Thriving, Not Just Surviving
Uncertainty is the defining characteristic of business competition today. Competing to thrive, not just survive in this volatile and complex economic environment requires a strong balance sheet to absorb the punishments dispensed by market shocks and to seize opportunities emanating from discontinuities. But balance sheet strength alone is insufficient. In our experience, thriving requires organizational agility. What is organizational agility? Agility is a company’s ability to systematically identify business opportunities, capture value quickly, build momentum, and scale seamlessly to imbed high performance. Many senior executives speak of and aspire to organizational nimbleness, but aspiration remains well ahead of practice. There are three critical elements to realizing organizational agility:
- Data Analytics
- Managing Talent as an Asset
- Execution Prowess
Data analytics enables companies to evaluate business options and decision consequences developed from a nuanced understanding of the customer, the market, and the industry. Senior executives are thereby able to make thoughtful, analytically driven choices despite complexity and uncertainty in the current business context.
Most companies recognize the importance of processing and mining data to gain insights into customer behavior, product innovations, market trend forecasts, customer service efficiencies, social media effectiveness, and many other areas of business performance. Large quantities of information have been amassed, and both proprietary and open-source analytic tools and platforms are widely available. However, businesses often proceed unsystematically and lack the necessary management and analytical skills to unlock the full potential of data analytics. Data analytics is mistakenly thought of as a technology initiative or a technical program. While technical savvy is necessary, extracting value from data requires a staff with advanced analytics expertise, namely, skills in data science along with a deep understanding of the business and ability to glean valuable insights.
Managing Talent as an Asset
Organizational agility demands resilient organizations that can adapt to many changes: influx of technology, the adoption of radical new strategies, rapidly morphing markets, geopolitical dynamics, and regulatory changes. This resilience, in turn, depends on having people on board who are able to quickly and effectively adopt new ways of thinking, working, and behaving. Business today is about building a highly adaptable workforce and habituating high performance in the people who work in every function, region, and business unit of the company.
The need to pay attention to the value of human capital and to build a diverse and flexible talent pool strategically in anticipation of future needs have never been more compelling. For the foreseeable future, recruiting, cultivating, and managing talent as an asset will remain one of the top priorities for organizations in both the private and the public sector.
Insights into incremental or game changing opportunities are exciting, but the value of these insights lies in being able to quickly and seamlessly monetize these insights. Many companies never get beyond the initial strategic insight because they languish under the weight of organizational resistance or fail to translate insight into a feasible action plan. Execution prowess is an organization’s ability to turn insights into a set of bold moves and then creating the momentum necessary to make those new initiatives take hold. A rigorous development of a customized implementation approach unique to the culture, issues, and opportunities of an organization are imperative. Furthermore, critical decisions will need to be made about capabilities—does the company have the required skills to execute? If not, how will it acquire it?—and about sequencing—what sequence of moves is most likely to lead to success?
In our experience, companies that have built execution prowess as a competency focus on the following areas:
Customer. Customer centricity is the central tenet of all initiatives. Which customers are we targeting and what is the value we are delivering to them?
Process. Eliminate process complexities by streamlining the organization to prevent turf wars and resistance and to encourage collaboration. The business design is reshaped to ensure it supports the new strategic thrusts.
Performance management. Exercise discipline to establish performance management methodologies and process accountability. Clear and appropriate metrics are developed and each set of metrics are tailored to the distinct drivers of economic success. A top-down cascading of goals down to units responsible for outcomes ensures goal alignment, drives toward a defined end-state, and facilitates institutionalization of best practices sharing across the organization.
Leadership. Leaders make critical decisions amid rapid change, set a strong course for the company, inspire the workforce, and keep employees focused on business objectives. Leadership is a major factor in whether a company emerges as a winner as opposed to a wisher. Strong leaders recognize that volatility represent opportunities to break ingrained structures, orthodoxies, and behaviors that sap the productivity and effectiveness of organizations. They develop both the organizational will and the skill to chart a new course to drive high performance.
Thriving, not just surviving during uncertain times requires organizational agility. Achieving agility demands a shared understanding of market realities, data-driven insights into potential opportunities, and a talent portfolio and organizational competency to execute with speed and precision. The future will belong to companies that invest in building the muscles to be agile and that nurture the resiliency needed to deal with whatever the world throws at them.
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