Leadership And Discontinuous Change

The three scenarios

Agility and its companion, learning, represent a journey, not a destination: a journey covering three Territories, (T1 - instruction, T2 - exploration, T3 - play); a journey dependent upon the right leadership; a journey punctuated by inherent discontinuity.

The three scenarios portray how learning unfolds in virtually every walk of life. Much as one might peel an onion, beneath agility and learning lies individual and, by implication, the team's mindset: how each of us interprets the world - the mental model we access to define reality. Our assumptions about work and organisational success frame our behaviour.

To survive in the white-water we have entered demands culture savvy and, above all else, an ability to quickly appraise and respond to the ever-changing world around us. The new reality? Personal survival is ultimately about how resilient and agile we are as a leader. And resilience isn't simply about "bouncing back." It means coming out of a world shaking event like COVID-19 even stronger.

Traditional hierarchy

The journey from T1 to T2 and then on to T3 is not for every organisation. Those operating within a commodity-type market, where the value proposition is exclusively drawn out of the price of the product or service, often decide that a T1 organisation is an appropriate fit with a business model built around being the low-cost producer. Managing a group of young software engineers on another continent and a T1 approach may be the way to go. Operating a mine in a developing country where the work population is poorly educated and/or where they lack a common language, then T1 may well be a sound decision.

This does not mean that all T1 businesses eschew empowerment and employee involvement. Through an ethos of continuous improvement and employee development (instruction), a number of leaders have pushed the T1 model to the very edge of what is possible ("enlightened" T1). The dilemma being, because such organisations are very slow to change they are ponderous competitively. The very antithesis of agility.

The process organisation and beyond

A good many organisations (e.g., Toyota, 3M, Google) have evolved, what can best be described as, a "parallel structure" - organisation forms where, although the day-to-day work gives little opportunity for initiative (T1), time is set aside to allow front-line teams to redesign the business process that contains the work being undertaken (T2), and/or are given the opportunity to help create tomorrow's product/service (T2/T3).

Other business sectors have little choice but to move to an organisation form dominated by T2 and beyond. Here we start to find a far more engaged and fully contributing employee. Teams who, as the culture moves into T3, start to self-organise. Organisations that embrace innovation and reinvention as an extension of the freedom to act that a T2 or T3 culture affords. Businesses where the design of the organisation (structure) mirrors, given the choice, how people would choose to work together.

Customers vote with their feet

The ultimate arbiter of organisational effectiveness is the marketplace. Where the value proposition is based on a compelling customer experience, where the business model means the product or service must be continuously reinvented, or where access to intellectual capital defines market success, a T1 way of working will not deliver the level of innovation, organisational agility, or speed of responsiveness needed. Artificial Intelligence/robotics will change this assumption in the future but, as a simple economic reality, T1 work, everything else being equal, sooner or later migrates offshore to a low-wage economy.

Not so fast! The need to be close to the market, tax advantages, security, transportation costs, and a host of other reasons often mitigate against moving offshore. The T1 organisation isn't a throwback. It isn't obsolete. Indeed, even in advanced economies, in more than a few business sectors, it is still the dominant form - and from our own work with clients, far more prevalent than you might think. Microsoft, Apple, and Google get all the publicity but, in truth, they are outliers.

The journey being described (T1 to T2 and, where needed, to T3) is not a journey every organisation will want to embark on, and it is equally not a rite of passage that all leaders are capable of charting.

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