Speed, fitness, flexibility, resilience…words more often used to describe a world class athlete than a business organization. By all accounts, the 21st century is bringing a frenzy of innovation driven by the continuing digital revolution and expanding global markets. This environment of accelerated uncertainty and change is not going to blow over and settle down…ever. A quick read of Thomas Friedman’s best-selling book, “The World is Flat,” will give you further perspective of turbulence that lies ahead. This is the era of “turbo turbulence” – more and faster than ever!
What Concerns You?
If you are like most business leaders and CEOs today – one of the main challenges you face is how to get your organization to sense and respond to those unpredictable forces of change (customers, consumers, suppliers, regulators, etc.) more quickly and reliably than your competition does or your customers expect. Recent studies by McKinsey & Co., The Conference Board and the American Management Association consistently highlight that the top one or two challenges facing CEOs today is how to make their organizations more nimble, adaptable or our preferred term … AGILE!
The July 2006 McKinsey & Company study of 1,500 global executives overwhelmingly reported an “urgent need to increase the agility and speed in their organization” and that many executives around the globe are already “trying in various ways to do so.” In fact, almost nine out of ten executives reported the need for agility as either “extremely important” or “very important” to their business performance and 86 percent said the same about speed. Agility was defined as an organization’s ability to change tactics or direction quickly – that is, to anticipate, adapt to and react decisively to events in the business environment. Speed was defined as a measure of how rapidly an organization executes an operational or strategic objective.
Every year, we find new examples of companies and products entering our life as consumers introducing new capabilities and benefits that we didn’t even know we needed! Then, before we know it … we can’t live without them. How long has GoogleTM been part of our lives? A recent report declared Google as the world’s most recognized brand! Could you imagine life without a search engine?
Finding the Speed and Agility You Need to Survive
What have your competitors been doing to enhance their adaptability and responsiveness? How can you get your organization to use fresh, innovative thinking and to anticipate change rather than simply reacting to it? How can you create a more decisive, responsive organization where initiating action is a smooth reflex and not an ordeal? The challenges and barriers to a sustainable transformation to an agile enterprise include behavioral, attitudinal and organizational dimensions that are woven into the leadership and cultural fabric of most organizations.
Based on years of research and experience along with collaborative work with the likes of CIO Magazine’s AGILE 100, the Human Resource Planning Society (HRPS) and Cornell University, the answers begin with an objective and candid self-assessment of the three key enterprise domains: your people, processes and technology. Creating and sustaining a truly agile enterprise requires all three of these arenas to reach a high standard of excellence – it is not enough to rely on good people or the latest technology. The bar is raised higher each day and you must deliver on all three fronts if you expect to be successful today and tomorrow.
Based on research and best practices in the area of organizational performance, the AGILE ModelTM was developed and reflects core dynamics of the five critical drivers of organizational and strategic agility: 1) anticipating change, 2) generating confidence, 3) initiating action, 4) liberating thinking and 5) evaluating results. Each of these key drivers involve important organizational processes and speaks to specific and important implications for individual leadership behavior – which is the key to the overall agility equation.
Anticipating Change in Your Business
So, what’s next? Just when it seemed that you had recovered from the last tsunami that rocked your world, here comes the next. We all are accustomed to the mantra of the 21st century by now: Change is the only constant we can expect.
Winning organizations and leaders have already translated this reality into fundamental changes in how they do business and/or lead their organizations. While we Americans still hold on to the eternal optimism that things can get better through hard work and resourcefulness, competing in today’s turbo turbulent world requires new paradigms for guiding the people, process, and technology direction of your organization or business to sustain success in this new millennium.
Ours is the era of the agile imperative, where best practices must yield to next practices as we strive to discover how to effectively adapt and thrive in this real-time, fast-paced and ever-changing world.
Understanding the Forces of Change
As the pace of change accelerates around us and becomes increasingly unpredictable, the need for improving our visibility on the forces of change is an important place to start. Understanding your forces of change along with the trends and dynamics driving their behavior helps in your effort to anticipate change.
