The Secret of Adaptable Organizations Is Trust

In the last year, many companies have been pushed to the limits of their capabilities, and in many cases, to the edge of insolvency. With severe pressure on operations, supply chains, and demand, their processes have collapsed, and any idea of teamwork within their ranks has been thrown to the wind.

However, contrary to all expectations, many CEOs say that their organizations actually appear to work best in crisis mode. With the company in a sink-or-swim situation, the employees pull together and develop the ability to surf.

Of course, working in crisis mode is neither sustainable nor desirable. Many business leaders are now asking themselves how they can keep up the momentum post-crisis and ensure that their organizations are adaptable in the future.

The key lies in achieving a permanent state of adaptability. Every business leader knows that their company needs to adapt to survive long term. However, the real issue is not successfully transforming your organization on a one-time basis — it’s writing the ability to adapt and transform into the company’s DNA. It’s developing a mechanism or reflex for dealing with whatever crisis comes along, be it financial, technological, environmental, or health related.

The pandemic has shown a sharp spotlight on the need for companies to be adaptable, but even before 2020, they had to deal with multiple crises. Indeed, most business leaders feel like they’ve been in a state of constant “transformation” for the past two decades, and many are heartily sick of the word.

The problem is, despite the energy that business leaders put into their work, most attempts to make companies adaptable come to nothing. Gradually, the transformation lost momentum.

What was wrong with the old approach? Business leaders were trying to do too much. They were expending a lot of energy but channeling it in the wrong direction. And, commonly, complex problems do not require complex solutions. When it comes to being adaptable, the answers are actually surprisingly simple.

The “Less Is More” Approach

This technique differs radically from the old way of doing things. Traditional organizations were designed for stable market environments and often come with a heavy legacy of complex administrative processes. That makes them notoriously inflexible and difficult to transform. The default approach is to impose more rules and tighter controls from above.

The problem is, tightening controls often stifles the organization. In fact, what management should do is loosen their hold and give the organization the freedom it needs to work effectively. The idea is that management should stick to defining what they want to achieve and let the organization focus on how to achieve it. This process of loosening your grip — while not letting the company descend into chaos — can be tricky. It needs to be based on a clear set of principles, backed up by science.

This approach is inspired by complexity theory, where one of the key concepts is “emergence”: the idea that complexity arises from simplicity and that small things form big things with properties different than the sum of their parts when interacting as part of a greater whole. Just a few simple principles allow you to build systems where macrointelligence and adaptability derive from local interactions and knowledge. In other words, the challenges may be great, but the solutions are often small.

Many examples of this occur in nature. For instance, ants build living bridges when searching for food, construct megacity-like colonies, and protect themselves against threats collectively. If the colony is flooded, for example, some of the ants use their heads to plug holes, while others absorb water with their bodies to drain the floodwater.

Adaptability Design Principles

Leaders can draw inspiration from these design principles, that translates the concept of emergence into the language of business:

• Address purpose. Define the purpose of the transformation, specify goals, priorities, rules, and boundaries. Steer changes in advance as much as possible. Back this up by providing continuous feedback on whether individual actions are contributing to the common goal.
• Nominate owners. Choose “pilots” and “co-pilots” who take end-to-end ownership of their topics. Make teams flexible, diverse, and cross-functional in order to avoid organizational silos.
• Test, don’t guess. Run real experiments rather than relying on so-called expert opinions. Use the results of these experiments as the basis for designing measurable solutions.
• Spark collisions. Enable direct interactions, both planned and random, between individuals within the organization. Encourage people to exchange ideas and experiences. Dynamic networking is a great basis for decision-making and achieving a common purpose.

Following these principles can help business leaders build an organization that is able to learn from the bottom up, using local knowledge and expertise.

The Role of Business Leaders in an Adaptable Organization

In traditional organizations, the person at the top focuses on making operational decisions, especially the big ones. In adaptable organizations, the leader focuses on facilitating the right environment. They need to trust their teams, gradually loose their grip on the reins in a controlled fashion, to be rewarded with powerful, innovative solutions that will emerge from the organization itself.

How can you know if you’re currently doing too much, getting overly involved in the nitty-gritty of operations? Count the number of decisions you make in the course of a day. If you’re constantly making decisions, chances are you’re not giving your company the freedom it needs to self-organize. If this is you, the single most effective task you can perform is to reduce the number of decisions you need to make every day.

The results of doing less, not more, might just take you by surprise.

Adapted from “The Secret of Adaptable Organizations Is Trust”, by Joerg Esser, 15 March 2021, in Harvard Business Review

https://hbr.org/2021/03/the-secret-of-adaptable-organizations-is-trust?ab=hero-subleft-3