In today’s business landscape, disruption is the new normal. No industry is immune, be it manufacturers such as consumer goods companies or institutions in financial services. A survey by Accenture suggests nearly three-quarters of companies are either facing disruption or on the cusp of it. Yet, a distinct line separates those who navigate disruption successfully and those who falter. That line can be traced back to three pivotal factors: Purpose, Agile mindset, and Culture.
Driving transformation with Agile Mindset
The organizations that prosper amidst disruption are those that drive transformation by investing with purpose, adopting agile operating principles, and empowering their people at every level. Their reward? The long-term EBITDA growth for such agile organizations is an impressive 16 percent, compared to a modest 6 percent average for non-agile organizations.
A zero-based mindset – which involves re-evaluating all expenses to justify costs and drive efficiency – is instrumental in this transformation. Nearly half of the G2000 has adopted strategies based on this mindset, significantly increasing execution speed and investment capacity.
Beyond cost transformation: need to fuel growth
In response to disruption, businesses have been capitalizing on savings to reinvest in growth. Many management teams have unlocked a considerable portion of their P&L using a zero-based mindset, creating a vital source of investment capacity for operational agility. However, merely boosting the bottom line is only half the battle won.
Leaders must ensure these funds are allocated appropriately to spur growth. Critical consideration involves understanding why, how, where, and by whom work gets done to align with strategic imperatives. Failure to do so risks competitive setbacks and a hit to earnings.
Investing with purpose: attracting customers and talent
In an era where consumers and employees gravitate towards brands that resonate with their values, companies that invest with purpose are not just attracting customers and talent but are also fostering sustainable trust and connections. These factors subsequently lead to increased profitability and competitiveness.
Laying the agile mindset: breaking down silos
Agile structures that center around a purpose inspire employees, enabling teams to work more effectively, collaborate more intensively, and engage more broadly across their ecosystem. This agility creates the speed and flexibility necessary to navigate volatile industry economics, evolving customer expectations, and emerging business models.
Breaking down internal silos is a crucial first step. Establishing cross-functional teams that operate in flexible pod-like structures focused on specific imperatives can uncover and address problems in ways that traditional, restrictive structures cannot. This flexibility unleashes innovation and enables execution in sprints for improved outcomes.
The big thinkers: unlocking the ‘frozen middle’
A successful operating model depends on the people implementing it. Today’s C-suite is saturated with leaders possessing left-brain (scientific) skills focused on data analysis and critical reasoning. However, there exists a gap in empathy, change embracement, and vision clarity – attributes that foster courage, empowerment, and resilience to create market differentiation.
Unlocking the potential of the ‘frozen middle’ – typically two to three levels below the C-suite – is crucial. This group often embodies what the senior leadership lacks – ‘whole-brain thinking’ that propels innovation and unleashes creativity to tackle complex business problems and explore possibilities.
Preparing for takeoff: navigating disruption successfully
Overcoming disruption is not merely about survival – it’s about emerging as the strongest in the pack. Applying zero-based strategies to cost transformation puts companies on the right path, but thriving in disruption requires a clear purpose, right investments, an agile operating model, and an empowered workforce.
- Restructure and scale: Prioritize the eliminating rooted systems and structures that block your ability to scale and innovate seamlessly.
- Purpose-driven investment: Have a mechanism to transform with a purpose, enlarge innovation wings, and collaborations to gain wide access to technology and talent pool.
- Foster growth: Re-structure the culture across the organization and embrace creativity and relentless innovation. Balance the ecosystem with the people who are willingly like to push to new boundaries.
- Recognize innovations: Adjust incentive mechanisms for behaviors and results related to evolved structures and business models. And recognize the right behaviors.
Adopting these strategies and fostering an agile mindset can equip businesses to not only withstand disruption but also to leverage it as an opportunity for growth and increased competitiveness. It’s time to not just survive but to thrive in the era of constant disruption.
