History has always been a history of revolutions. Welcome to the revolution of the organizations.
According to Satya Nadella, the current market does not respect tradition; what it does respect is innovation. The ability to adapt has to be our greatest strength – and even more so in the current situation – as it will allow us to achieve our goals and succeed in our projects.
This is also one of the maxims that define us and therefore, for this new chapter of our company’s history, we wanted to turn this insight into a conversation to summarize our experience with which we have achieved more than 150 successful business transformations and trained 15,000 leaders in 4 continents, 32 countries and 24 sectors in these almost two decades.
We begin this conversation with a view to the need for self-disruption that this era of change demands of us, what aspects need to be considered to transform the organizational structure of a company to the requirements of modern times?
Let’s take a look at the future of organizations
According to our CEO, Jonathan Escobar, “several aspects have to be considered to transform the structure of an organization, above all, its systemic interconnection. An organization is a living, self-organizing organism that adapts according to the evolutionary purpose for which it exists and survives”.
Therefore, the best strategy for a company to reorganize its structure is one that begins with a common mission. A purpose shared by all the people in the organization.
Hence, the following should be particularly taken into account:
- The environment, the ecosystem in which that living organism (organization) must survive and renew itself continuously.
- Also, the impact of exponential technologies on their future.
- The products/services they develop.
- Way and channel of interaction and/or collaboration with the client and/or consumer.
- The current culture of the company. I do not mean the formal culture pinned to the walls on posters but the beliefs and paradigms that remain unspoken but determine the internal relationships.
- The leadership model: managers are administrators of resources´ efficiency or servant leaders.
- And finally, the level of autonomy and self-responsibility of the collaborators in the organization.
The next question then is: How does the size of the company in question influence this redesign? And what about the sector to which it belongs?
“Size plays a role in how the organization will evolve. A larger size usually implies a more incremental evolution, where the transformation proceeds wave by wave, where in each wave the teams or tribes experience and allow the succeeding teams to learn from their experience.“, answers Màrius Gil, COO of ActioGlobal and expert in exponential organizations.
How to transform your business?
Transformation never happens all at once. «Leading organizations evolve their structures through what we call MVOs (Minimal Viable Organizations), which are temporary stages of organizational design developed gradually by self-organized teams. These teams also help and guide the groups that are incorporated late». This transformation is driven and accelerated by the evolution of the self-organized teams, which grow with the organization and accompany the teams that continuously incorporate themselves to the evolutionary mission of the organization.
On the other hand, the sector has an influence by limiting the autonomy and responsibility of the teams participating in the organizational transformation. However, highly regulated sectors are gradually demonstrating their ability to evolve. The strength of individuals and their interactions are capable of overcoming the rigidity of any bureaucratic process.
An organization is a living, self-organizing organism that adapts itself according to the evolutionary purpose for which it exists and survives.
What’s the revolution then?
So is this the reason why more and more companies are turning towards a less vertical and more horizontal model of hierarchy?
That´s right, it is. Vertical structures were created to produce in a deterministic, predictable and linear environment that no longer exists. This gave rise to companies organized as assembly lines, where everyone had to be focused on fulfilling “their task” in a stable and predictable environment. This organizational paradigm required controlling the task. “If we always have the same inputs, and we make sure we perform alike, we will always have the same expected result.
The hierarchy was the answer to the need for controlling the task, the execution. The solution that some thought about and others executed,
commented Yon Valverde – Associate Director of ActioGlobal. “In fact, today’s environment is volatile, uncertain, complex, ambiguous, and above all, subject to accelerated and disruptive change due to the impact of exponential technologies. If we are to survive in this environment, we all have to think.”
Is your organization Agile?
As long as organizations are aware (yet, not all of them are) of this reality, they understand that iteration, anticipation and adaptation is the only possible survival formula, a formula that depends on the capacity of human interaction, not on controlling the task.
In fact, if we visualize the organization as the sum of all the human connections for shaping and leading a future, we will recognize that the hierarchical structure is simply a forced imposition that blocks the autonomy and self-development of people and teams.
But what role does ‘Agile’ play in this kind of transformation? Is this one of the most important philosophies for the new organizations?
Marc Oliveras, our Agile&Lean Executive Advisor believes: “Agile like Lean plays a key role as a guide and reference, but it can never be an ideal purpose in itself.”
Thus, in particular Agile represents four values, defined through twelve principles that help us question our practices and experiment and learn with new ways of providing customer satisfaction, leading and being led, connecting, collaborating, interacting, communicating and unlearning. Iterating continuously is also demanded to always find a better, evolving or radically different way to create valuable products and services that are rewarded with the smiles of a growing number of customers.
“The values and principles of Agile help an organization develop a collective learning system that empowers it to lead in an ever-changing market”.
Leading organizations evolve their structures through what we call MVOs (Minimal Viable Organizations), which are gradually developed temporary stages of organizational design.