As one who enjoys sailing in the islands, a seasoned captain must always be alert for the potential forces of change that could affect smooth sailing and the safety of the crew. If you know where to look, there are many signs to monitor, such as changing color of water ahead, behavior of other boats around you, wind and depth gauges, cloud formations, and even the behavior of the birds. A good captain also monitors the conditions on the boat: Crew readiness, sail trim, engine performance. Not all forces of change are external to our organizations, and the key is monitoring the right things.
Keep Your Eyes Open
Each and every organization has a collection of critical forces of change. The list generally includes your customers, the consumers of your products or services, suppliers of your raw materials, government regulators, competition and your current and potential workforce. You will improve your capability for anticipating the change that rocks your world by taking inventory of the trends occurring with each of these forces of change and understanding how those trends affect you and your business.
Just like the tell-tale yarn often tied atop the mast to show the captain the wind direction and shifts, what monitoring system can you put in place to give you earlier visibility on trends or actions that will affect your success model? At its most basic level, anticipating change is much like we teach our children as they learn to drive: Don’t just watch the car in front of you; watch the car that’s in front of the car in front of you.
Creating an Adaptive Capability
A good example of adapting your focus and strategy can be seen at Greensboro’s VF Corp., the world’s largest apparel company. The apparel industry, similar to many other industries, has historically been highly retailer focused. This is not necessarily a bad thing, except that as the tastes and trends of the end consumers began changing with more emphasis on lifestyle, those companies that kept their focus primarily on selling in product to retail customers began to lose out to those organizations who shifted and strengthened their abilities, resources, and business processes to better understand consumer forces of change and enhance their skill at anticipating evolving direction. Mackey McDonald and his team at VF made a definitive and strategic shift towards consumerism several years ago, which has been one of many reasons for the continued profitable growth of the organization.
Recognize and Monitor Change
There are so many new developments occurring in the technology world that are simultaneously giving us the ability to recognize and monitor change while at the same time contributing to the rapid revolution around us. Technology availability, portability and access have collapsed our world into an interconnected community where new trends and solutions occur at the speed of Skype or the next blog. New and old businesses skyrocket or crash as a result of the rapid networking and mass communication connections embedded in MySpace.com or FaceBook.com, with more to come.
New technology begets new technology and the speed of change increases. We could go through a long list of the new technologies that change the rules of old concept (such as a Sling box for your TV), but the list would be too long and almost obsolete before we finished. Our first challenge is getting ourselves to accept that change is inevitable, so we must get comfortable with that reality and set our sails on becoming a master of change, rather than a casualty.
Generating Widespread Confidence
Think back to that special moment in your life when you felt your most confident. How did that moment come about and how did you feel in that moment? People often describe those special moments with words such as proud, strong, capable, satisfied, invincible, and committed or ultra motivated — all positive and encouraging words. When asked what led to that feeling of confidence, people often mention a special person or mentor who has helped them believe that they were worthy, talented or capable enough to succeed. Who was responsible for creating that moment with you?
My 16-year-old son, Kevin, recently spent two weeks as a small-group enabler with middle-school age students attending Massanetta Springs Youth Conference in Virginia, and returned a noticeably more confident and self-assured young man from this environment of total encouragement, energy, and support. He was able to step out and take a leadership role doing things he had never attempted before. Just imagine the level of employee commitment and productivity that would result if we could duplicate that kind of environment inside every organization.
Winning Organizations Generate Confidence
Whether it is a business or sports team, there is ample evidence to suggest that successful organizations share a stronger sense of confidence and commitment to their missions, leadership and team members. Rosabeth Kanter, a highly respected Harvard professor and author, describes confidence as the cornerstone of success within winning organizations and leaders from all fields in her recent book, “Confidence.” There appears to be at least three key dimensions to this notion of generating confidence that might apply to an organization: Line of sight, unconditional respect and positive optimism.
