Photograph: Paul Engel/Unsplash
The pandemic has brought massive change to many businesses. Nevertheless, while Covid was an accelerator for change, evidence of emerging trends was clear well before the pandemic.
These changes will have a permanent impact on some enterprises. More importantly, the pandemic has also opened the door to great opportunities; but to take advantage of these opportunities needs a re-think of how companies are structured. A fluid business is an agile business that can embrace change and develop a dynamic working environment.
Adaptability, speed, innovation and resilience are all important components of a fluid business. These are the pillars your enterprise can use to transition to an organisational architecture that will ensure your company is fit to thrive in a post-Covid business environment.
Clients can see their markets accelerating but struggle to keep pace. Decades of bureaucracy have resulted in slow decision-making and layers of complex communications processes – stifling their attempts to innovate at the speed they need to.
Fundamental changes are impacting the business world:
Information abundance. We sometimes feel overwhelmed by the masses of information that floods into businesses. However, this torrent of information can provide a feeling of endless creative possibilities, the ability to learn faster and create something new.
Speed and interconnectedness. Our business world is turning faster than ever. If you combine the two factors of speed and interconnectedness, this leads to unpredictability. Covid-19 was totally unexpected. We realised what unpredictability means, and it showed us what we require to manage it: organisational structures that empower us to manage and lead differently.
Becoming a fluid business will mean fundamentally flattening the structures your company currently has in place. I speak to NTT DATA’s clients who can see their markets accelerating, but they struggle to keep pace. Decades of bureaucracy have resulted in slow decision-making and layers of complex communications processes – stifling their attempts to innovate at the speed they need to.
Agile organisations can improve their operational performance comprehensively. To cope with the changes in the business environment, then, requires a structural change: a change of values and to the DNA of the company. For organisations to master this structural shift, they need to ask themselves several questions:
How do we lead?
How do we create value collectively?
How do we collaborate?
How do we budget to be able to change?
Do we have a vision that unites our firm?
The answer to these questions, in most cases, is that organisations need to change the focus of their business.
Change focus from efficiency to responsiveness
The focus on responsiveness led a worldwide fashion company to decide to run its production lines only around 75-80%. This may initially seem a wild decision to make, but this enables them to take up customer feedback from their stores, have their designers make changes quickly, adapt the product to customer needs, insert the new product lines or product trials in the production quickly based on the capacity buffer, and bring their products to the retailers to test out.
Change focus from control to empowerment
In the past, businesses would create a strategic plan for the year. This approach to planning is no longer valuable if an organisation is to become fluid and agile. Companies must acknowledge that they cannot control everything but that they need to empower the organisation to reach the final goal. This change in focus requires autonomy and the ability of employees to experiment. Employees need to be encouraged to test and play within a culture of empowerment that also accepts failures as routes to learning.
Making flexibility the norm
How businesses organise their structure is often the fundamental issue with their ability to serve their customers, support their commercial partners and be the innovative company they can become. Agility and flexibility can’t be integrated if a rigid organisational structure is in place. The inherent inflexibility won’t allow the transition to a fluid architecture.
I am proposing a new organisational paradigm that everyone in the business will need to support. A fluid organisational structure delivers flexible working practices that will become the norm and opportunities to innovate and collaborate in new ways that can often lead to unforeseen benefits.
A lot of what’s recommended in this article may be quite a departure from what leaders typically learn from management books. It requires a fundamental change in leadership mindset. Leaders need to step out of their comfort zone to enable the change in their organisation. Their role will be very different; they will be an orchestrator, a coach, a mentor.
The change towards enterprise agility can only be achieved if there is support from leadership directing their organisation and empowering their business to be fluid.
The change towards enterprise agility can only be achieved if there is support from leadership directing their organisation and empowering their business to be fluid.
The age of the top-down business structure needs to be swept away and replaced with new practices, new structures, and vitally, new cultures that embrace the new world we are entering with the tools and mindset to thrive.
Managing fluidity
Anything fluid, by its nature, is difficult to control. When I define what NTT DATA means when we talk about transitioning to a fluid business structure, rather than talk about control we focus on leadership, partnership, and collaboration. These mechanisms can be used to embrace a fluid business architecture.
