7 Steps to a Dynamic Adaptive Business Model
Agile has turned 20, now what?
The Agile Manifesto and Agile Values turned 20 years old in February 2021. It has spawned many successful frameworks and approaches to creating more effective work processes in the software, IT and project management environments. Agility has also become a favorite buzz word in corporate board rooms around the world. Yet, the vast majority of organizations continue to operate with cultures closer to a traditional hierarchy than one guided by the changing circumstances of the marketplace.
Today’s environment can be summarized by disruption and dislocation becoming the norm. This was true prior to the pandemic, but it is now felt by virtually everyone. The world is in the midst of the most radical technological transformation in human history. It is known as the 4th Industrial Revolution, or Industry 4.0. The term was coined by Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, a nonprofit foundation located in Switzerland, striving to demonstrate entrepreneurship in the global public interest. In simple terms Industry 4.0 is transformative technologies that are changing industries. It includes intelligent robots, connected devices and smart factories. There is expected to be more technological changes in the next 20 years than there were in the last 300 years. The transformation is expected to be so radical that 65% of the children entering primary schools will work in jobs that do not exist today1.
There is no going back
The bottom-line is that the status quo and incremental thinking are not winning strategies. There is no product, service, intellectual property or business model that will not be disrupted given these changes. More corporate boards and senior leaders are recognizing the vulnerabilities of this disruption and they are seeking solutions. The question is how can we assist organizations to quicken the cultural transformation from the status quo to a more responsive customer focused business model?
7 Steps to a Dynamic Adaptive Business Model
For an organization to be dynamic and adaptive requires a completely different relationship between leaders and the workforce. It is a change in culture. I call this relationship the New ROI. ROI stands for Return on Intelligence. In order to be dynamic and adaptive, organizations will need to tap into the unlimited reservoir of talent within the workforce. Here are the 7 steps that will shift any culture to be responsive to the uncertainty of the marketplace.
- Leadership as a Service2 – Leadership shifts from knowing it all to sharing it all. Given the volume of information flowing through organizations, a small group of leaders cannot effectively accumulate, interpret, decide and execute changes to the evolving and uncertain market conditions of the future. Leaders have to share information broadly and dynamically throughout the organization to develop and leverage the shared consciousness and understanding of the entire team. This shift in the leadership mindset is called Leadership as a Service.
- Mission & Vision First – Share and live the mission and vision of the organization. Why does the organization exist? What value does it bring and to whom? Where is the organization going and what does the organization value? These answers must be on the lips of the leaders and the entire workforce. This is key to developing a shared consciousness within the workforce.
- Connect each job to the mission – Why does each job within the organization exist? Connect the job and activities of each employee to the mission. If you cannot connect a job or an activity to the mission it should be modified or eliminated.
- Eco-System Thinking – Regularly provide the workforce with an updated view of the competitive landscape in which the organization operates. People cannot see opportunities or challenges if they do not understand the playing field.
- Incentivize the win-win – All incentive compensations should be tied to the organization achieving the annual financial and organizational goals. Also, every employee should benefit from the organization’s success. You have to win or lose as a team.
- Have a Shared Consciousness – Regularly report the progress on the goals to the entire workforce (at least monthly, ideally weekly). This step is where the organization will begin to realize the truly powerful impact of the Return on Intelligence. The workforce understands the mission, the competitive landscape, the goals for the year, the progress in achieving the goals, and they are financially connected to the goals. When you now engage and empower the team to impact organizational performance, they will find revenue opportunities, cost-saving, and new initiatives to make a difference. You will never need to manage people again, only lead.
- Financial & Operational Literacy – Develop an ongoing financial and operational literacy program for the entire workforce. Make literacy a part of every personal development program.
In sharing the 7 Steps of the New ROI, I never mention organizational structure or a specific agile framework. That is because, when you have a team with the knowledge and insights, and the incentives are aligned for organizational success, individuals and teams will seek out the most effective models based on the circumstances. Also, they will shift and change the model in response to the competitive environment and opportunities. That is truly being dynamic and adaptive.
Finally, the concepts of broadly sharing financial and operational plans and connecting them to the workforce is called Open Book Management. It has been proven successful with many organizations. A few notable examples including H.E.B., a grocery retail with annual revenue of $31 Billion headquartered in San Antonio, Texas. Southwest Airlines, a Dallas Texas based $21 Billion in revenue US airline. Finally, Springfield ReManufacturing Corp, (SRC) a $100 Million in revenue rebuilder of truck engines. SRC took its success story as an Open Book Management company and has created an operating division called the Great Game of Business that promotes the concepts of open book around the world.. Their CEO, Jack Stack and others have written several books and built the core framework for any organization to become an open book management company. I recommend the book, The Great Game of Business by Jack Stack.
1The Future of Jobs and Skills, Chapter 1 World Economic Forum
2Leadership as a Service is a core principle of the XScale Alliance
Darsweil (DL) Rogers, Agility, innovation and talent development through consulting, workshops, data-driven analysis and research. Darsweil is also a Co-Managing Partner CFP Innovation