A Dynamic Organization Principle #9

Use Organizational Instability to Catalyze Learningleadership_training_models_

Organizations that succeed in leveraging instability unleash enormous amounts of energy for fueling innovation and adaptability. As situations present themselves—such as a new competitive threat or loss of investment money—management must maintain a delicate balance between reacting too quickly and resorting to old patterns.

Working in a culture of constant instability can be stressful, especially when it is new to the organization. Because of years of experience with the stable, predictable model, many managers resist moving to a model of permanent instability. What is required is a delicate balance between maintaining enough discomfort for learning and productivity to be optimized while avoiding the risk of demotivation, paralysis, and complacency.

Some tactics are well suited for fueling innovation and adaptability. One is to make sure that every member of the organization knows the truth about the difficulties facing the company. Holding people accountable is important. Doing so might include publicizing risk taking to highlight successes and explain shortcomings while avoiding blame. During times of stress, typically 20 percent of employees step up to be change agents. Another 20 percent resist or retreat. By raising the visibility of the change agents, the other 60 percent typically follow their lead.

Encouraging diverse points of view enhances adaptability. Discussions that support opposing points of view often trigger ideas that can be advance warnings of needed transformation.
To maintain the energy and loyalty essential to adaptability, organizations should design and share relevant metrics. A strong vision accompanied by clearly communicated roles and responsibilities will lead to accountability. With distributed decision making in a rapidly changing environment, success metrics must be clear and equitable.
Come back for the last Principle on Leading a Dynamic Organization! Feel free to comment with questions, insights, or additions to this post. To receive alerts when the next blog is published, click on the RSS feed at the top left of the page to subscribe.

Christopher Laszlo and Jean-François Laugel, Large-Scale Organizational Change (Boston: Butterworth Heinemann, 2000)

A Dynamic Organization Principle #6

Develop Ambitions Greater than Means

The limits you create will be real to you until you learn to step beyond them. Then, you  will look back at the reality you used to inhabit, wondering how you were able to stand  its narrow confines. —Paul Ferrini, Author and spiritual teacher

Companies looking to engage in perpetual transformational opportunities are most successful when they set their ambitions much higher than their means. As people participate in the vision, energy is released that inspires innovative ways for reaching the goal.

People who feel passionate about the vision step up to be leaders. Others wait until the goal seems more tenable before they engage. Abusiness_intelligence_success_ few resist and may add to the instability. However, if handled skillfully, the contrasting tensions can assist the transformation.

It is becoming increasingly apparent that companies that do not stretch their vision will be surpassed by the competition. These actions can assist companies to stretch their vision and prepare people for perpetual transformation:

  • Express a vision or strategic intent to members of the organization that leads to breakthrough thinking and action. By allowing the participants to embrace a grand vision, leaders naturally align themselves and move beyond what was once considered impossible.
  • Disperse control. The complexity of a major shift in vision requires top leadership to disperse control. By sharing the vision and empowering the participants, the idea takes on an energy of its own. The role of leadership is to continually share the vision, provide support, and celebrate accomplishments.
  • Stay focused and harness energy. In large, complex organizations, many transformative processes may be happening at the same time. The key to success is to stay focused and harness the energy created by the overall goal. A simple rallying cry, slogan, or watchword is helpful to thread the varying activities and maintain high spirits.
  • Discuss change and introduce points of inflection. Introducing a new vision when most members of an organization are satisfied with the status quo may prove to be futile. Most organizations are more susceptible to major shifts in focus during times of crisis. Starting a conversation about what might happen if the market shifts drastically can begin to prepare members for change. Introducing an artificial point of inflection is another option for stimulating receptivity.

Come back for the next 4 Principles on Leading a Dynamic Organization! Feel free to comment with questions, insights, or additions to this post. To receive alerts when the next blog is published, click on the RSS feed at the top left of the page to subscribe.
__________
[i] Christopher Laszlo and Jean-François Laugel, Large-Scale Organizational Change (Boston: Butterworth Heinemann, 2000), 79.

A Dynamic Organization Principle #5

Link Transformation to Shareholder Value Creation

Shareholder value has long been the single measure of company value. However, as organizations are exposed to continuous uncertainty, they need to behave more like living systems to survive. The survival of living systems “is measured according to strict criteria of adaptability and fit with the sustainable environment.”[i] However, there are some challenges when managing shareholder value in a complex and unstable competitive environment:

  • In a highly volatile economy, the accuracy of measures such as discounted cash flow and expected losses is diminished. It is team_building_change1difficult for highly adaptive companies to predict how much their core business might change in a few years.
  • It is difficult to capture the value added from a company’s management style or decision-making capabilities. “During rapid transformation, change processes become more influential in determining financial performance than either structure or traditional processes.”[ii]
  • Companies are beginning to see the impact on cash flow from connecting with other groups, such as their communities, partners, and the environment. Quantifying this value continues to be challenging.

In summary, the method of calculating economic value added must be “modified to integrate perpetual transformation rather than one-time (or periodic) shareholder value initiatives in managing a business portfolio.”[iii]
The next actions are designed to assist companies in determining shareholder value in a complex and volatile environment.

  • Develop different cash flow scenarios. Organizations will be in a stronger position if they develop different cash flow scenarios for multiple futures based on the best estimates of what will change and how the market will behave in the next few years. The actual exercise of scenario building and the resulting discussion are more important than getting the estimates exactly right. The flow and exchange of ideas is valuable in generating the preparedness for the next phase.
  • Link shareholder value at every phase. When new business lines or other opportunities emerge through the adaptive process, it is essential to link shareholder value at every phase and ensure “sufficient coherence among strategy, finance, organization, and implementation.”[iv]
  • Focus on growth strategies. Such a focus is essential, even if it requires actions such as downsizing, restructuring, and reengineering, when an adaptive company is experiencing a major transformation.

Come back for the next 5 Principles on Leading a Dynamic Organization! Feel free to comment with questions, insights, or additions to this post. To receive alerts when the next blog is published, click on the RSS feed at the top left of the page to subscribe.

[i] Christopher Laszlo and Jean-François Laugel, Large-Scale Organizational Change (Boston: Butterworth Heinemann, 2000), 79.
[ii] Ibid., 80-81.
[iii] Ibid., 81.
[iv] Ibid., 84.

Business Intelligence Success Factors

Transform challenges into opportunities with emerging Business Intelligence Technologiesbusiness_intelligence_success_factors

Written by an expert in data mining and statistical analysis, this valuable resource unveils the connection between the increased use of BI and the need for new, proven theories and models in BI, as well as the guidance to implement them successfully in your organization. Are you ready to become adaptable? Learn how to harness today’s rapidly evolving global economy with Business Intelligence Success Factors.
Praise for Business Intelligence Success Factors: Tools for Aligning your business in the Global Economy

“Olivia Parr Rud does a remarkable job of weaving together many topics in a strategic way. As ‘quants,’ we’re fascinated with data and fact-based decision-making. But success only comes when you consider the human factor, especially effective communications. Making topics like evolutionary biology, complexity science, and systems thinking relevant for business success is a unique and compelling view. As Max Frisch said, ‘We hired workers and human beings came instead.’” —Anne Milley, Senior Director, Technology Product Marketing, SAS”

Business Intelligence Success Factors is a must-read for anyone implementing BI on an organizational level. This book explains the business landscape and the underlying reasons for our current volatility, offering clear guidance on navigating our information rich global economy.” —Ron Powell, Editorial Director, Business Intelligence Network

PurchaseBusiness Intelligence Success Factors from Amazon