This new approach to business organisation is not simply the replacement of one form of hierarchy with another. Instead, it is about creating unique ecosystems within businesses that use the traits of a fluid organisation that lead to long-term innovation.
A fluid business can refocus quickly, change priorities towards value-creating opportunities and redirect its people. The organisation, overall, has a high awareness that flexibility and organisational change are essential and inevitable for company success and that employee engagement, as well as innovation focus, is crucial to stay competitive.
A fluid business also has a vital technology component. Fluid ecosystems are created with collaboration tools and data analysis to support the new fluid structures being built. Technology can be used to connect and support the workforce, who will be instrumental in implementing the changes needed to move to a flexible working ecosystem.
When an agile structure is in place, several events occur simply because the condition for their manifestation is available. Projects become dynamic entities that are not rigidly defined. Projects evolve and change as the fluid ecosystem they are now part of allows this to happen. The idea that “permission” is no longer needed releases creativity from teams and individuals. Failure and then blame become archaic. Sharing, communications, and transparency become the norm and not the exception.
People and places
Making what can be significant transformational changes to a business’s structure will of course impact the workforce. It’s critical to appreciate how moving to a more fluid structure will also mean changing company’s culture. It’s inevitable that some members of the workforce may not appreciate, or want to participate in, the practical changes that must take place to embrace a fluid approach to business organisation.
Enterprise leaders face the challenge of uncertainty and how they define future growth. With the four-phases framework (respond, recover, reshape and reimagine), NTT DATA provides leaders with advice and best practices for the future success of enterprise value creation and strength. Leaders who seize the opportunities fast will emerge from sudden changes as long-term winners.
There must be a conscious decision to make the changes needed to create the ecosystem required for a fluid organisational structure. Leadership must want to change their enterprises.
However, even once cultural agility is achieved, organisational agility needs to be managed to uncover the potential. We need to take a step back, and take a look at our private lives.
People naturally collaborate, ask for help and interact in somewhat fluid private networks supported by technology and social channels such as Facebook and LinkedIn. We find ways to look for the information we need and form teams to achieve our goals.
This is something organisations also need to project to the working environment to manage the increasing complexity. We collaborate with people in our work environment, which is structured like a network. Fluid businesses have information flowing around in interconnected teams. Distributed organisations are also connected.
The age of the top-down business structure needs to be swept away and replaced with new practices, new structures, and vitally, new cultures.
The focus should not be whether resources are employed in one organisation, but rather on the value being added through collaborative working as a network. Teams will be formed, shaped and then separated again to start a new journey. This will empower businesses to tap into resources around the globe and balance the need for specialists and generalists at the same time. This should also guide integration with customers. The tech industry already has embraced this concept for openness and networks collaborating with open-source projects.
An important factor for organisational agility is the shift from value creation of individuals to value creation in collectives. This also requires a new perspective on what we expect from employees:
Confidence in their own abilities
Functional expertise
Risk-taking, but with a willingness to learn
Co-operation
Soft skills.
A paradigm shift
We all have seen enterprises that were not able to adapt at all or to change fast enough. They just disappeared from the market. Enterprise agility is not only necessary for organisations to be competitive but simply required to stay in business.
Agile organisations move faster and stay competitive
If an organisation realises that the outside pace is faster than the inside pace, they are typically in trouble. Agile organisations can move faster and increase their speed versus the external environment, which allows them to stay competitive.
Agile organisations unlock untapped potential
With the development in technology, the increase in data accessibility, and the way people connect, there is just so much untapped potential. Agile organisations can unlock this potential and turn it into a value-creating activity.
Agility positively impacts the bottom line
According to research from McKinsey, agile enterprises achieve a 20-30% improvement in overall financial performance, positively impacting their bottom line. This impact mainly comes from improvement in operations performance, increased employee engagement, and improved customer satisfaction.
Agile enterprises cope with continual reorganisation
Today organisations are slowing down their activities as a result of regular ongoing reorganisation efforts. The way to a fluid organisation is agility. As a fluid organisation, the company can constantly change, reflecting fluctuating customer demands to create new value-added services.
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This new perspective can mean radical change across the business. Still, as companies have reshaped themselves at speed over the past year, making permanent changes to become a fluid business is the last transformational step to take before fully embracing the opportunities that disruption yields – allowing them to bend, not break, in the winds of change.