Line of sight is a clear awareness and understanding of team members’ responsibilities and how what they do affects the success equation of an entire organization. It helps create a sense of connectedness for each person in the organization, and is part of the nuclear fuel that drives employee engagement, customer loyalty and ultimate profitability.
The Power of Respect and Positive Optimism
Respect is a core tenet for employee engagement and generating confidence. It is commonly known that one of the main reasons workers vote for union representation is a perceived lack of respect from management. Unconditional respect embodies a higher level commitment to a set of core values around unbiased fair treatment of individuals, as well as a shared accountability for the team wherein leaders set the ground rules. Bob Seelert, former CEO of Kayser-Roth and the world class advertising agency Saatchi & Saatchi, has set an example of communicating respect for all employees by actively sharing the business’ vision and roadmap with all employees, and asking for their active involvement and help in making that vision a reality for everyone. Acknowledging the value everyone brings to the mission and communicating how they contribute to success … inherently communicates respect. People count … and people need to know they count to leaders.
Positive optimism is a sense of possibility that drives entrepreneurs and others to accomplish great things. There is ample research demonstrating the direct value of optimism for improved
organizational performance, as well as enhanced personal health and happiness. Great leaders fuel organizational optimism with continual encouragement and support for climbing to higher levels of achievement.
As an example, High Point University in High Point, North Carolina has certainly benefited from President Nido Quebin’s positive optimism. Quebin has brought his long-term commitment to leadership and motivation in business to help this institution raise the bar – beginning with expectations. Along with optimism comes accountability. If you want to be the best, then you must expect the best.
Generating confidence often represents a leadership responsibility that cannot be delegated, especially when things become challenging. Helping organizations become more agile and resilient depends on leaders who can continuously stoke the confidence fires inside all employees. Confidence leads to a winning culture, which can lead to a legacy of success — but it begins one person at a time. How are you doing?
The Tao of Execution
“Fire, Ready, Aim” is rapidly becoming the action sequence of leaders today as the pace of daily decision-making demand outstrips the readiness of some leaders and organizations to respond. The heavy pressure for real-time responsiveness to the complex needs of customers, vendors, regulators or employees is causing many leaders to increasingly respond before they are ready.
CEOs around the globe are aggressively attempting to change this action sequence and determine new ways to become more agile. Being agile means being a master of change poised to seize upon opportunities and initiate innovation. How fast are the rules changing in your market? How innovative or opportunistic are you today? Are you able to respond fast enough to win and grow?
According to Wikipedia, Tao is a 500 B.C. Chinese symbol normally translated as meaning wisdom for the “way” or “path.” A common theme in Taoist literature is that fulfillment in life cannot be attained by forcing one’s own destiny. Instead, we must become completely adaptive to nature’s path, because the only constant in the universe is change. The Tao of execution can be boiled down to three simple words: Focused, fast and flexible. They represent what we should strive for as the natural operating style for our leaders and organizations – if we are going to compete in real time!
World-renowned professor Don Sull of the London School of Business points to the importance of building adaptive capability for agile execution vs. relying on long-term strategy. His premise is that our future horizon has become so foggy with increased globalization, uncertain markets, hyper- cycle consumerism and periodic geopolitical instability that organizations are more likely to “win by focusing on building superior adaptive capability for agile execution and not rely on strategy alone.”
The fog of the future makes it essential that employees understand core mission priorities while leaders build adaptive skills to sense and respond, rapidly deploy and shift resources, plug and play, and perform other capabilities found in agile organizations.
No Substitute for Focus
Although there has been an explosion of technology tools to help improve personal and corporate productivity in this real-time world, there is no substitute for focus and the basic understanding of what differentiates your business. Oscar Monahan, senior partner at Greensboro-based A3 IT Solutions, emphasizes the importance of truly “understanding the core value equation and priorities” as the agenda for your business. Take Apple and its revolutionary iPod phenomenon, which was developed as a result of a continual focus on consumer lifestyles and a dedication to finding the important lifestyle related patterns and trends in lives and needs of its core franchise.
