A Dynamic Organization: Principle #1

Create Adaptive Strategies

A primary role of management is to define the vision or the overall goals for the company. Generally, the next step is to define the strategy. Traditionally, strategy also is set by management and delegated throughout the rest of the organization. However, in a highly volatile global economy, this approach can prove limiting if not devastating when unforeseen circumstances occur.

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In a highly adaptive company, management shares the vision and allows the strategy to emerge. A diverse employee base is a real benefit in this case because it allows for a wider range of strategies. The best approach is to have several strategies that can be implemented quickly, given different economic stimuli. “They [management] must do this by visualizing alternative futures on the basis of probability-weighted trends.”[i] Doing so may require abandoning past trends, a difficult task for many established businesses.

Companies can take several approaches to prepare for and leverage unforeseen events that demand a change in strategy. One tactic is to design “what-if” scenarios to serve as alternate long-term strategies that ensure adaptability in the face of unpredictable economic forces.
Another tactic is to define business units around a group of skills that provide the flexibility and resources to pursue new opportunities in a volatile economy. Doing so unleashes a creative energy that leads to adaptability and innovation.

A strong Business Intelligence infrastructure is critical to adaptability. Networks designed to effectively transfer information about inventories, staffing, and trends help to eliminate time lag and reduce errors across supply chains and between partners. Dashboards that track daily trends are able to reveal weak signals. The role of revealing weak signals is defined in chaos theory as one that can magnify and transform entire systems during times of instability. Direct interaction between top managers and the rank-and-file is also important. Companies in which leaders connect with employees on a regular basis are much better at noticing weak signals as signs of shifting markets or other changes.

Organizations that access the innate wisdom of their organization to tap into future trends encourage and reward innovation and simultaneous access and create future market trends.
In traditional organizations, strategic planning usually consists of analyzing and applying past trends to the future.

“The statistical quantification of past trends, the rigor of mathematical models, and the fact of including hard historical evidence in a structured framework remain important to the strategy-formulation process. But they also can stifle creativity and block insights about future trends.”[ii]

While this method works well in a stable economy, it can suppress creativity and inhibit adaptability in economically volatile times. If structures are solidly built on past trends, many organizations are not resilient enough to survive a quick change in market trends.

Stay tuned for the next 9 Principles on Leading a Dynamic Organization! Feel free to comment with questions, additions and situations in which you have implemented these creative adaptive strategies.

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[i] Christopher Laszlo and Jean-François Laugel, Large-Scale Organizational Change (Boston: Butterworth Heinemann, 2000), 43.
[ii] Ibid., 51.

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