And how vital is it for a company that communication and ideas flow in all directions?
In fact, communication and the cross-connection of ideas make innovation, renewal and transformation possible. And without this constant evolution, an organization cannot survive in today’s world.
“By communication and cross-connection of ideas I do not mean sitting around in meeting rooms and brainstorming with post-its. Actually, I rather mean connecting, participating, collaborating, experimenting, creating and building alliances with each other and with clients, being united by a mission, an evolutionary purpose.”, says Eva Gol, Director of People & Comms at ActioGlobal.
“I´m referring to actions and behavior that create a system of community, network, reciprocity, matching groups, human chemistry, connection and association. And when that actually happens, it creates the particular human cooperation that allows for continuously leading in permanently transforming environments because people flow and enjoy creating together.”, she concludes.
In this context, we might ask ourselves what objectives are intended to be achieved by the implementation of this major transformation. What advantages can be gained by reorganizing areas into smaller, more specialized teams? Can this lead to increased productivity?
Firstly, today’s business environment requires us to be closer to our customers than ever before. In fact, it is no longer enough to be close, you must collaborate and create with them.
In addition, organizations must be very attentive to what is going on around them: especially to the evolution of exponential technologies and their impact on individual and collective behavior in society. Social movements are emerging as new forms of power, and it is no longer solely the responsibility of the CEO to connect the external reality with the way of acting within the company. Today, companies need all their teams to perform that role.
What’s the role of teams in creating HPO’s?
As our Senior Consultant, Marc Rafat, points out: “To reach these two objectives, companies need to be organized in a much more humane, less hierarchical way, based on networks of self-organized teams capable of collaborating and creating together to satisfy customers, contributing to the organization’s evolutionary purpose.”
The teams do not always have to be specialized, but they must be composed of all the people and skills necessary to satisfy the customer or consumer. Each organization should experience their size, although our experience in more than 20 different sectors tells us that the best performing teams include between 5 and 10 people. Besides the size that responds to the effectiveness of the communication and the sense of belonging of each team member, it is necessary to consider:
- Mutual trust: all team members know that they can count on their colleagues to achieve common goals.
- Further, shared mission: all team members have clear objectives that excite and challenge them equally.
- Next, collective impact: the team feels that its mission also has a relevant impact on an evolutionary purpose the organization pursues.
- Finally, freedom to experiment: the best teams are those whose members are given the room and the confidence of the organization to experiment and always look for better ways that enables them to satisfy customers and consumers.
“Regarding the increase in productivity, leading organizations are actually those in which their teams both innovate and operate with maximum efficiency. It’ s where teams drive growth and improved profitability in the creative tension that emerges between the curiosity of discovery and the pursuit of high performance.”, adds Elena Arnaíz, our High Performance Talent Manager.
Social movements are emerging as new forms of power, and it is no longer solely the responsibility of the CEO to connect the external reality with the way of acting within the company. Today, companies need all their teams to perform that role.
In that respect, what other ways are there to optimize a company’s resources?
“For years, companies have implemented hierarchical and centralized structures focused on achieving an economy of scale, with methodologies for the development of linear products and incentive systems under the umbrella of MBO (Management by Objectives) that feeds the illusion of management control, under the paradigm of the carrot that makes the rabbits run.”, says Javier de Rivera, our Executive Advisor in High Performance Retail.
All this made companies tremendously effective and efficient, as long as their markets, consumers and social context did not change, or as long as exponential technologies could not create disruption in their products or services. Nokia, Kodak, Blockbuster or most recently Thomas cook can tell you a story about this.
So, which are the challenges of the future?
But the fact is that in the immediate future no sector will be left out of the digital disruption of exponential technologies.
In this context of change and innovation, what is the biggest challenge a company can face today from an organizational point of view?
“Complacency. The greatest enemy of business is not the new era of exponential change we are currently experiencing. It is not the technology or the startups that strive to win them over and make them history. The biggest enemy is their functional blindness, their complacency with the status quo.” Gustavo Vitriago, our expert in Lean Management and Six Sigma, has it very clear.
John W. Gardner said that “most sick organizations have developed functional blindness to their own defects. They are not suffering because they cannot solve their problems, but because they cannot see them.”
And he was right. as our Wellbeing and High Performance Trainer Malwina Szmit points out, “in today’s world, the capacity for self-renewal, for self-disruption is the new stability. The only possible stability is continuity in movement: nature has taught us that if you don´t move, you crystallize, and if you crystallize, you´ll break.”
Szmit adds, “This capacity for continuous self-renewal will not only take place at the organizational and team level, but also at the individual level. Renewing ourselves spiritually, intellectually and physically is fundamental to promoting continuous renewal in the teams in which we collaborate and impact. The physical-mental-spiritual development of each person is not “something else” in the leading organizations. It is the engine of renewal.”
