Hyper-agility and multi-speed business are concepts that leaders of the future must understand and apply to be able to deliver results in a world that is constantly changing.
An organization operating at different speeds
All organizations need to deal with digitalization. There is no way around it. However, even if digitalization is essential, it remains a half-truth to claim that all companies are digital. I would argue that we are still equally analogue. For example, most banks still have branches and traditional banking systems, whilst at the same time offering internet banking. A business must be able to relate to multiple realities at the same time across the organization and understand that these realities develop within the organization at different speeds.
The liquid organization
In the ‘old’ days, before 2005, linear business planning worked well. Today, however, we are moving into something new, because organizations must develop in different ways and at different speeds. For example, where we previously saw very heavy and rigid structures for research and innovation, we are now experiencing a softening of those, with the emergence of staff-on-demand, the so-called liquid organization.
We recently observed a good example of this well-known European financial institution that instead of developing its own algorithms, as it had done previously, chose to post them as competitions on a giant online market place for developers. These developers then solved the tasks in parallel with the internal organization. To date, the internal organization has still NOT developed the best algorithm. This particular institution has therefore transformed innovation process and by doing so opened the door to an abundance of external knowledge and ideas.
One-size-fits-all is dead
The vast majority of organizations have been practicing a one-size-fits-all approach to leadership. This approach is now dying. The digital natives entering the labour market, make it challenging to lead all employees using the same approach. This new generation thinks significantly differently and are motivated by different factors. Many organizations have learnt this the hard way, experiencing attrition rates of up to 35-40% among graduates compared with the more traditional 10-15%. Traditional mindsets and a one-size-fits-all leadership style make it harder to retain digital natives. So how should you lead in organizations that operate at different speeds? We see that it requires the creation of a unique mix of organizational, governance, leadership and cultural capabilities to succeed.
We have researched the concept of multi-speed business, where organizations have stable, traditional, analogue businesses operating alongside faster moving operations that have a significantly different culture.
Multi-speed business is a reality
What does multi-speed business mean for future leaders? It means leaders must apply different decision-making criteria in the traditional part of the organization compared to the fast-evolving parts of the organization where the leadership style must be more agile.
We refer to this as hyper-agility. Agility is a term often associated with project management, however, we interpret this approach much more broadly. Hyper-agility is a leadership approach, which applies across all dimensions of the organization in terms of innovation, governance, decision-making as well as culture and mindset.
Working with hyper-agility, however, still requires alignment in the system, just not with a one-size-fits-all approach. Behavioural culture and mindset must be adjusted to the particular speed with which that department is working; to both operate effectively and avoid uncertainty arising among employees.
Leadership in multi-speed business
So how should we organize our business to keep up with this rapid development? In the future we will need to lead by defining direction, and not just setting KPIs as we used to. We have to give our employees the space to find their own way. Structures must be able to adapt as they become disrupted. The reality that what made us successful yesterday will be gone tomorrow. There will be very little relevant experience to lean on.
An example of this we have seen is an appliance maker in China that had stagnated in terms of innovation and growth. To change this, they reorganized the business into 2000 self-managed units, each devoted to a customer - a retailer or group of retailers - and assigned full decision-making authority. These units were then assessed as individual businesses. A direction and a playing field for deliverables were defined and a greater adaptability in the production facilities were introduced, but other than that, it was up to the independent teams to engage with clients, listen to specific client needs and produce accordingly. Within 12 months the company experienced significant growth.
Hyper-agility is key
The above is of course a rather extreme example; however, the leadership approach of leaders of tomorrow must be sufficiently agile. Leaders must set direction, define the playing field and act in a supportive manner, and employees must be proactive and take responsibility. At the same time, we must be able to lead very different types of employees from the digital hacker to the classical engineer.
If companies do not proactively embrace this new reality, their foundations will crumble. Typical signs of not embracing this new reality are poor retention of the young generations, the traditional business diminishes and a lack of innovation leading to future business opportunities. Hyper-agile leadership is key across all dimensions of the business. The leaders of tomorrow must find ways to adapt their leadership style to this new paradigm to be able to stay relevant in the future.
Claus Rydkjær is the CEO of Mannaz. Prior to joining Mannaz, Claus served as a Managing Director/Partner at Accenture in the Northern Europe. Earlier career highlights include leadership positions with Microsoft in Europe, management consultant positions with Deloitte in Denmark, and corporate development positions with Radiometer in Europe and North America.
Claus has more than 20 years’ experience with business and technology transformation as well as digitisation. He has worked with numerous of local and international companies and public sector organizations to help them address the challenges and embrace the opportunities provided by a changing business and technology environment.