Successful Business Evolution in the 21st Century Starts with a Radical Change of Mindset

Authors: Farinne Georgeopoulos and Tatika Catipay. Copyright © Exelix.

‘The only true constant is change itself’ Heraclitus (c.535 – 475 BCE)

No other century has had such immeasurable reliance on technology to run and propel businesses towards growth. In 2018, worldwide IT spending was reported at US$3.7 trillion which is an increase of 6.2 percent from 2017, indicating the robust investment pursued by companies globally in leveraging technology to drive competitive advantage and profits.

Nevertheless, 90% of start-ups fail and the lifespan of listed companies globally are averaging 18 years compared to 61 years in 1958. This high rate of failure is arguably related to the uncertainty of economic conditions, global geopolitical tension and cyber insecurity. Simultaneously, many companies are not sustainable because they could not sufficiently adapt to the demands of the 21st century.

Sustainability has never been as challenging as it is today. For companies to stay relevant and keep up with the rapidly changing and unpredictable market, they must continuously evolve.

Today’s emphasis on measurable KPI values and actionable analytics to gauge success is a rather vague concept that does not necessarily do justice to the need to calibrate business for long-term evolution.

It is essential for a business to understand that evolution is both a necessary process and an outcome they are striving for on a daily basis. This continuous evolution becomes its ethos whereby a business can ensure its growth, relevance and sustainability in the market.

What does it take for a company to succeed in a complex global market?

The right combination of 1.) strategy, 2.) structure, 3.) people, 4.) operational processes, 5.) applied technology and 6.) organisational culture are key components that set a business on the path towards a trajectory of continuous progression. Many companies fail to understand that these elements are not merely technical, but they have to be modelled on the dynamic process of transformation.

Unfortunately the traditional business models of the past century have often fostered an inflexible structure, which hampers innovation, competitiveness and growth. We have witnessed the demise of some old titan companies such as Kodak, Xerox, Nokia, Toys R Us and others; mainly due to their lack of innovation in a highly competitive market. It has become evident that a radical paradigm shift is essential in running a sustainable business.

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Strategy is collective and a continuously evolving collaboration to create value.

1.) Strategy. The evolution journey begins, but does not end with strategy. The concept of strategy should not only be a framework or a set of actionable points for management and key personnel in the company. It needs to be a dynamic, collective purpose that defines vision and values alike, that permeates the entire organisation and gives every single stakeholder a sense of being personally and emotionally invested. Therefore, it is vital for the organisation’s soul to pervade each and every individual.

A close collaboration of all stakeholders is essential to create and capture values for the organisation and its customers. Deliverables and milestones should be clearly defined, and actionable priorities and outcomes distinctly understood.

2.) Structure. In order to support collaboration in an evolving organisation, a flat network structure must be in place to facilitate scalability based on needs and priorities rather than a tall pyramid structure based on positions and functions. The flat network structure encourages mobility and flexibility amongst employees.

Whereas the traditional business structure is a rigid, functional top-down hierarchy, the flat, networked organisation is an open ecosystem that can support physical and virtual interactions, and that fosters dynamic, borderless communities to encourage ideation, exchange of practices and knowledge transfers. This seamless structure is held in check by clear and robust governance where teams are accountable to and interdependent on each other. In this way, value creation is made accessible and shared by every person in the company.

6 out 10 millennials, the largest segment in the workforce are on the lookout for a new job.

3.) People. It may sound obvious, but the way a company trains and motivates its staff determines to a large degree its success or failure. People not only create value and impact the longevity of the organisation, they also incorporate the strategy and set processes in motion. In this era, having versatile, creative and enterprising people on board is key to capturing values, keeping abreast of the market but continuously adapting to change.

In order to harness entrepreneurial skills in the organisation, management should encourage role mobility wherein people can opt to move and transfer horizontally and vertically between roles and teams.

Presently, six out of ten millennials (who represent the largest segment in the US workforce) are said to be on the lookout for a new job, and only 29% of them are “emotionally and behaviourally connected to both their job and company”, which costs the economy $30.5 billion annually.

It follows that championing the formation of interconnected communities both within and outside the organisation can help develop cohesive, loyal talent especially amongst the millennials and at the same time foster collaborative teams who can deliver results and work together for the continuous growth of the company.

Encouraging participative leadership empowers people and advocates collaborative stewardship in reaping sustainable successes for the organisation. Hence, it can be argued that people-centric businesses are more likely to outlast those that are not.

4.) Process. Agile processes are the daily blueprint that anchors and drives a business to evolve. A business is said to be agile when it prioritises speed, delivery and execution as well as collaboration amongst its teams and people. Its success is reflected in continuous learning and knowledge-sharing in the organisation, resulting in constant process improvement and positive change.

A dynamic process is also marked by action-oriented decision-making across hierarchies. This invigorates ownership of the tasks and deliverables, especially among the employees.

When people take ownership of their work, they also treat the business as if it were their own and will care for its advancement. This is only achievable through the availability and transparency of information to every employee in the company.

5.) Technology. Technology has been given credit for revolutionising how business is done today. At the same time, it must not become the organisation’s only focal point and driver of progress. Since businesses can only benefit so much from technology, it should be an enabler that facilitates the sustainable growth of the company.

For all the hubbub of big data in businesses, less than 0.5% of data is currently being analysed and used. This figure will change as more data is being collected and strategically applied.

To guarantee business longevity in this century, companies should utilise workable operation systems and tools that they can successfully integrate across the wider organisation, impact their bottom line; and enhance their strategy, people, processes, culture and profit.

6.) Culture. Culture is the key ingredient that envelops all other elements in an organisation to constantly evolve. The importance of having the right culture was previously underestimated, and it is now being astutely recognised as paramount.

As shifting market conditions require the modern workplace to be more adaptable, a top-notch organisational culture has become an imperative differentiation. Millennials particularly value company culture above all else, and it is a vital element for their continuous commitment and engagement in the organisation.

Part of Microsoft’s and Google’s success, for instance, lies in attracting young high calibre talents by not only offering them financial incentives, but also an outstanding organisational culture.

By conjointly crafting its strategy and structure, a business can design a capable culture that enhances its competitiveness in the contemporary market.

A people-centric culture is characterised by engaging and empowering every stakeholder to operate with fast, agile decision-cycles and processes, collectively working toward a common purpose.

Moreover, a business should cultivate a spirit of entrepreneurship and active engagement. This can be achieved by motivating, challenging and guiding its people towards success, while at the same providing a trusting environment to experiment – a safe place where smaller errors and failures are possible in the pursuit of bigger successes.

A conscious decision to shift the organisational mindset to transform will become part of your DNA.

Organisations must continually evolve to stay relevant, innovative, and competitive. Choosing the right approach to adaptation and growth is challenging. Consequently, companies that anticipate and adjust to all of these profound shifts will have the best chance to succeed in the new era.