The Most Critical Capability for a Fragmented World
As the global business ground rules rapidly fragment, the need to develop organisational agility through cross-boundary collaboration becomes more important than ever. Whilst there are few businesses that don’t have some form of ‘one org’ programme, there are fewer still that have truly succeeded in making collaboration a core organisational competency. Many firms fail in their attempts to ‘drive synergies’ due to an over reliance on technology, corporate initiatives or OD. To truly foster agility, businesses need to tap the potential of hidden networks to allow vibrant, multi-functional communities to emerge throughout the enterprise.
Up until around June 2016, unpredictable change in the commercial world was uncomfortably predictable. We knew that if the banks were overleveraged, an economic shock meant we’d be in for a much harder ride than in 2008, but we also had better data to predict where the weak spots were. We also knew that unpredictable change was in a large part still driven by progression. The drivers were clear; innovation, globalisation, seismic shifts in the behaviour and needs of consumers and employees as well as in the global economic landscape. The pace of change was increasing and it was all very overwhelming, but at least we knew broadly what direction it was all going in.
Then in June came the Brexit vote, followed by Trump’s election victory and the rise of populist politics across many of the world’s strongest economies. In their wake, we mourn the death of predictable-unpredictability. Trump’s first 10 days in office saw a breath-taking shift toward retrenchment behind trade barriers and borders. The EU, Russia and China are looking like asserting themselves in equally dominant ways. So now, in addition to progressive change from disruptive technologies and new business models, organisations must now deal with regressivechallenges from restrictive or uncertain international trading conditions. As the international business environments rapidly fragment, firms need to be more responsive and fine-tuned than ever.
The criticality of collaboration
Perhaps counter-intuitively in a world that is dividing and dissecting, collaboration now comes to the fore as the priority organisational capability. By collaboration, I don’t just mean a small group of skilled professionals working together politely on a shared objective, I mean the challenging, multi-functional, joint-disciplinary, cross-boundary partnerships that have been widely acknowledged as being critical to building organisational agility.
Trade barriers that drive greater localisation mean that firms may be more at the behest of national governments, reducing their ability to tap into the advantages of ‘umbrella’ corporate strategies.
Increased localisation favours those brands that can adapt more keenly to local market conditions, creating the need for more specialised adaptation and innovation to meet specific demands.
Furthermore, a rise of nationalistic sentiment may increase a desire for home-manufactured products as consumers and governments seek to balance out trade deficits, limiting the extent to which businesses can leverage their supply chains globally.
At its extreme, a limit in the flow of capital, goods and workers might threaten a business’s ability to operate at scale or to innovate, leading to reduced appetite for expensive, high risk investment, (would we ever have seen a production Tesla with only a national market or two to target?).
Collaboration is key to providing tailored service within the bounds of local regulation, whilst maintaining global consistency, driving efficiency and breaking down obstructive internal bureaucracy. It is central to serving local client needs better by joining up production, sales and fulfilment functions; key to class-leading customer service. Read any research paper on innovation and you will find collaboration is a critical component in sparking, fostering and sustaining new ideas.
The opposing forces of progression and regression create unique challenges and opportunities for multinationals. The answer is not to step backwards and divide up the business into localised units, it’s to increase the connectedness of the organisation.
This potential of creating internal and external synergies has not gone unnoticed over the past 5-10 years, but in an attempt to harness the benefits of collaboration, businesses have primarily relied on three, ‘push’ style strategies which have not consistently delivered:
Collaborative Enablers (e.g., slack, yammer, SharePoint, physical working environments)
Collaborative Culture (e.g., corporate values, leadership development, team building)
Collaborative Design (e.g., starfish, distributed or matrixed structures)
Whilst these approaches may be an important part of laying the infrastructure for collaboration, they fail because they are primarily top-down approaches (even OD approaches focused on flattening hierarchies are at least somewhat imposed). However, there is an unseen force that has a huge impact on an organisation’s ability to realise the potential of truly joined-up working - the hidden power of cross-functional, informal networks of teams.
The hidden influence of networked communities
The bedrock of collaboration in your business is the strength of your networked communities of talent. The informal relationships and connections that make up your organisation determine how work really gets done and how freely knowledge and expertise is actually shared. The emergent dynamics, flow and energy in your networks define the success of your adaptation, the speed of your responsiveness and the strength of your performance.
The best examples of such emergent processes can be found in nature. For example, the most complex organism we know of, the human brain, does not have a singular, central executive function but is a diverse, plastic, complex neurological network that is capable of predicting, learning, sensing and re-learning in response to a vast range of environmental conditions. Toward the other end of the scale of complexity, small insects such as ants live in amazingly advanced colonies with self-organised refuge disposal, food gathering and even cemeteries; all without a governing hierarchy. These are powerful examples of network collaboration for adaptation and survival.
Whilst social emergent theory has been in the mainstream since the early 2000’s it has been more commonly used to explain phenomena such the ‘Arab Spring’ or the rise of social media than it has been successfully applied to organisational change. There is now a unique opportunity to bring together research, technology and established practice to harness the potential of dispersed networks of talent to create sustainable value for the enterprise.
Emerging communities of talent
Many of the organisations that are globally acknowledged as being the strongest at internal collaboration have grown up as flat, digital, highly networked organisations, so it’s largely second nature to them. However, more complex, longer established organisations are still struggling to successfully shift from hierarchical to decentralised decision making, grappling with the speed and responsiveness to market changes, wrestling with innovation or finding their culture blocks their ability to establish deep customer relationships.
The good news is you don’t need to go and embark on a huge new initiative to get networks of teams, you already have them. Instead, executives and HR and OD functions need to understand how they work and how to help create the conditions that allow them to strengthen and perform.
Helping strong communities of talent to emerge requires insight, an empowering approach and a new set of skills. There are three main areas to focus on.
The first is to understand the nature of the multi-functional communities you have within the organisation and how strongly and deeply these are connected. The science of social network analytics can open new ways of mapping and understanding the inner workings of the organisation.
The second area is to understand what enables and prohibits the flow of information, expertise, relationship and energy across the community. Insights and social processes from psychology can unblock communication and increase trust and support throughout the network.
Thirdly, you need to help grow the communities’ ability to develop individual resilience, diversity, talent and expertise; the role of the entire, empowered network.
To develop the agility required to deal with the opportunities of progressive changes and the threat of market fragmentation, we must allow strong, vibrant, multi-functional communities to emerge that can adapt to changing conditions in the style of the human brain or an ant colony, creating flexibility and adaptation. To grow these communities, organisations must allow the intelligence, resourcefulness and energy of the network to strengthen and encourage diverse, interconnected communities of talent to take the lead in evolving the shape of the enterprise.