Many businesses put a lot of effort into writing extended long term plans, short term plans and yearly targets. Unfortunately, nine out of ten times it lacks the answer to that one question that matters the most. What if everything changes with suddenness? What if you are completely disrupted? These things come up like a tornado and leave your organisation in a situation it – in this case- wouldn’t be prepared for. How can you make sure your business is prepared for almost anything and, at the same time, is able to drive innovation?
You cannot invent everything yourself. Obviously there are more people outside your organisation then there are in it. Last year I wrote about the importance of the role of a scout. To follow up on that, looking at current market circumstances and the growing importance of this scouting role, let me shine some light on some topics concerning organisational readiness. How will you be ready for the future? Any future for that matter.
I don’t need to deliberate on the urge of digital transformation and to stress the powerful pace of social and technological change. We all know that now. But although businesses are confronted with that daily, the pace in which they work on their agility is still too slow. The consequences are enormous, what implicates losing competitive advantage or be completely disrupted and out of business.
Organisational readiness is something that derives from three pillars: strategy, leadership and innovation. A competent scout has the capability to bring these pillars together with the right information. Based on that he can make adequate decisions, build a valuable business ecosystem and compile the right skills to enable growth and innovation – or enable other people to achieve this.
The target paradox: If you miss it, you have an excuse. If you make it, you probably could have done more. If you exceed, you end up with a higher target next year. So why do we have a target fetish?
A future proof strategy is not based on rigid year targets. Of course you need goals for steering. But change is the only constant, your organisation needs to be flexible. Don’t let targets limit your organisation in creativity and developing new bright ideas. Data and agility are the two essentials that will enforce a futureproof strategy.
Let go of Waterfall, embrace Agile
To ensure that employees work toward objectives and create opportunities, companies adopt all kinds of methodologies. Especially large organisations mostly have the Waterfall project delivery incorporated. Waterfall is a sequential process where each phase follows another. The next phase won’t start until the previous has been fully completed. This is the shortcoming of Waterfall, making it impossible to handle rapid change. An innovation killer, I call that.
Waterfall method does not provide much space for people to take a risk or make premises. If organisations want to drive innovation, they need to allow teams the flexibility to make assumptions that, eventually, may be wrong. People need to be able to do that in order to have new ideas spring to life.
Agile as asset light approach
So, to discover and test the potential of innovative ideas, organisation needs to implement Agile methods. When I talk about Agile, my approach is mostly focused on asset light business models. If you don’t own something, it’s not a balance sheet burden. Organisations need to make an inventory of their supply chains and rethink which capabilities they really need to own. What are your core activities and what can be operated via outsourcing? Therefore, you need to recognise the added value of your business ecosystem.
The agile approach makes any company change-able. On the one hand we have change: external influences like market circumstances, economic turmoil, competitors and customer demand. On the other we have transition. This is the change the organisation needs to go through internally in order to be able to adapt to new circumstances. Both forms of change have a huge impact and are manageable with Agile methodologies. Change-able means being capable to handle the different stages of change: define, set in motion, implement and sustain. The change-ability of an organisation is measured by the degree in which it’s changeable in direction. Crucial in times of digital transformation and disruption.
The recruitment factor
Most of the new generation of workers are not interested in working for businesses that use traditional development methods, because it doesn’t fit in their way of thinking. The article ‘Why Agile Is Critical for Attracting Millennial Engineers’ describes 11 reasons why Agile methods are a perfect match for Millennial engineers. Teamwork, trust and ownership are three very important factors that I think play a decisive role when it comes to innovation. Businesses that adopt Agile are more likely to gain a competitive advantage, in productivity as well as recruiting.
Leadership as the innovation engine
Regarding this new generation, another important reason for working with Agile methods is mentorship. The role of the traditional leader is no longer applicable in the digital era. Leaders need to become mentors. Something I was arguing earlier in relation to leaders in education and technology. The inevitable continuous change requires active leadership. This means leaders must participate and work along, not just sit in their office and have meetings.
Creative thinking still means ‘out of the box’, but needs to be more focussed on the ability to grasp any opportunity by mixing existing and new strategies to create value. Become your own disruptive force. Start by appointing a Chief Disruption Officer (CDO). For many organisations this would mean stepping outside the traditional hierarchy.
And they should. Exclamation mark.