Over the last few weeks, I have been talking with many people about the rapid changing environment that businesses face and how well prepared they are for the future. Unfortunately, throughout observations and coming out the discussions many of companies seem to be stuck in the past in the way they operate and they will struggle if they don’t start to act now.
Several established global businesses recently announced further overhead reduction. It’s most likely to lower their operational costs in order to protect their profit targets. Now let’s not be naïve, in the world of business profit needs to be made. But what actually struck me is the fact that businesses tend to look at people as costs, whereas they should be considered as the biggest added value within any organization. Consequently, if you treat people like a cost rather than an asset, how can any business expect their employees to be fully engaged, motivated and willing to go the extra mile & to challenge the status quo for the sake of the business?
I would like to make a distinction in between the established corporations that have been in existence for decades/centuries – and have survived many economical crises throughout their history – and the fairly new businesses that have grown exponentially over the last few years. Some of the most apparent differences are:
- Purpose & mission driven
An inspiring and clear purpose/mission creates clarity and ensures to attract the right employees who fully support & endorse the company’s mission. The younger organizations tend to be laser focused on this and do everything within their organization to continuously reiterate and strengthen it. They sort of evangelize the purpose and use it as their reason to be. The large established corporations on the other hand tend to have a rather broad mission statement and in general often lack a clear purpose. As a result they risk to become fairly average in terms of identity and to be pretty similar to other businesses. When an employee joins a firm because he/she believes in the company’s purpose, he or she will be fully engaged & committed to go the extra mile in order to bring the business closer to its purpose.
Culture is a big concept within any organization, but I’d like to highlight one specific element that makes a huge difference. It’s about how failure is perceived and treated. In a fast growing & more entrepreneurial driven businesses, failure is accepted as a part of success. It’s a way to learn fast (if you fail fast) and to grow. Ok granted, some failures can be catastrophic, so it’s about taking calculated risks. On the other hand, in companies where failure leads to blame, inertia is instigated and the business will struggle to progress and to adapt within the fast changing environment.
- Decision making
Established organizations tend to have a hierarchical decision making process which often stiffens decision making as it takes time to go through the process and employees are not necessarily encouraged or comfortable in taking decisions themselves. Within the younger organizations, the employees are encouraged to take decisions and are held accountable + feel encouraged to make it happen. This feeds the entrepreneurial mindset, which allows them to experiment and to constantly challenge the status quo in order to grow. Hence, it’s important to create an environment in which top-down as well as bottom-up decision making co-exist.
- People focused
When talking to people within the younger organizations, the employees feel that they can truly make a difference for the organization. These companies look at their employees as their most important asset for success and they will go the extra mile for their employees. This creates reciprocity. Besides the purpose, the focus on people enables them to attract the best talent in the market and to retain talent.
The pace of change will not tolerate slow businesses and will consume arrogant businesses that deem themselves untouchable. This will put a lot of pressure onto larger organization to become a lot more agile and adaptable. Looking at the banking industry for instance, a once untouchable industry, it is clear that new businesses (esp Fintech) are completely disrupting the industry business model and are threatening every possible revenue generator for banks. Consequently banks are forced to adapt and make some strategic choices to ensure their survival in the future.
In order to face the fast-paced change successfully, companies will need to shift the focus back to the people. Engage the employees by developing a clear purpose/mission, make them accountable and give them a culture & environment that supports decision making & encourages experimentation. It will not only increase their contributions, but it’ll boost their creativity and they’ll feel more empowered to make a real difference. The Dinosaurs have a chance to avoid extinction, but they have got work to do.
In the meantime, go and use your creative juices and increase your personal creative impact!
© Niels Chabot, Nutz & Creative