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.

dynamic_organization

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.

To receive alerts when the next blog is published, click on the RSS feed at the top of the page to subscribe.

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

Principles Of Leading A Dynamic Organization

At the executive level, the rules of the game have changed. Just ten years ago there  was no Sarbanes-Oxley, the Internet was in its infancy and corporations were coming  to grips with globalization. Managing in a global, technologically driven, and fast- changing economic environment requires a more complex set of skills than those needed by managers in the past. My clients are looking for innovative leaders who can  adapt and manage through continuous change. —Jerry Bernhart, Bernhart Associates

principles_of_leading_a_dynamic_organization

In Large-Scale Organizational Change, Christopher Laszlo and Jean-François Laugel define the 10 Principles as guidelines to action that “offer an integrated approach to the main managerial processes of a company: strategy formulation, annual budgeting, investment appropriation requests, controlling, and project management.”[i] To support the implementation of the principles in a dynamic organization, they offer some tactics that are designed to work in complex and chaotic environments.

The 10 Principles tackle the central issues of corporate management in the areas of strategy, organization, and execution. However, the focus is on the dynamics involved. Since they are designed to guide dynamic companies that thrive on complexity and instability, they cannot be applied separately. They must be seen as a comprehensive approach. “As a part of a mind-set, the 10 Principles are an effective basis for action that lead

s to corporate renewal and development of the capability to survive frequent and radical discontinuities in the operating environment.”[ii]

Over the coming months I will deliver the 10 principles of Leading A Dynamic Organization to you through my blog. These principles can also be found in my book Business Intelligence Success Factors, Tools for aligning your business in the global economy. Take these tips and tools to add to your arsenal of leadership skills.

[i] Christopher Laszlo and Jean-François Laugel, Large-Scale Organizational Change (Boston: Butterworth Heinemann, 2000), 36.
[ii] Ibid., 38-39.