Principles for Becoming an Adaptive Organisation
Breakthrough technologies, like AI, force organisations to adapt, otherwise they get left behind. However, the big challenge is not adopting the new technology, but adapting to the new ways of working it unleashes. The internet, for example, forced businesses to develop an online presence, but the real winners were the likes of Amazon, who learned how to fulfil customer orders quicker and more efficiently than rivals. Today, businesses are investigating the dramatic but, as yet, unpredictable impact of AI on everything from manufacturing to customer service, yet the winners will be those who master the new ways of working AI enables. This puts HR on the frontline. HR must recruit for and develop skills and behaviours in a world that will be irreversibly changed by AI, but in ways no one can accurately say how yet. So, how can HR do this?
When facing uncertainty (i.e. not knowing what the right next step is) there’s a natural tendency to try and copy those we think have already figured things out. For example, when the i-phone triggered a mobile computing revolution — forcing businesses to create and continually ship updated apps for their services — organisations caught unaware by this sudden shift (and fearing being left behind) desperately looked around for who to copy. And, despite not being Scandinavian, nor a start up, nor in the music business, many businesses started organising themselves into ’tribes, squads and chapters’ in imitation of Spotify, who were lauded as great innovators in this brave new world. However, there was a problem:
“Spotify doesn’t use “the Spotify model” and neither should you”[1]
Management consultants prey on organisations who don’t know what to do next, peddling “best practices” — like the ‘Spotify Model’ — that offer an illusion of certainty. But even if your organisation has found the “right” model to copy, you face an even bigger problem — implementation. Anything that’s seen as alien by your current culture (‘that’s not how we do things around here!’) will create resistance to change. In response, the temptation (also encouraged by management consultants) is to launch a ‘cultural transformation’ to change people’s behaviour. But, if you’ve ever tried to change even a single person’s behaviour (ex, a friend, a colleague, or a spouse) you’ll know how difficult this is, how long it takes, and how exhausting it can be. Now multiply that by the hundreds or thousands of people in your organisation, and you’ll see why it’s so difficult to implement (non-technical) “best practices” in your organisation.
If implementing a new way of working requires changing everyone in your organisation first, maybe it’s better to look for something different to implement?
Something Different
Mao Zedong was one of the greatest military commanders in history, though he downplayed his own achievements. Mao triumphed despite lacking critical resources —for example, his peasant army had no radios or other means of communication — yet he aligned their efforts through simple but effective principles. Mao’s standing order — the “Four Nevers” — gave clear guidance to all his commanders: “Never be afraid to negotiate; never be afraid to retreat; never be afraid to change your plans; never be afraid to attack.”To teach tactics to the masses, Mao condensed complex manoeuvres into four rhyming verses. As the peasant army marched to battle, they sang: “When the enemy advances, we retreat; when he escapes, we harass; when he retreats, we pursue; when he is tired, we attack.” As Mao explained: “Those sixteen characters are the basic directives for a counter-campaign against encirclement, for both strategic defence and offence, for strategic withdrawal and counter-offensive. Everything else was just an elaboration.”[2]
Traditional organisations are hierarchical; people wait for instructions from above before acting, while decisions-makers often look to external “gurus”* for the “right solutions”. In a stable world marginal efficiency gains were sufficient for most organisations as this incrementally improved the bottom line, which is what your competitors were also doing. Yet, the situation in a rapidly changing and uncertain world favours another type of organisation, one that is able to tap into the collective intelligence of its people and discover ‘good practices’ that work better for them now (and that management consultants will likely be selling to traditional organisations later as “best practices”, a la ‘The Spotify Model’). ‘Adaptive organisations’, instead of issuing instructions from above, use principles — focus on users needs, have a bias towards the new — to align their people around what the organisation wants, but frees them up to act in innovative ways. This is how to unlock the potential of your organisation today.
For example, during the early months of the COVID pandemic a junior employee at Haier, in China, discovered a local hospital struggling to source personal protective equipment (PPE). Together with a small team of colleagues, they quickly created a database of local PPE production and distribution and hospitals in need. And within weeks their database became the nationwide platform for sourcing PPE across the entire country. Yet, no-one had instructed the team to do this, nor had they needed a manager to sign off on it. Instead, they’d been guided by Haier’s progressive management model (RenDanHeYi) which is built on fundamental principles — zero distance to users and everyone is an entrepreneur — that encourages its people to look for unmet user needs and use their collective initiative to solve them. This is the power of principles for guiding effective, rapid action in any situation and explains why successful organisations like Amazon and Haier and successful movements like Agile use principles.
How do you think your organisation will be able to compete against rivals who adapt at this speed?
So, whose principles should you adopt: Amazon’s, Haier’s, or someone else’s? The answer is, none of them! Instead you should develop your own principles that will work for your organisation now. Creating these takes time, but there’s a set of fundamental principles (standard ways of operating) you can use as a starting point. During interviews with over 100 Silicon Valley companies 40 universally-useful principles were uncovered and now form part of the increasingly popular Wardley Maps method, which is being deployed by multiple organisations, in multiple industries across the world. These principles improve your people’s ability to:
- Communicate clearly at all levels
- Develop critical skills within teams
- Make operations both effective and efficient
- Accelerate organisational learning
- Lead strategically
- Structure teams to adapt naturally to change.
This is how HR can develop the skills and behaviours their organisations need in order to adapt to where the world is going, rather than focusing on where it’s been.
Rather than embarking on another long-term, expensive restructuring or transformation program run our simple, free Adaptiveness Assessment to learn whether your organisation would benefit from adopting the first phase of these guiding principles (which will stop your organisation making some common errors that might be holding you back). If you’d like to learn more about these phase one principle (“Stop Self-harm”) click here, or click here to learn how to implement these quickly and inexpensively. Because remember, in business you’re competing with others so, to win, you don’t have to be perfect, you just have to be better than they are. So HR, it’s over to you now!
* As Roger Holdsworth, co-founder and chairman of SHL, once told me: “The reason there are so many gurus in business is that no-one knows how to spell charlatan”.
