Building Dynamic Capacity - To Thrive in the 4th Industrial Revolution Professor Stephen Wyatt
The Dynamic Capacity of an organization is its ability to sense how the market-spaces are evolving as the unknown future unfolds, to make and act on timely decisions about to compete in that future whilst also being flexible to adapt quickly to the reality that arrives.
Over a 5 year period (Dec 2014-Dec 2019), on average, the share-price of firms with higher than average Dynamic Capacity out-performed their own sector peers by more than 30% whilst those with lower than average Dynamic Capacity under-performed their peers by 15%. The measure of Dynamic Capacity is a leading indicator of firm performance, important for business leaders and investors to understand and manage.
The Dynamic Capacity of an organization is the product of the strength of 3 sets of capabilities; (a) to Sense & Make Sense, (b) to Seize & Replicate, (c) to Reposition & Reconfigure.
Working with over 80 organisations globally Prof. Stephen Wyatt has developed practical insights on the management practices and leadership traits that can be adopted and developed to increase Dynamic Capacity. His work has been endorsed by business leaders and leading academics.
In 4IR (as with every industrial revolution) there is a very significant dislocation of labour and skills, both what we do and how we do it. The response to the CoVid-19 pandemic has coincided with the availability of effective (if not yet perfect!) communication and collaboration platforms. These platforms are enabling millions to work remotely and flexibly. Flexible working arrangements can help to mitigate the epidemic of stress (WHO, 2015) enabling individuals to juggle multiple commitments (e.g. young children or aging parents) as well as attend to their own well-being. Flexible working can enable individuals to maintain more than one source of income, which can help to mitigate anxiety induced from income insecurity (that might be caused by arrangements such as zero hour contracts). Remote working can save commuting time, helping employees to be more efficient; reducing environmental impact from transportation pollution and saving out-of-pocket costs. One of the three axioms for businesses to win in 4IR is to 'win the race for 4IR talent' - a key tenet of winning that race is to proactively fulfil the 'Duty of Care' to workers (whatever their contractual arrangements). Supporting flexible and remote working, thereby helping to mitigate the epidemic of stress and also to be more inclusive of workers irrespective of their personal circumstances - is one element by which employers can fulfil their duty of care. This video from the Economist speaks to the impact and possibilities for remote, flexible working demonstrated by the reaction to the CoVid-19 pandemic.
Responding to the CoVid pandemic has relied on often under-used management & leadership capabilities; will we continue to ‘flex these new-found muscles’ in the future?
Organisations have responded in vastly different ways to the pandemic, just as individuals have also adopted vastly different reactions and behaviours. Not all have ‘leaned-in’ but those that did, have demonstrated capabilities and mindsets that are crucial not only to combating the CoVid pandemic but also to being able to thrive in 4th Industrial Revolution.
Seize the Initiative and Pivot: Some organisations jumped quickly to address new needs, of existing customers or in the wider society. For example, some automotive and household appliance companies started to design and produce Ventilators and PPE. Other companies redeployed their drivers and vehicles to support food and shopping deliveries. Such changes required repurposing and acquiring new equipment, adopting new capabilities and behaviours and adjusting the supply chains. The new activities had to be supported by rapidly realigned governance procedures, of quality, health & safety, as well as financial performance. Success required them to move people rapidly and smoothly between activities, unconstrained by organisational silos and the practices, processes, policies and perceptions that often create resistance to change. A strong sense of a common purpose enabled cross-boundary collaborations to be formed rapidly, not only within organisations, but also between companies and in public-private collaborations. Beyond cooperation to address the issue at hand, these partnerships have demonstrated an unprecedented ability to look ahead, to be simultaneously (ambidextrously) resolving the immediate challenges whilst also preparing the way for accelerated progress in future stages. For example, in the race to create a vaccine there has been tremendous collaboration between big-pharma and university research departments whilst also coordination and preparation for the anticipated large-scale manufacture thereof. Additionally, representatives have spoken about their preparation for the envisaged eventual distribution of the vaccine.
