The Modern Day Leadership Challenge (The New Ways of Work - Part 2)
This is the Second in a series about the new ways of work. In Part 1 we discussed the challenge companies face when revenue slows due to changes in the market, leadership, and other factors. This article discusses a significant leadership challenge for renewing and accelerating growth in a fast changing environment.
Where we left off last time, the invisible hand of change had taken hold of the company. Change seemed to come on slowly then quickly (as described in this research paper from CB Insights). The senior team's focus increased on tightening up the existing operations to free up dollars for investment in new products, services, and markets. The CEO and senior team had discussed in the past the importance of innovating with new products and services, but now it became THE top priority...Only figuring out where to start, how to organize, and what to invest in without wasting significant money and distracting the majority of the existing organization, was not clear.
To put it another way, the modern day leadership challenge this team faced was to deliver results today from the existing business, AND identify new growth opportunities for the future, AND to create the organizational capabilities to do both.
The Modern Day Leadership Challenge
Clearly this is not a unique challenge, but is something all companies must learn to do well in a rapidly changing business environment. With that said, companies often put too little emphasis on future growth opportunities while ringing every last ounce of profit from the existing business. The result is a business that becomes less and less prepared to innovate and less agile to cope with change.
To solve this significant leadership challenge is not easy, and requires mastering five core competencies which are outlined below. In future articles we will discuss each of these five competencies in more detail, however, here is an overview the challenge each competency must overcome to renew growth and company culture.
1. Agile Growth Strategy - Many companies haven't had the need to focus on growing customers outside of their core before, however, this is changing rapidly. Identifying adjacent customers and markets, and determining how to scale up the organization quickly to take advantage of those opportunities is critical. Five-year strategic plans are no longer practical. They were often put on the shelf anyway, and took too much time and effort to create. Then they were quickly out of date as markets changed. An agile strategic planning methodology has become a necessity, and will be discuss in our next article.
2. Agile Organization/Culture - Typically new strategies require structural changes to the organization, compensation adjustments to support the company's strategies, new capabilities and talent in the senior ranks, and a growth mindset and culture throughout the company. Changing the organization and culture isn't a one time event, but ideally leads to an organization that is flexible to re-organize as necessary to capitalize on key initiatives. That agility doesn't just happen. There is a methodology to create an agile culture. This is the subject of a future article.
3. Innovate/Scale/Renew - Mastering innovation that matters and moves the financial dial for an organization is difficult. Often innovation is attempted on way too small a scale, and the result is that it is treated like a foreign body that the established organization eradicates. In truth, companies today need everyone innovating at all levels to improve the existing operations and to seize new growth opportunities. Innovation, however, does not come from osmosis. It is not about having an outpost in Silicon Valley, partnering with a top VC firm, or building a corporate incubator. It is also not the number of new innovations that counts, but about supporting a plan for strategic growth. Innovation must start with strategy first, then it must be scaled large enough to significantly impact the financials of the organization. There is an innovate/scale/renew cycle that when deployed leads to consistent new innovation, which we will detail in a future article.
4. Measurable Strategy Implementation - Companies are used to managing execution through financial measures, project plans, and KPIs (Key Performance Indicators). These are critical elements of managing an organization, however, there is an AND here as well. In addition to tracking these often lagging measures, there is a goal-setting movement that is gaining steam called OKRs (Objectives & Key Results). If project plans are the "how", OKRs are the "what and why". Andy Grove of Intel identified that fewer strategic priorities with measurable milestones can lead to maximal learning and better execution on strategies. This in turn leads to better long-term financial results. We will discuss OKRs in a future article as well.
5. Tech-Enablement - To survive and thrive in this new economy all leader need to tech-enable their companies. This means different things to different people, but assume that technology can improve data for decision-making in all departments, can improve customer acquisition, support and experience, can facilitate collaboration within your company and between your company, customers, and partners, can automate tasks throughout the operations of the company, and can improve your products and services. The challenge is how to tech enable your company, and where to start, which is the subject of another future article.
R. Joe Ottinger is the Founder of the Iinnovate Leadership Network, a consulting firm that helps companies implement strategic change to achieve top and bottom line growth in today's rapidly changing innovation economy. Joe has been a technology entrepreneur, management consultant, and author in the areas of leadership, entrepreneurship, and innovation. He cares deeply about transforming companies, communities, and lives through innovation.