How to create Adaptive Organisations

The days of the traditional organisation designed for stability is numbered. In part because today’s operating models are outdated, three-quarters of today’s companies are expected to be replaced within 10 years (Anthony, Viguerie, Schwarts, & Landeghem, 2018). It is being replaced by organisations designed for both stability and dynamism with networks of teams and people-centred cultures guided by common purposes and co-created value for all stakeholders. 

According to Hemsley Fraser, adaptive organizations differ from traditional bureaucratic companies. Roles are more fluidly defined; the overall strategy may be defined but the tactics for achieving it remain loose and flexible; decisions are made more quickly because employees are more empowered; the culture is less about judging people and more about encouraging them to be curious; new customer needs and requirements are more likely to be anticipated; agile companies are less afraid to take risks because failing is acceptable; people and teams bounce back faster from setbacks and multiple solution options can be developed to resolve any problems.

Adaptive organisations use continuous strategic and financial planning. There is a two speed approach to organisational priorities. Leaders define direction, establish guardrails and cultivate capability.

Adaptive leaders ensure alignment around purpose, strategy, and priorities. Leaders need to communicate what they want and why, and then empower their teams to figure out how to achieve it. The greater the alignment that leaders create, the more autonomy they can grant. (BCG).

HR will have also to adapt how work is organised – what should be stable and what should be dynamic, how capability is developed and leveraged, how the organisation is led, how design thinking, insights and data are utilised and how the organisation responds to ongoing change. All these changes will need increased transparency, cross-functional work and shared responsibilities, changing jobs, skills, rewards and careers fundamentally.

Flexibility and fluidity need to be organisation design principles. Work gets delivered through self-organising teams and in cross-boundary networks and eco-systems and new models are used for managing and deploying talent. Processes have rapid check and learn cycles and decisions are data-informed.

In operational terms, the concept of agility can be defined as employees’ capacity to gather and disseminate information about changes in the environment, and respond to that information quickly and expediently. From a strategic perspective, this combination of speed and data-driven innovation is increasingly important for many businesses to maintain a competitive advantage.

And all this pays off in employee engagement and performance. The importance of a company’s ability to respond quickly to business needs is reflected in a clear relationship between these perceptions and employees’ optimism regarding their organisation’s overall performance. Employees who view their company as “agile” are significantly more likely than those who do not to have confidence in its financial future, and to feel it is ahead of the competition.