Rapid Replication & Scale-Up: For example, the roll-out of multiple testing laboratories, the establishment of pop-up hospitals, the rapid scale-up of teams working in front-line roles and also of development teams working on digital applications (e.g. video conferencing). Speed at scaling up has required the ability to focus on the essential core elements without carrying forward the complexity of the ‘whole’; focus, simplification and streamlining being cardinal. To move at speed there has been increased reliance on creating fluid teams, empowered with the decision rights to take action and access to resources. This, together with the strong sense of purpose/mission has engendered a high sense of personal accountability and collective responsibility. In many countries, healthcare services were scaled rapidly, which necessitated a call to former employees, doctors and nurses to return to work as well as the rapid recruitment of support staff. Rapidly scaling up the workforce increased overall diversity, talent coming from different communities and demographies. Integrating these people whilst also seeking to support the core staff to manage their workload and stress load, required the widespread adoption of flexible work practices; accommodating personal circumstances. This has resulted in heightened recognition of the potential vibrancy of a 5G (5 generations) workforce and the benefits of flexible working practices that support workforce diversity.
The THREE axioms of to thrive in the 4th Industrial Revolution are (1) Build the capacity to act dynamically, (2) Drive audacious growth – that is purpose-led, (3) Win the race for 4IR talent. Those organisations and individuals that have chosen to ‘lean in’, to positively respond, to the CoVid pandemic have been able to hone the management & leadership capabilities that enable them to out-compete others in 4IR. The question is – will it stick, will they continue to flex these leadership muscles, or will they fall back into old habits?
The 'War for talent' is over! Nobody won. The 3rd Axiom of winning in the 4th Industrial Revolution is 'Winning the Race for 4IR talent'. 4IR is causing a significant dislocation in talent, new skills are required, both technical (to manage the cyber-human interface) and managerial (to manage and lead at speed, in uncertainty and ambiguity, to move with purpose anchored-agility). To win the race for 4IR talent requires prowess at (1) Developing executive talent, at pace, in-the-flow of business (2) Deploying talent fluidly; forming, modifying and disbanding teams, adopting an organisational model of a 'team of teams' (3) Protecting the well-being of workers, the physical and mental well-being of workers, whether employees or contractors. Fulfilling the duty-of-care supports employee engagement, productivity and builds the employers reputation.
The 4th Industrial Revolution is already here. The firms and organisations leading the way, "surfing the wave of 4IR", gain disproportionately high returns. In this video I provide a quick overview of the four industrial revolutions; highlighting why 'Industrial Revolutions' are so important. Much more than just technology adoption, they represent periods of profound reshaping of societies, the distribution of wealth and our relationship with the environment. It's critical that we embrace the 4th industrial revolution in order to achieve outcomes for society and the environment that are sustainable.
In this video I provide insight on the formula for success in the 4IR. An overview of the capabilities and management practices that enable organisations to 'thrive, not just survive' in 4IR: Embracing the imperative for corporate rebirth. I hope it stimulates your thinking about the practices of your own organisation and structures discussion with your colleagues that leads to you identifying ways to strengthen your 4IR capabilities and performance. 4IR is already here: Are you leading or following?
Many of the frames of reference that have previously defined the choices and guided decisions of corporate managers and leaders have been reset in the 4th Industrial Revolution. In this video I give an overview of how and why these frames have changed and therefore why Management & Leadership in 4IR is different, an evolution from previous models and mindsets; 'what got us here, won't take us there'.
The 2nd Axiom of organisations that out-perform in 4th Industrial Revolution is their ability to drive growth, in good times and bad! Growth is a key part of their pursuit of PURPOSE. If the desire to achieve purposeful impact is strong, then they are hungry to grow, as the ability of the firm to make a difference increases as it grows. Rapid growth requires overcoming internal conflicts and external challenges, which requires that the managers, collectively and individually, seek to 'win together'. To think ambidextrously, simultaneously pursuing seemingly conflicting goals, delivering the required results today whilst preparing for better performance tomorrow. The organisation must also be energised by constant evolution, embracing the adoption of suitable new technologies, operational and managerial approaches; momentum building momentum. There must be an expectation for change, a mindset to 'never-settle' and an explicit doctrine for living in change that is an important part of the distinctive culture of the organisation.
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