Focus might be the most overused and least understood word in today’s business vocabulary, yet it remains the largest lever for increasing speed and responsiveness. The 2006 American Management Association study, “The Keys to Strategy & Execution,” clearly demonstrates the high correlation between financially successful organizations and those with high ratings for “clarity of mission and message.” When leaders keep consistent focus on the vital few priorities and align the appropriate resources to match, the conditions for success are in place.
Why is Fast Important?
“The only dependable advantage is a superior capacity to reinvent your business model before circumstances force you to,” wrote Gary Hamel in his 2003 Harvard Business Review article, “The Quest for Resilience.” As we have already discussed, the world has become dominated by the real- time expectations of consumers and customers worldwide. We all expect to have it our way – all the time, and increasingly via self-service. We should expect this trend to continue and expand throughout the business-to-business world, and to be one of the forces driving speed and the future need for reinvention of many of our business models. Fast is important because our customers and their customers continuously expect and demand the next innovation that will contribute greater value and/or convenience.
Organizations that are able to adapt and adjust like a NASCAR driver weaving through a crowded track will be well-positioned to succeed. In his new book, “The Age of Speed,” Vince Poscente suggests that “in order for organizations to become faster and more aerodynamic, they must identify where they have drag.” What are the factors causing resistance to speed or drag in your business?
The Flexibility Model
Organizational flexibility and resilience are important qualities to be able to sustain competitiveness. These characteristics emerge in organizations where leaders consistently reinforce and build a culture that has an expectation for organizational agility as well as continual communication of mission, values, and feedback to all associates about success as well as where corrective action is needed.
When employees understand an organization’s mission and experience the empowered freedom to act in positive pursuit of excellence, they will find the adaptive solutions or paths to success and will
live the Tao of execution as well. The benefit will be the delight of customers, shareholders, co- workers and ourselves as we operate with greater harmony and success.
Evolution is a concept that has been in the background of our existence for centuries. It carries different meanings in different circles, but normally suggests a gradual transformation or positive adaptation to improve the chances for survival or quality of life. In fact, the Encarta Dictionary defines evolution as “the gradual development of something into a more complex or better form.”Our species and society have operated in an evolutionary mode for centuries. We now find the slight addition of the letter “r” changing the tone for the future. Yes, revolution is more descriptive of the pace of change we see for the years to come. That pace of change feeds off itself as new technology enables new possibilities.
The Nature of Reinvention
Ask anyone who has been responsible for running a business or supplying consumer products to retailers such as Wal-Mart, Sam’s Club, Target or JC Penney, and they’ll tell you that you had better be inventing your next innovation even before you’ve launched your latest innovation on the retail floor. Retailers and consumers have an insatiable appetite for new, better and faster products, generally at lower prices.
How can we survive with this expectation for continuous change and reinvention? The real question to answer is how you’ll survive if you do not create the culture and expectation in your organization for this kind of fresh, innovative thinking. Indeed, the world has become flat and we see new ideas and better products coming from all corners of the world. One of these days, we might even see them coming from beyond our planet.
The Power of Liberated Thinking
The value of creating an engaged workforce with suggestion boxes and idea farms has been taught in business schools and conference rooms for decades. Yet we still do not see the widespread adoption of liberated-thinking cultures throughout business in the U.S. Yes, there are many isolated examples of companies trying new things. Even IBM Corp. recently received acclaim for some of its new efforts to harness the power of liberated thinking throughout its vast organization. The company has initiated a new and clever collaborative problem-solving and innovation system that links its thousands of associates together through the power and convenience of technology to focus collective energy on real-time solutions to chronic issues.
In its 2006 Global CEO Study, IBM discovered that the No. 1 critical roadblock to successful innovation is an unsupportive culture and climate. The flipside also applies — the primary enabler to successful innovation is a supportive culture and leadership climate. When we expect, recognize and reward fresh, innovative thinking, we tend to get more of it.
