to pay their bills.

Examples: Airbnb (shot term accommodation), Zipcar (car sharing), Uber (ride sharing), WeWork (start-up workspaces), and Funding Circle (P2P lending).

Trend #3: deglobalisation

The world is experiencing a period of diminishing interdependence between nations. Which are putting their interests ahead of shared ones. Trade and investment between them are declining. Similarly to the period after the first world war, which led to the devastating second world war.

This time it will not necessarily lead to a war, but leaders must resolve the widening rich-poor divide, which is driving nationalism. International trade and investment are being impacted by changes in trade deals and tax laws, among others.

Examples: Trump leading the US to exit international agreements, Brexit in the UK, Lega-M5S in Italy, and recently Japan’s restart of whale hunting.

SMBs vs larger businesses

Businesses, small and large, can take advantage of the many changes taking place today. However, they should not attempt to do so using traditional approaches to business planning and management. Those were developed in and for a stable and predictable world. There is anecdotal evidence that they never worked very well and that today they are in fact useless.

Arguably, this means that Small and Mid-sized Businesses (SMBs) have now an advantage over the larger businesses. SMBs are likely to be younger and less dependent on ‘legacy’ systems (including technology and management systems).

However, they should not try to grow or evolve by looking at what the larger ones did.

Adaptive Organisations

Businesses should think about their strategy and operations in innovative ways. They need to make sure they develop with flexible structures and systems. Very flexible ones.

They need to be (become) and remain Adaptive Organisations – “change-ready” organisations which grow or evolve, adapting to the fast changing world around them.

We identified five “behaviour’s” organizations should follow to increase the probability of successfully adapting to a fast changing world:

  • Robustly select the change that connect with people logically & emotionally
  • Treat change as an ongoing dialogue
  • Use experiments to explore future change possibilities
  • Engage the leadership community in the work of ‘change’
  • Apply execution disciplines to the change effort

(We have developed a tool based on these behaviours to help us help SMBs navigate their growth or evolution journey. However, it does not in itself provide any magic answers. It simply focuses businesses on what brings the right kind of strategic and operational change required to survive and thrive tomorrow. It is a “living” tool, one that itself will continuously change.)

Final thought

Yes, there will still be many challenges that businesses will face along the way to this brave new world. But if they rethink hard enough the way they plan and manage their future – and keep doing so as part of their business as usual – they will overcome those challenges.

 

We will discuss some of these points in more detail in our forum event:

Business planning in an uncertain world

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