The Firm of the Future Just IS Agile
“What does the Firm of the Future look like?”
It’s a question people keep asking. Sometimes we ask it from a sustainability perspective. How can we interact with the environment in such a way as to cause minimal adverse effect, and equally to ensure that the business can evolve as it needs - sustainable use of resources but equally sustainable growth and evolution. Sometimes we ask it from a tech perspective, and surely there the answer is, in part, obvious - The Firm of the Future is Digital, embracing Cloud, mobility and social, in effect exploiting the ubiquitous connectivity of the web. And sometimes we ask it from a people perspective, what are the ties between employer and workforce, employer and individual, in this new future into which we head.
To look forward, it’s worth looking back. Whilst you may have an immediate answer to the oldest profession, I suspect that you won’t so quickly know the oldest ongoing business, where it is and in which industry it operates. Look it up (http://en.wikipedia.org/wiki/List_of_oldest_companies). It was founded in 578ad, it’s in Japan, and it’s in Construction. Indeed the oldest six are all Japanese, as are nearly 60% of the worlds businesses over 200 years old. There is clearly something about Japan that promotes sustainable business longevity.
Whilst one could debate how some of the traditional values and formality of Japanese business culture may need to evolve as we target that Global Firm of the Future, two underlying themes are vitally important. First and foremost is the obsession on customer service.
In this new world, customer service is driven by immediacy of need and measured by transparency and recommendation. In short, we want it now and we will know whether we are likely to get it now, because we know the reputation of both the organisation providing that product, service or experience and the individuals who are involved in delivering it.
The second is the business value placed on the trusted (business) network. What we do, what we think, what we buy is increasingly influenced by not only our friends but our wider known and unknown social network.
Amongst all other things, we can perhaps conclude that the Firm of the Future succeeds because it can meet that immediacy of customer need, through continued delivery of service excellence but above all else, in a way that is known (transparency) to be acting with absolute integrity as recently illustrated by the public interest in alleged tax avoidance by global corporate businesses.
The question is then how organisations can evolve to meet that need. It is interesting to note that of those companies with more than 100 years of history, “89.4% are businesses employing fewer than 300 people.” This provides some supporting evidence to a hypothesis that says it is harder for larger organisations to achieve immediacy. Indeed quite the opposite, large global corporate have on the whole achieved their position through centralised decision making, clarity of hierarchy and rigour of process, driven through continuous process improvement. And in the 20th Century, this is what succeeded. As we head further into the 21st, I would suggest that it is less likely to achieve success for the Firm of the Future.
Juggernauts, tankers, supernovae – all of these take some hefty shifting. And so does big business. This is not a simple change. Google, Facebook, salesforce – the new breed of “born in the web” organisations are today more agile (than the typical legacy business), though even these organisations struggle to maintain the obsessive focus on customer service with positive transparency. What they can do more effectively is to break the rules to maintain competitive edge in this evolving market.
In the UK televised Brian Cox lecture of the 3rd February 2013, he described the atomic structure of diamond – tightly packed carbon atoms in a rigid structure (as an aside, which is 99.9999999999999% empty space). It is, and always will be diamond, and it is those organisations that maintain a similarly rigid structure that will find it hardest to evolve to the Firm of the Future. The Firm of the Future needs a different molecular structure, one that supports a more agile, a more fluid structure that allows more elasticity. And yet it is difficult to believe that a wholesale transformation of a rigid centralised structure to decentralised chaos is the right answer. The hybrid structure surely provides the immediate catalyst to drive more agility – to begin to shape the Firm of the Future that just IS Agile.
We have lived through 20-30 years of M&A whereby the buying organisation integrates the acquisition into their structure and (sweeping generalisation) largely destroys the one thing that made that company successful – agility. Maybe today, we need to find a mechanism that allows larger organisations to give those acquisitions their own space to continue to thrive. Which of the existing capabilities or functions within the business should equally be spun out and given room to breathe and, which should continue to form part of that highly efficient core sets of capability that allow the discrete (and smaller than we’ve seen to date) business units to succeed. Furthermore, how would you determine which should be set up anew to meet emerging demand.
What is clear is that the behaviours of these new units must be driven by what they themselves need, which in turn creates the requirements of the core. It cannot be the other way round. Financial measurement must be agile. Performance must be agile. Innovation must happen. Culture must change.
It is the emergent business network that holds these loosely coupled business units together. It is the strength of community both within the agile units and across the enabling core. It is a desire to create something new, to evolve as the world accelerates around us, to connect each and everyone to a product, service or experience that improves our customers’ lives, to survive and thrive, that presses us on.
As we strive to describe the Firm of the Future, to bring to life the goal of “Just IS Agile”, I wonder where else we can look to for guidance beyond the longevity of business in Japan, the world of particle physics and gravitational links and the ubiquitous connectivity of everything.