The pace of economic change continues to accelerate, driven by global competition, rapid developments in technology, and the shift in transaction power from seller to buyer. Businesses are perpetually disrupted by the need to respond faster in creating strategic value for customers, or suffer the consequences if they cannot do so quickly enough.
It’s an economy that demands agility and innovation to create value and sustainability.
Creating value is difficult work, much more challenging than extracting it from the business by downsizing, reorganizing, de-layering, re-engineering, etc. Creating value is the work of leaders. It’s expected that leaders will drive productive change, engaging and inspiring their people to invest the extra effort necessary to execute strategy, innovate and move faster, creating the required strategic value.
For decades, it’s been common managerial practice to improve results by standardizing products and processes, delivering increased operational efficiency and less risk. Sustaining performance is the responsibility of a management bureaucracy and a top-down command and control structure. Having established this operating model, the focus shifts to continually refining and pruning the operation to extract value from it, guided by readily available internal data. This proven methodology may produce short-term profitability, but it also produces mediocrity, and does not create value or cultivate sustainability.
Improving operational efficiency is still a vital, necessary objective, but it is no longer the priority. To create value in today’s economy, leaders get their cues by looking outward, gaining insight by collaborating with customers to accelerate progress and prosperity – just like they did when the business was new and seeking their first customers. And they keep asking questions like these?
- How can we accelerate decision-making to help our business move faster?
- How can our organization pursue innovation when all of its systems and procedures are dedicated to preserving the status quo and extracting gains from efficiency?
- How can we encourage creativity and collaboration when the current operating structure still involves managers telling workers what to do?
- How can we build trust and transparency when our vertical management structure inherently fosters bureaucracy and non-transparency?
- How can our business innovate with a dispirited, sometimes disruptive, workforce?
To prosper in today’s economy, companies rely on leaders who can mobilize their people to challenge what is possible, transform values into actions, and create strategic value for customers and the organization.