The reality of our times is the idea of constant demand for new solutions as the bar gets raised and new expectations rule. Organizations that create the expectation and permission for all levels of
employees to participate in the innovation process will reap the rewards in the long run. I recently attended a panel discussion that included John Cawthron, the 64-year-old Chairman and CEO of TIMCO Aviation Services in Greensboro. The cigar-chomping turnaround specialist from Waco, Texas, shared some of his priorities from when he was asked to come lead this major player in the aircraft maintenance arena. He spoke of his efforts to meet with employees on all three shifts across their locations, and to put in place a genuine appeal for employees to offer up their ideas and suggestions so that the company could become better and stronger.
As it turns out, at least one employee was listening and sent him an e-mail with an idea so simple yet so elegant that it saved the company approximately $900,000 per year. It was a blind flash of the obvious once they thought it through, but they granted the long-time employee 5 percent of the savings — or $45,000 — for surfacing the issue and solution. The company then split the remaining savings between itself and Boeing Co., its beneficiary customer. That demonstrates a commitment to creating a climate inviting fresh thinking, as well as a respect for employees and the relationship among strategic customers. It is that kind of culture that will define winners in the future.
Evaluating Results in a Real-Time World
Yes, there is truth in the old business proverb — what gets measured gets done! Yet, one of the many challenges business leaders face in today’s fast-paced, change-driven world is determining the “what and how” in measuring relevant organizational performance. Traditional outcome metrics — such as sales, profits, costs, employee retention and even customer satisfaction — are important. If they are the only performance measures in your scorecard, however, then you are navigating your enterprise by looking out the rear window.
The pace of change, rampant innovation and rising customer expectation at all levels demands a different and more fluid approach to performance measurement.
Dashboards for Focus
For those who may not be familiar, a business dashboard operates much like one in your car — digital gauges linked to various parts of the car’s operating system such as the speedometer, gas, oil, temperature, GPS compass, odometers, trip meters, and so on — provide the driver (leader) with real-time operating performance feedback.
Just as modern-day cars are programmed with various warning lights to pinpoint excess variability or signal potential trouble spots, business analytic dashboards are designed to give the executive user a series of dials, gauges, and warning lights that enable an ability to rapidly detect trouble spots by following simple green, yellow and red light signals. The premise is to leverage the power of technology so that executive attention can be rapidly channeled to the pressure points (variances in revenues, costs, quality, customer service, etc.) where value-added leadership is needed.
The notion of computer-operated dashboards for tracking and guiding performance has become very well developed over the past several years. The latest examples of business analytic dashboards from providers such as SAS Institute or QLIKTECH, both operating out of Cary, are
increasingly sophisticated and robust in their capability to synthesize data into actionable insight at incredible speed.
So clearly, the technology exists to enable us to monitor organizational activity in real-time but the question remains — what should we be measuring? Our measurement choices actually define our real de-facto priorities and create focus for the organization.
A Matter of Balance
The concept of using a “balanced scorecard” was developed by Harvard professors Robert Kaplan and David Norton back in the early 1990s, and is still evolving. The balanced scorecard concept promotes the inclusion of four perspectives into your measurement system — the traditional financial view, measures of core business processes, the voice of the customer, and measures of the organization’s ability to learn and grow. These domains represent important forces in the organizational success equation. The key is to find ways to define specific measures for each area that can be reliably measured in real-time and that align with the core value proposition (CVP) for the organization. Making sure that our measurement is always linked to the CVP is the grounding that makes these metrics meaningful and instructive for the organization.
As we look at measuring core business processes, leaders looking to help their organizations become more agile will want to include performance metrics on the other four drivers of organizational agility as well, e.g., how well do we…anticipate change, generate confidence with employees and customers, initiate action through speed of decision-making at all levels and generate volumes of valuable new ideas because we have created the environment for fresh, innovative thinking.
