During the late nineteenth and early twentieth centuries organizations saw great leaps forwards in their effectiveness. This was largely driven by a new, disciplined approach to management combined with strict hierarchies, rules, and individual accountability. While few would describe this approach as humane, engaging, or people-centric, these bureaucratic systems allowed large organizations like Ford and US Steel to emerge as efficient machines, and dominate their respective industries.
Yet, as is common, what worked so well circa 120 years ago begins to unravel as the world moves on. Like the proverbial general always fighting the last war, managers seeking to build the efficient machines of yesteryear, are ignoring the most important element of success in today’s world, inspired, engaged people. Where once obedience, diligence and compliance were the order of the day, in the knowledge economy, what makes the difference is creativity, passion, and initiative. These are not brought about by micro-management, control and standing over workers with a stop-watch. A Theory X view of people has given way to a Theory Y view; a view in which freedom, trust, autonomy, and high engagement become an organization’s competitive advantage.
In today’s fast-pace, complex business climate, knowledge quickly becomes a commodity. To survive and thrive, the creation of new knowledge along with valuable new products and services is vital. Compliance and efficiency are rarely enough to achieve this. This is the crux of business agility, and yet, despite this challenging new business climate, it seems that many organizations remain perfectly designed for a world which is long gone.
The journey to a becoming more people-centric is not a quick, or easy one. Contrary to popular belief, merely adopting a few trendy new processes, tools, or technologies will not lead organizations to become more adaptive, more creative, and more innovative. Those taking this approach almost invariably face frustration and disappointment. The inconvenient truth is that achieving meaningful results involves structural changes across the organization. There are, in fact, six key areas that must be addressed. I will briefly outline each area and the vital role each plays.
Given that the most important part of any organization is its people, I begin with people and engagement. Despite strong evidence of employee engagement being a key leading indicator of business success, the percentage of people who are passionate about their work and/or organization remains troublingly low. The prospect of going to work each day to follow strict processes and rigid rules and drown in a sea of bureaucracy is not an exciting one. Yet for far too many, it is a daily reality. To thrive in the creative knowledge economy, leaders must cultivate people-centric workplaces with high levels of employee engagement. They must reduce the focus on conformity, processes, and rules, They must, simultaneously, increase the focus on trust, freedom, a share vision, and personal growth. This will allow people to bring their full range of capabilities to work every day, creating truly inspiring workplaces where ordinary people do extraordinary things.
The next area is leadership and management. Without a shift in the mindset and daily behaviors of leadership, nothing will else will changre. This is because leaders design the systems inside which everyone else must operate. Where once focusing on positional authority, micro-management, and individual work tasks was the norm, agile leadership involves articulating an inspiring vision, then empowering others to make it a reality. It involves decentralizing decision-making and investing in the growth of those around you. By changing how they show up each day, and leading by example, agile leaders stop acting as puppet masters, and instead foster high-performing, self-managing teams that can respond swiftly to whatever strategic challenges emerge.
The next area, organizational culture, is often cited as the biggest barrier to innovation and business agility. Defined as the result of a company’s collective behaviours, values, and beliefs, in many traditional organizations, culture can be characterized by words such as control, conformity, fear, secrecy, and blame. These cultures are stifling in the pursuit of creativity, innovation, and the ability to evolve. More modern, progressive cultures evoke words such as trust, transparency, collaboration, experimentation, and psychological safety. These are all underpinned by a shared vision and values. It is difficult to overestimate the impact of culture and, as such, leaders play the biggest role in shaping it. There must be a daily focus on the conscious cultivation of a culture that enables agility.
Next comes organizational structure—that is, how people come together to get work done. There are few things under the direct control of leadership that have as big an impact on agility as team structure. Top-down hierarchies, functional silos, and a focus on individual productivity can certainly make for efficient machines. This model falters, however, when it comes to innovating and disrupting. Hierarchies are just not responsive enough to change in arenas of high uncertainty, nor do they foster the kind of connections and relatedness many crave from their work. More suitable, are networks of interconnected, cross-functional, autonomous, customer-focused teams working together toward a common goal. This flatter structure requires high levels of trust and collaboration both within and across teams. This is not only more effective, but more enjoyable ways to work for people.
Next up is governance and funding. This is where innovation meets finance. Reinventing policies and controls around how money is assigned to work requires revisiting our relationship with uncertainty and experimentation. When risk and uncertainty are high, up-front business cases, rigid plans, and a focus on pre-defined outputs can become self-defeating, not to mention demotivating. This is because it is impossible to know the best solutions without testing the waters. Details will only emerge over time, and change is inevitable. Modern governance practices enable small, safe-to-fail experiments, adaptive plans that respond to feedback and learning, and a focus on business outcomes. This provides maximum flexibility in an unpredictable world, as well as tapping into the collective intelligence os everyone in the organisation.
And, finally, we have ways of working. These are the processes, practices, and frameworks used by teams to get work is done. This is frequently where organizations start their journey, often failing to realize that changing these alone will have little impact. Once the right environment has been created,, techniques like Scrum, Design Thinking, and traditional agile practices can begin to flourish. These approaches will be marked by collaboration, fast feedback, and relentless continuous improvement by the teams doing the work. This drives engagement, motivation, creativity and initiative.
Making changes across these six domains will help to create people-centric organizations which harness human potential. In short, they are about moving beyond Industrial Revolution bureaucracies and creating organizations for both the twenty-first century, and human being. Redesigning for true business agility will allow organizations to survive and thrive in an increasingly interconnected, fast-paced, and uncertain world, and to compete through a combination of operational excellence and innovation.
For a lightweight assessment of your engagement drivers, check out my free employee engagement assessment.
To find out more about the importance of organisational culture, check out Karim’s new book The 6 Enablers of Business Agility: How to Thrive in an Uncertain World. This topic is also covered in detail in his Certified Agile Leadership(CAL) course.
This article originally appeared on The People Space.