Don’t wait for the next economic downturn to built organizational agility!January 30th, 2020
Organizational agility is a company’s ability to sense and respond to the environment and to rapidly reallocate resources, build new capabilities, and jettison the assets and activities that no longer create value. Agility allows an organization to adapt, over and over again, in meaningful ways that support above-average performance over long periods of time. Agility is the relentless pursuit of competitive advantage.
According to PWC’s 23rd Annual Global CEO Survey, respondents revealed a record level of pessimism around global GDP growth. While they believe a global recession is unlikely, they report that they do not expect to see much in the way of revenue growth in 2020. According to PWC, this data is important because this survey has proven to be a reliable predictor of both the direction and level of global GDP growth in the year ahead.
So, does that mean we should start putting together our downsizing lists and cutting all of our people-related programs to rein-in cash? No! Rather than using uncertainty to take defensive actions, an agile organization proactively makes changes to remain competitive during both good times and bad.
As we move through our Fourth Industrial Revolution, and the digitization of our organizations, the supply of people in possession of the necessary skills cannot keep up with demand. In addition to new technical and digital skills, there is an increased need for soft skills — like collaboration, communication, fostering innovation, and managing complexity.
A company doesn’t have much control over the broad demographic trends that make it difficult to attract and retain talent. But they can take action in upskilling their people now — as the strategy of swapping the limited, skilled labor pool from company to company is unsustainable. So, you might say, “If we spend money upskilling our employees they will leave!” Well, what if you don’t and they stay? Those companies that have made the greatest progress in upskilling are reporting better business outcomes that include: higher workforce productivity, improved talent acquisition and retention, greater innovation, and reduced skills gaps and mismatches. What company wouldn’t want those results?
At the core of this is our need to re-evaluate the assumptions we have made about how to conduct business for years. This new game, needs a fresh look at the science behind building an effective organization — and the time to adopt them is now before the next wave of significant disruption crashes on our shore and we jump from offense to defense.