The Human Sigma
Finally, over the past several years there has been an explosion of studies to confirm the power of the “Human Sigma.” A term coined by researchers and authors at the Gallup Organization, “Human Sigma” refers to the measurement rigor that went into a series of studies demonstrating the bottom-line impact on profitability when organizations achieve high levels of both customer and employee engagement.
For years, there has been much anecdotal evidence and intuitive wisdom for leaders to conclude that a positive relationship exists between “happy employees” and “happy customers.” Well, the evidence coming out over the past couple of years demonstrates a much stronger cause-and-effect relationship. In fact, the Gallup study demonstrated that an “engaged employee” produces 3.4 times more profitability than employees not rated as fully engaged.
Just as the medical field has demonstrated the performance enhancing benefits to be gained from streaming bio-rhythmic feedback onto our basic physiological activity, so can we create mechanisms for monitoring the right organizational bio-rhythms. When we make good strategic choices in what we measure — coupled with real-time, feedback mechanisms that provide a broad organizational reach — we greatly improve focus, alignment, synchronization and the active engagement of
employees and customers. These are some of the important characteristics of agile organizations and leaders ready to adapt and thrive in the 21st Century.
Alignment and the Ultimate Definition of Success … Happiness?
Leadership and happiness … almost sounds like oil and water, and what do they have to do with each other anyway? Should the happiness of all employees now become the leader’s job too? While that might be just beyond the realistic scope of a leader’s job description, there is a very strong analogy between true happiness and what makes for a good business model definition of success.
So, what is happiness anyway? Happiness is that elusive state of joy and well-being that hopefully most of us get to pass through at some point in our lives. Some folks get to stay there longer than others but shouldn’t it be one of the key goals found on all of our lists of New Year objectives … how do I increase my happiness equation? As we start out a new year is the perfect time to consider that question … what makes me happy and how do I get more of it? It really isn’t more complicated than that and in fact it is often our lack of clarity around what that means for us personally and for our business definition of happiness that prevents us from feeling successful.
Psychologist Martin Seligman, founder of the new field of Positive Psychology and author of the excellent new book called Authentic Happiness, has conducted research that demonstrates that it is possible to be happier — to feel more satisfied, to be more engaged with life, find more meaning, have higher hopes, and probably even laugh and smile more, regardless of one’s circumstances. Much of the magic in that equation has to do with finding meaning and purpose behind what we are doing and the alignment of all facets of our lives.
One of our favorite quotes on the subject is Mahatma Gandhi’s definition of true happiness which is “when what you think, what you say and what you do … are all the same thing”. We often use this quote as the framework for evaluating strategy and leadership dimensions with our clients. It is the ultimate statement about alignment of words and actions and an easy to understand framework that can be discussed up and down organizational lines. Getting this kind of alignment throughout your organization is one of the real keys to creating sustainable success … which is often the definition of happiness for many leaders.
These three simple elements in Gandhi’s happiness equation become the leader’s roadmap. The “what we think” part is analogous to having a well defined vision for the business built from a clear understanding of the basic value proposition for why the enterprise exists. There are a surprising number of businesses and leaders who flounder primarily because they have lost track of this basic of all principles – what is the main purpose for the business?
The second element in the prescription for happiness is the “what we say” portion that relates directly to the strategy and leadership language we use to communicate our message to all associates, suppliers and customers. Do we continue to reinforce our core message as stated above or are we constantly wandering and willing to say whatever it takes to “manage the moment”?
Obviously, the most important statement is “what we do” because our actions do speak much louder than our words and it is there that the real truth emerges. Great leaders, like those that are being recognized in this publication this month, know how to put all three elements together and build authentic happiness for themselves and employees while building sustainable success for their businesses.
Tom O’Shea, a certified management consultant and former president of the Carolinas Chapter of the Institute of Management Consultants, is a principal with Dr. Nick Horney of Agility Consulting & Training LLC, Greensboro. He can be reached at email@example.com or 336-282-1211.