Can you afford to choose between people and process for sustainable business growth in the 21st century? Two business leaders present the case for each
Agility and adaptability are no longer the quirky characteristics of unusual businesses. They’re critical in delivering growth in organisations of all shapes and sizes, and in all sectors.
In order to address the challenge of agility, talented individuals are needed. New processes and procedures may have a part to play, but people must come first, freed from the chains of “how we’ve always done things”, and empowered to innovate so their organisations can adjust to a constantly changing world.
To understand the role that human resources professionals must play in building an adaptability advantage in their organisations, the CIPD has teamed up in the last six months with management expert Gary Hamel and the Management Information Exchange (MIX) to run a hackathon, in which participants came together to debate a single, compelling question: How can we stay ahead of the pace of change, and make our organisations truly adaptable and agile?
We asked the CIPD/MIX hackathon community – 1,700 individuals from around the globe who volunteered to participate in the project (www.cipd.co.uk/hamelhack) – to identify the enemies of adaptability. They quickly identified 12 and many of these related to ineffective or over-dominant organisational processes that inhibit people from doing their jobs in ways that they know work best.
One of the top enemies, for instance, is “inflexible business practices”. Highly optimised business systems can be great for efficiency, but deadly for adaptability. Inertia sets in. Skills become more specialised. Change becomes harder to achieve quickly and must instead be tackled in incremental steps.
“Rigid structures and hierarchy” were also on the list of enemies of adaptability, creating functional silos, political fiefdoms and control-based hierarchies that discourage individual initiative, and work against a team or workforce’s ability to respond to change.
Highly optimised business systems can be great for efficiency, but deadly for adaptability
“Lack of diversity” and “insufficient experimentation” also made the list. Participants highlight the fact that management systems often value conformity and cohesion over diversity and divergence. This attitude can quickly suffocate the flow of ideas, opinions and options for change from the workforce. Instead of encouraging bottom-up experimentation and innovation, managers insist on adherence to top-down processes and analytical methods.
By contrast, when the group turned its sights on identifying practical solutions to these problems – in effect, the design principles for adaptability – their ideas focused on unleashing diverse, creative talent throughout the organisation.
They included transparency and openness – energising and connecting people across organisational boundaries; creativity – unleashing the creative ability of individual employees; and valuing diversity and dissent – being open to new thinking instead of sticking rigidly to ways things have always been done.
These principles, it was agreed, could help to create organisational cultures where employees learn from one another, at all levels, rather than through processes shaped by strict and rigid hierarchical chains of command.
Radical action is required if our organisations are to avoid being overtaken by smaller, nimbler competitors. If you want to build the winning organisations of tomorrow, talent holds the key.
Susannah Clements is deputy chief executive of the Chartered Institute of Personnel and Development (CIPD).
Talented people are vital to any business. But if they are trapped in poor processes and not doing things well or not developing better ways of doing things, then they won’t deliver. And the good ones will leave.
Alas, most organisational processes are stuck in the 20th century which is holding talent back. One classic example is change management, critical to a truly agile business. The evidence is that we badly need to change the way we change.
CMI’s recent research showed that nine out of ten organisations had undergone some form of change in the last 12 months. Yet most of it was badly managed, leaving the vast majority of employees to feel that morale, loyalty and motivation were all reduced as a result of those changes. Less than one in three employees thinks senior management is good at handling change. Worryingly, this number is far lower than our previous study in 2007. In sum, the more we change, the less good we are at it.
We still haven’t spent enough time understanding how to design processes that draw the best from people
Sadly, the same can be said for many business processes. When was the last time you had a truly great performance review? Saw a great innovation process? Or went through a top-class management development process?
Although many business leaders talk of the importance of talent, we still haven’t spent enough time understanding how to design processes that draw the best from people at work. We hire great people, train them in functional skills, such as finance, engineering or IT, and then promote them because they are good at their jobs. Suddenly, they are in charge of people and projects. They are managers. Yet we don’t train them how to manage, but still and somehow expect them to succeed.
Only one in five managers is properly trained. And it shows, because as our research reveals, only one in five managers is regarded as highly effective. That figure leaps to four out of five in high performing companies, which have in place the processes to maximise their investment in talent. Good management development is an essential business process, like change management or any other.
This weakness is why CMI is leading a Commission into the Future of Leadership and Management. We want to work with the wider community on innovating and flexing these processes, bringing them into the 21st century. That means being more agile, less hierarchical, more coaching and less controlling; more inclusive and diverse; less exclusive and samey; more flexible; less afraid to fail; and focused on outcomes not face-time.
Ultimately the choice of talent or process is flawed. Agile businesses need both. Our suggestion? Get your talented people to redesign your outmoded processes. Share your example of best practice with others through the Commission: (www.managers.org.uk/managementfutures).
With luck they might just help bring our way of working into the 21st century. Getting your processes right is a critical foundation for making your talent and your business happier, healthier and more sustainable.
Ann Francke is chief executive of the Chartered Management Institute (CMI).