by Giles Hutchins
Make no mistake, the transformation from a firm of the past to a firm of the future is challenging, especially while operating amid of a perfect storm of social, economic and environmental volatility. Successful transformation requires courage, not fear. The more we understand and explore our own business environments and wider business ecosystems (as well as our own inner motives and values) the more we find pathways for success – learning through doing, growth through experience, success through failure. Looking around us in nature and human nature, we find enablers to assist us; catalysts which aid and optimise the transformational journey. Four primary catalysts for transformation are: collaboration, innovation, education and inspiration. Let’s explore each in turn:
There has been much written recently about collaboration and co-operation. In fact, this coming decade has been referred to as the decade of co-operation, a time when business executives recognise the power of collaboration and co-operation over competition. It is a myth that nature has evolved over millions of years of combat and competitive struggle; more its evolution is down to networking and partnerships.
Of course there has been, and always will be competition in life, yet evolution benefits far more from collaboration than it does from competition. So does our business environment. We are witnessing a shift in mentality and behaviour from the past approach of “dog eat dog” competition between businesses, business units, and employees to the future approach of collaboration across multi-functional teams, departments, organisations and business ecosystems: interconnectedness rather than separateness, collaboration rather than competition.
Collaboration encourages the transcending of traditional boundaries used to atomise and separate teams, departments, business units and organisations; it interconnects artificial separations in business, encouraging sharing, creativity, empowerment and innovation.
The more we recognise the interconnectedness of the business environment – viewing it as a web of interdependent relationships within interconnected business ecosystems – the more we realise that collaboration (not competition) is key to our resilience and survival in these volatile times. In nature, which has been dealing with dynamic change for over 3.8bn years, we find it is the species that collaborate and interconnect more with their respective ecosystems that are more resilient to changes in their environment; the ecosystem they live in becomes more resilient the more interconnected the stakeholders are within that ecosystem. Ditto for business.
“Cooperation is the architect of creativity throughout evolution, from cells to multi-cellular creatures to anthills to villages to cities. Without cooperation there can be neither construction nor complexity in evolution.”
Martin Nowak with Roger Highfield, Super Co-operators.
An example to illustrate this shift in business mentality is the evolution of supply chain management to value chain management to business ecosystem resilience. Rather than treating an organisation as a supplier that needs managing and controlling, we treat the organisation as a partner within an ecosystem where synergies are created that benefit the whole as well as the parts. Rather than viewing supplier management as a linear chain, we view it as a web of interconnected relationships within a vibrant business ecosystem.
Another example to illustrate this shift is the evolution in approach of human resource management to employee engagement to stakeholder empowerment. Rather than treating the employee as an asset to be managed and controlled, we treat the employee as a stakeholder within a community of differing, interdependent stakeholders empowered to create synergies through mutually beneficial relationships with other stakeholders.
Such collaboration between stakeholders significantly improves creativity enabling sharing between people with diverse perspectives on a problem. This helps embed a culture more open to dynamic change. It is the openness of connections across, within and beyond the organisation that drive the opportunities for value enhancement and builds strategic resilience from the ground up for the organisation and the business ecosystem within which it thrives.
If any stakeholder seeks to undercut, exploit or compete in some way, the value of the relationship is undermined, in turn reducing the opportunity for synergies and the resilience of the business ecosystem and so the resilience of the contributing stakeholders within that ecosystem. Of course, such collaboration requires trust, mutual understanding and shared values.
Increased market volatility brings with it the need to create, develop and adapt new products and services under time-pressured conditions. In short, innovation is a critical success factor for the future – organisations able to innovate effectively, time and again shall win out over organisations that struggle to adapt. Innovation is fundamental to evolution in all walks of life, not just in business, but for all living species. The good news is human nature is opportunistic and curious by nature; it is in our genes to seek out new and better ways of operating.
The firm of the future creates the conditions conducive for creativity by building a culture that facilitates, empowers, unlocks and supports people’s creative potential; an organisation that encourages people to overcome fears and inhibitions, where the work dynamic is of constant evolution, where failure is not criticised but embraced for what it is – an opportunity to learn, adapt and evolve.
Of course, collaboration greatly helps innovation by sharing the burden across a wider group of stakeholders. In nature, organisms evolve best within diverse groups of interconnected specie and likewise, in business an organisation’s ability to innovate improves with collaboration amongst a diverse stakeholder group. While economies of scale may bring the benefits of lower unit cost of production, economies of scope bring benefits of increased synergies through greater connections, hence improved innovation. Balancing the benefits of economies of scale with the benefits of economies of scope is crucial for the survival of the firm of the future.
Embracing new approaches to ways of operating is facilitated through an understanding and trust in what, why and how change affects the stakeholders and their respective communities. Ensuring all stakeholder communities are engaged, aware and educated in this transformational journey will greatly optimise the transformative process. A deeper understanding and a greater sense of belonging is needed, rather than just being aware of the upcoming changes we need to empathise with what it means, why it is happening and how it affects the ecosystem of stakeholders involved.
This deeper understanding not only helps the transformation within the department or wider organisation, but also across the interconnected network of stakeholders which the organisation is part of – its business ecosystem.
By educating individuals to a level where there is a true understanding of the values and direction of the transformational journey, these individuals become proponents for change. They are able to educate the other stakeholders they interact with as part of their daily business. The understanding of the transformation, the why and how of it, becomes viral if it is grounded in trust and truth. Hence, the values of the organisation need to deeply resonate with the stakeholders, to strike a chord of belief beyond the goal of short term profit maximisation.
Keeping stakeholders in the dark or only partially aware will only come back to haunt and in turn water down the effectiveness of the transformational journey. This does not mean to say that complete clarity of where the organisation shall be in one or two years time from now is needed, it is more that people truly understand the reasons for change, the drivers for transformation and the value-set of the organisation.
The transformation is more about the journey than the destination, with plots on the course helping to steer a path through choppy water, whilst remaining open and flexible to changes in wind, swells and tide. A firm of the future has a culture that is rooted in values, where leadership is values-based and where the awareness of right and wrong behaviour is second nature. Organisations that encourage the right mentality, by living and breathing their values, ensure that openness, awareness, acceptance and motivation for transformation follow.
We are entering uncharted waters. We are on the cusp of major transformative change, socially, economically and environmentally. Few business leaders have witnessed volatility of the likes we are now faced with. It is as if we are walking in a dark forest at night with only candle light to illuminate a path ahead of us. The candle light allows for vision which brings comfort that our steps ahead are not too perilous, keeping us moving forward even if we are weary and fearful.
Inspiration can come from any and all of us – whether it a visionary CEO committing to zero-emissions by 2020, a new sustainable product line exceeding revenue expectations, a neighbouring plant successfully implementing new sustainable technologies, or a colleague taking time out from a pressing schedule to brainstorm with another in a time of need.
We do not have to be inspired by visionaries or great leaders. In these transformational times, we need to inspire ourselves and the ones around us by simply walking-the-talk and being true to the values of the organisations and communities we serve. The more we look for examples of inspiration within our own business ecosystems, the more we find, and in turn the more we inspire ourselves to be the change we want to see.
This article was originally published on the Guardian website and can be found in its original setting here