11 August 2017
Claus Rydkjær
Hyper-agility and multi-speed business are concepts that leaders of the future must understand and apply to be able to deliver results in a world that is constantly changing. Read on, and learn more about the requirements of future leaders.
We all recognise that the world is changing, however, the tremendous speed at which it is changing is new. On the political scene, within the past 12 months we have seen an unexpected Brexit and the election of a new and quite controversial American president. The Russian trade embargo and the economic slowdown in China are affecting both global and local economies. We are experiencing a global flow of refugees and an ageing population whilst having to deal with accelerating technological development and the impact of robotics and AI. These global trends affect all businesses in unprecedented ways, now more than ever before.
All organisations need to deal with digitalisation. There is no way around it. However, even if digitalisation is essential, it remains a half-truth to claim that all companies are digital. I would argue that we are still equally analogue. For example a bank still has branches and traditional banking systems, whilst at the same time we all use internet banking. In addition, banks are digitally advanced when it comes to software robots. Thus the banking sector must relate to three different realities. These different realities are the focal points for leaders of the future. A business must be able to relate to multiple realities at the same time across the organisation. These realities are developing at different speeds.
In the “old” days, before 2005, linear business planning worked well. These days, however, we are moving slowly into something new, because organisations must be developed in different ways and at different speeds. This applies for example in relation to innovation. Where we previously saw very heavy and rigid structures within research and innovation, we are now experiencing a softening in direction of staff-on-demand or so-called liquid organisations.
A good example of this kind of organisation is found in a recognised European financial institution. Instead of continuing to develop its own algorithms they chose to post them as competitions on a giant online market place for developers. These developers then solved the tasks in parallel with the internal organisation. To date, the internal organisation has still NOT developed the best algorithm. This particular financial institution simply transformed the way they worked with innovation and by doing so opened the door to an abundance of external knowledge and ideas.
The vast majority of organisations have previously practiced a one-size-fits-all approach to leadership. This approach is slowly dying. The digital natives now entering the labour market, make it challenging to lead all employees using the same approach. This new generation thinks significantly different and are motivated by different factors. Many organisations have learnt this the hard way, experiencing attrition rates of up to 35-40% among graduates compared with the more traditional 10-15%. The digital natives are harder to retain with a traditional mind-set and a one-size-fits-all leadership style. This poses the same challenge, namely to lead in organisations that operate at different speeds, which requires its own unique mix of organisational, governance, leadership and cultural capabilities to succeed.
Many organisations are conscious of the challenge that moving at different speeds brings. They have however, not yet determined how to manage the complexity of this situation. At Mannaz, we have introduced the concept of multi-speed business, which covers organisations where the analogue, traditional business continues to operate as the stable part of the organisation, whilst other parts of the business operate at various speeds and have a significantly different culture.
“The leadership style must therefore be more agile. We refer to this as hyper-agility. Agility is a term often associated with project management, however, we interpret this approach much more broadly.”
What does multi-speed business mean for future leaders? It means leaders must apply different decision-making criteria in the traditional part of the organisation compared to the exponential part of the organisation. The leadership style must therefore be more agile. We refer to this as hyper-agility. Agility is a term often associated with project management, however, we interpret this approach much more broadly. Hyper-agility is a leadership approach, which applies across all dimensions of the organisation in terms of innovation, governance, decision-making as well as culture and mindset.
Working with hyper-agility, however, still requires alignment in the system, just not with a one-size-fits-all approach. Behavioural culture and mindset must be adjusted to the particular speed with which that department is working; to both operate effectively and avoid uncertainty arising among employees.
So how should we organise our business to keep up with this rapid development? Structures as we know them today are disrupted and we must be able to adapt and organise ourselves differently within the same business. What made us successful yesterday will be gone tomorrow. There is minimal relevant experience to lean on. Therefore, in the future we will lead by defining direction, and not KPIs as we used to. We must give our employees the space to find their own way.
A business in China had stagnated in terms of innovation and growth. To change this, the organisation was reorganised into 2000 self-managed units, each devoted to a customer – a retailer or group of retailers and assigned full decision-making authority. The units were assessed as individual businesses. A direction and a playing field for deliveries were defined and a greater extent of adaptability in the production facilities were introduced, but other than that, it was up to the independent teams to engage with clients, listen to specific client needs and produce accordingly. Within 12 months the company experienced significant growth.
The above is of course a rather extreme example; however, the leadership approach of leaders of tomorrow must be sufficiently agile. Leaders must set direction, define the playing field and act in a supportive manner, and employees must be proactive and take responsibility. At the same time, we must be able to lead very different types of employees from the digital hacker to the classical engineer.
If companies do not proactively embrace this new reality, their foundations will crumble. Typical signs are poor retention of the young generations, the traditional business diminishes and a lack of innovation leading to future business opportunities. Hyper-agile leadership is key across all dimensions of the business. The leaders of tomorrow must find ways to adapt their leadership style to this new paradigm to be able to stay relevant in the future.
Read our other instalments in the Mannaz Multispeed Series:
