Changing technologies, business models and competitive landscapes are today's typical business challenges. Organisational structures and workforces need new forms of adaptation to meet these demands. However, few can adapt let alone exploit these changing circumstances because of their traditional cultural approaches to the way they design, build and operate their businesses. In other words, it’s the way in which the organisational design, management practices, people development, measurement and governance systems align and interact to deliver performance.
Focusing on a new form of adaptive management with an adaptive workforce is now the cutting edge in developing a winning business culture that supports the change agenda within organisations. So, how adaptable is your organisation today? How adaptable do you need to be to stay in business? More importantly, what do you need to change to enable your organisation to become adaptive? While most businesses are to some extent adaptable, the real question is are they being adaptive enough and what is Business Adaptiveness?
An adaptive organisation is ‘chameleon like’ in its ability to keep pace with changes in its surroundings. However, unlike the chameleon, it not only needs to respond to the environment but to go further and disrupt the environment to create competitive advantage.
A key enabler for organisational adaptability is designing the organisational structures and governance systems to create a culture that devolves decision- making much lower down in the organisation. This, along with autonomy, resources and freedom to explore new ways of working can create an adaptive work-climate.
Put simply, adaptive organisations develop staff and managers to seek out and remove organisational constraints, systematically removing obstacles that impede the ingenuity and learning of teams and the flow of continuous value to customers. Adaptability requires much higher levels of collaboration and necessitates a new relationship between managers and staff.
Adaptability, in the context of this guide, focuses on the ability of the broader workforce to change their job roles, processes, measurement systems, reward systems and structures to create new organisational and operational capabilities, while developing and delivering new forms of value for customers.
The speed of business change today is phenomenal, although the way we have designed organisational structures and trained people to work in them is still entrenched in 19th and 20th -century thinking and will not meet current challenges. I talk to many senior managers who are frustrated with the fact that they seem to be reorganising their business continually, perhaps once or more every two years because of new technology, new business models, mergers, regulation and so on. The list can seem endless.
The corporate reorganisation usually strikes fear into most everyone from top to bottom. In the months and days leading up to the change, people seem frozen to the spot unable or unwilling to make decisions just in case those decisions do not align with the new direction. Given these circumstances, many managers are seeking new forms of adaptive organisational designs that are by nature continually changing in response to internal and external pressures, where structures and people adapt with little or no fear of different business situations. As part of these innovative designs, change is an incremental, day-to-day phenomenon. It does not all happen at the same time in one big bang, incurring all the organisational uncertainty, fear, disruption and costs in their many forms.
In nature, adaptability is a response to the pure desire to survive and reproduce, and it can be argued for most creatures, that ‘purpose’ is entirely oblivious to the life forms themselves. In the business world, however, adaptability must be purposeful.
For most organisations, purpose is not well thought through or defined. It is often on par with a meaningless catchphrase or sound bite, such as, ‘Our Purpose is to be No.1 in our marketplace’ or ‘Returning double digit, year- on-year shareholder value.' Perhaps this provides a clue as to why most organisations do not deliver long-term prosperity for customers, employees and shareholders.
Unlike the natural world, organisations are free to create a shared purpose upon which all stakeholders agree and then develop structures and practices that keep the organisation and its services aligned with the market and customer needs.
Finally, organisations are also free, in the light of evidence, to revise their purpose. Adaptive businesses keep asking themselves, ‘Is it still the right purpose?’ and ‘Are we exploring all avenues towards our purpose?' Organisational adaptability has a mind-set open to a new purpose coupled with the ability to redirect most everything quickly and safely toward an alternative goal when the situation demands it.
After Sense and Respond: The Journey to Customer Purpose (Palgrave Macmillan 2005) was published, Lloyd Parry International’s continued research brought our attention to the importance of the culture and work-climate, which promotes or inhibits the achievement of long-term profitability. Over eight years, in conjunction with work psychologists and researchers, we have developed an Adaptive Organisation Model to identify the features and attributes of adaptive organisations. As part of this, we developed a work-climate diagnostic to identify the areas of a business most in need of corrective action. The model provided in- depth analysis of where operating capabilities need to be created and people practices modified to create an engaging, learning, leading and continuously adapting business.
The work-climate is the combined perceptions, feelings, and behaviours of staff, managers, and leaders.
Extensive research has proven a link between the climate and overall operational performance of an organisation, and this connection demonstrates that the environment is a predictor of sustainable financial success. As a result, Climetrics®, Lloyd Parry International’s organisational diagnostic, has been developed to identify if and how management activities, measurement systems, structures, and delivery capabilities combine to create a business that leads to high performance and long-term profitability. It determines the current state of the business and where it is likely to end up.
The Climetrics® diagnostic provides insights into the following:
- Operating strategies
- Operating structures
- Managing practices
- Perceptions, feelings, and behaviour of staff, managers, and leaders
- End-to-end service performance
- Innovation and change- ability
- Customer centricity
- Leadership styles
Then, the prognosis considers:
- Work outcomes
- Employee performance
- Job satisfaction
- Ability to implement quality improvement
- Organisational adaptability score
The Climetrics® survey also pays attention to the organisation's ability to:
- Engage - Understand, define, and lock onto customer needs
- Learn - Make sense of the customers' needs and their environment and share the information across the business
- Lead - Make a case for improvement and lead change at all levels of the organisation, not just the executive
- Improve - Act and implement improvements and innovation to serve customers better
The online survey results combined with on-site visit reports are used to determine the Organisational Landscape type and its current underlying design principles. Typical landscapes include: (1) mass production, (2) mass customisation, (3) networked specialisms or (4) adaptive.
Using the unique Climetrics® surveying methodology, which pinpoints and prioritises areas most in need of change, the team at Lloyd Parry International generate an Organisational Climate Profile called a Climatograph. We will provide an adaptability score that indicates how rapidly the business can respond to the marketplace and changes in strategy. A Climetrics® diagnostic will lead to a plan that, when executed, creates a superior work- climate through the adoption of the Adaptive Organisation Model. A fuller explanation of this topic will be given in our forthcoming guide on work-climate behaviours.
The traditional industrial model in which processes segment across departmental specialisms and change is driven in a top-down, ‘direct and control' fashion. Most staff do not need to understand much more than their role within a departmental silo. Employees are allocated tasks, and when completed, the product or service is passed along to the next department. This model can function effectively in environments where all is relatively fixed and little or no problem-solving or cross-organisational thinking is required. Today, however, demand for change is constant, and continued success and profitability requires a cultural sea change – from an industrial model to a new, adaptive one that enables organisations to be nimble in responding to and propagating change.
The architecture of the Adaptive Organisation has less to do with traditional domain specialisms, some of which are still required of course, but more to do with significant levels of collaboration, critical thinking, problem-solving and controlled experimentation.
In the Adaptive organisation, all staff can become creative problem-solvers, critical thinkers and adaptive; those skills, in an Adaptive setting, are not limited to the few who have been recruited explicitly for them. ‘Smarting up' teams means enabling everyone to carry out much of the decision-making that has previously been done by managers.
Many traditional improvement tools and methods may be blunt and are often ineffective. In many cases, they are also applied for the wrong reasons. Those same tools and methods, however, when used in concert towards an Adaptive enterprise, are transformed into more effective instruments of change. For example, the Adaptive features of Lean, Agile, Kanban and Scrum align well within Adaptive organisations. When used sensibly together, they can create entirely new capabilities where the workforce itself can change what is needed to meet new demands.
The framework is a comprehensive learning system and contains many elements. One of the main advantages of using the Climetrics® diagnostic is that it enables organisations to select from the framework, as only on rare occasions would all the components within it be necessary. This information is then used to create a transformation route-map, which may also address specific prevailing business issues. Each route-map is tailored to the client situation, and the combination of elements selected will also be unique.
The infographic illustrates how organisations can create the four business capabilities of Adaptive organisations, as outlined previously, by using the implementation cycle of design, engage, adapt and adopt.
It may come as no surprise that Lloyd Parry International’s symbol for the Adaptive Business Model is a chameleon, because of its ability to change rapidly in response to any environmental colour changes.
Organisations have methods and approaches to ensure they engage with customers and understand and quantify their needs. In addition, they can measure their ability to satisfy those needs of customers. In addition, the organisation needs to measure how well the end-to-end business performs in delivering products and services.
Organisations have methods and approaches to enable sharing of customer and external market information between departments, managers and leaders.
Organisations have methods and approaches to enable themselves to make decisions and identify areas in need of change.
Organisations have methods to enable people to improve, innovate and change day-to-day work activities to better serve customers.
The cycle for moving the organisation towards and achieving an Adaptive Organisation and Culture is explained using four developmental stages aimed at specific roles within the company, which are:
- The Design stage is planned by the Change Architects
- The Engage stage is led by the Change Makers
- The Adopt stage is facilitated by the Change Agents
- The Adapt stage is developed by the Adaptive Business Manager
Each of these stages has been broken down into course modules that enable organisations to acquire sufficient knowledge, master practices and demonstrate behaviours to initiate and sustain the journey to a fully mature Adaptive Organisation and Culture.
In this step, the change architects develop methods and approaches to design change initiatives in response to business and market pressures. They determine the scale and complexity depending on the nature of the business change and organisational developmental requirements.
Work-Climate Diagnostic Climetrics®
The Climetrics® Diagnostic examines the psychological profile or surface layer of organisational cultures that incorporates the thinking, feelings and perceptions of employees, managers and staff. It is used to determine operational health, current adaptability and to forecast long-term outcomes.
The results of the Climetrics® work- climate diagnostic enable the identification of any of four organisational archetypes: Mass Production, Mass Customisation, Networked and Adaptive. Each creates a different work climate, competitive platform and differentiation.
The results of the Climetrics® Work- Climate diagnostic also enable the change architects to identify areas in need of change and then develop organisational structures and systems that generate more productive work- climates and operating practices.
When the current state has been determined, the change architect moves towards a design for the future using a navigation suite, which includes our Café Change Planner, to create a route map that incorporates the executive strategies, organisational development and deployment plans.
The change makers create methods, systems and practices to enable their organisation to develop internal change capability, utilising leadership, coaching and mentoring, change management, and influencing and planning skills.
They design methods that enable organisations to simplify and clarify their goals by aligning customer purpose, employee purpose and business purpose into a single, common one.
Adaptive Business Change Management involves understanding the long- established systems and patterns of behaviours that impede the establishment of an Adaptive enterprise. Change makers are required to lead and promote the people dynamics in order to create willing contribution and effective change.
Change makers need to understand and master all of the physical aspects of an organisation, including: organisational structures, reporting systems, measurement, project plans, visualisation, management systems, operational reviews, and reward and recognition systems. Understanding and mastering these parts are essential for the correct sequencing and combining them with people-change dynamics.
They create a variety of approaches for gaining consensus for change to mobilise groups, creating alliances, engage and developing the willing contribution of staff, managers and leaders.
Change agents enable traditional coaching communities to coach and mentor the adoption and integration of Adaptive methods into everyday work. This allows for the development of end-to-end collaboration, critical thinking, problem-solving and improvement activities at all levels of the organisation.
Visualise the Work
Visualising the work provides a familiar backdrop for change by creating a map of the entire organisation and its relationship to customers, suppliers, end- to-end workflow and the marketplace.
Measure the Work
Measurement systems that concentrate on how work is generated in response to customer needs and how value flows through the end-to-end business need to be designed by the change agent.
Perfect the Work
A process of continuous change involves moving towards perfection, which ensures the delivery of business objectives by identifying new and better ways to deliver value.
Develop the Workforce
The change agents use the Adaptive Organisation learning cycle of Engaging, Learning, Leading and Improving to enable staff to work within and manage an Adaptive Organisation.
The managers provide skills, knowledge and behaviours to manage an Adaptive business to sustain and enhance business delivery capabilities, while engaging the willing contribution of staff.
Managers create and maintain the work climate and behaviours that are required to manage an adaptive business. Progress is measured periodically using the Climetrics® diagnostic system.
They plan, organise and oversee work activities to ensure end-to-end co- ordination that delivers high value, optimised costs, together with efficient business and customer outcomes.
They ensure that the business maintains the resources and capabilities to deliver value continuously and respond to demand.
Managers guarantee continuous change to develop innovative products, services and delivery methods that drive continuous improvement.