The capacity for self-renewal, for self-disruption is the new stability. The only possible stability is continuity in movement: nature has taught us that if you don´t move, you crystallize, and if you crystallize, you´ll break
What small changes help execute this transformation (reduce the number of meetings, answer emails only during working hours, etc.)?
“Becoming an agile, industry-leading organization requires first and foremost a lot of intention and experimentation.”, Deborah McGee, our advisor in North America offers that transformation starts with making conscious decisions, and taking courageous steps toward:
- Self-organization, give room for the formation of teams capable of defining their missions, their objectives and their way of working in order to contribute to the evolutionary purpose of the organization.
- Decisions based on facts, not resting on opinions. Opinions, egos and beliefs are uncertain ground to base wise decisions. Decisions based on evidence and feedback from users & consumers naturally yoke organizations to their greatest mission. Fact-based decisions have a more honorable benefit and greater lasting impact than filling in accountability reports.
- Intolerance to mediocrity: creating an organization that empowers talent starts with the talent you have. Talent attracts like, while mediocrity attracts and enables further mediocrity. In service to the relentless pursuit of excellence, people who take responsibility for finding solutions to complex problems are recognized. Those who are ahead of the curve, those who embrace new experiences and challenges in the pursuit of greater outcomes are rewarded.
- Demonstration beats lecture: people listen with their eyes. If we’re too busy watching the (in)consistency between speech and actions, we overlook the actions. Actions speak.
- And finally, Genchi Genbutsu! Genchi Genbutsu is a powerful Japanese concept that means “go to the source, observe and understand” beyond the apparent surface perceptions of what’s happening.
When people in organizations spend too much time locked up in meeting rooms, they spend too much time hiding from their clients
In Deborah’s experience, being ‘at the Gemba,’ where the work happens, close to clients and consumers – and also to people, of all types in all their diversity – is essential for leaders and teams to understand together their customer´s requirements wherever value is created, delivered and distinguished, and opens the door for true, lasting transformation.
Finally, let us ask our sensei, partner and director for the American continent, Mauricio Salinas. We thought it appropriate that he be the one to take stock of this reflection due to his long history of working hand in hand with company leaders and his extraordinary experience as a witness to this great transformation. We’d expect to find out how he is experiencing this latest revolution.
First of all, Mauricio wanted to acknowledge this great team for their integration as a group, their talent and their ability to always work as a team. In his words, it is this ability that “has helped establish ActioGlobal as a great company that creates accelerated change and revolution in organizations around the world. Thank you for the honor I am granted to close the first article of an exciting new era for all,” added our sensei.
The times we are living in require organizations to be more agile, faster and also more efficient and innovative. These are times of great uncertainty and ambiguity, in which all businesses and/or companies have to reinvent themselves. Organizations that “do not embrace their own transformation or revolution will not survive, as many have already failed”. In a way, it could be said that destiny reached them
However, the question most often asked by organizational leaders in recent times is:
How does change start? What do we need to do differently?
Firstly, company CEOs need to lead the change, becoming the main promoters of this enormous transformation. “They have to be trained to do so and lead by example; these leaders have to think 3, 5 or 10 years ahead to translate into concrete actions what is expressed in their company’s vision.”, our Director for the American continent pointed out wisely.
Present times demand that the transformation of organizations be accelerated and adjusted to the circumstances. Today, we cannot conceive and act as quickly as we did before the pandemic. The change “accelerated exponentially” and the transformation in companies must also do so, starting with the re-evaluation of the principles or paradigms with which they interact with their customers.
Companies have to become organizations that learn continuously, especially from the changing requirements of customers.
For our part, we have to be closer to the client than ever before. Being close in the middle of the transformation to become one of their strongholds; thinking and acting as if we were part of the company. Mauricio points out: “Trust is the basis of our relationship with our clients and now more than ever we have to honor that trust.”
In these times of change, every organization requires a strategy that sets its true direction. And if you don’t have one, you need to create one. The strategy must develop the culture of the organization and it can be guided by the principles of Agile, Lean and Kaizen. These philosophies are based on making organizations more agile and effective in their mission to satisfy customers. The strategy, together with a system of objectives such as Hoshin or OKR, is the compass through which the organization will shape this great change, starting by challenging the paradigms already anchored in the organization. And above all, let’s not forget, there is no strategy without the commitment and alignment of everyone!
We are facing a “new reality”. A reality we have never experienced before in history and we have to acknowledge it. The human factor has always been one of the most solid bases behind a great transformation but now it is more important than ever – even more so Therefore, HR departments play a strategic role in training and empowering people. All people, from management to the teams in the “Gemba” must be developed to translate strategy to execution and execution to continuous learning.
We conclude this reflection, which serves to inaugurate and commence this new chapter of our company history with great enthusiasm, with the consideration of our colleague, partner and friend, Mauricio Salinas: