Some organizations have broken the code--they have learned how to thrive in chaotic environments. Rather than getting caught up in the swirl of fast-changing markets, technology, and business conditions, they are able to step back to see the patterns and the symmetries that underlie this seeming disarray, and they are able to capitalize on them. Here are nine things you can do now to ensure your business will thrive in even the most chaotic environments.
1. Adopt fluid and situational hierarchies
By their very nature, chaotic environments are extremely complex and volatile. Fluid, situational hierarchies can quickly adapt to fast-changing environments, morphing to fit tomorrow's needs instead of forcing organizations to constantly play catch-up with structures designed to meet the needs of yesterday. At Egon Zehnder, one of the largest executive search firms in the world, with annual billings of more than $300 million, the rigid hierarchy typical of a large, international firm has been supplanted by a fluid organization that emphasizes high levels of cooperation, communication, and teamwork, resulting in productivity that is 60 percent higher than the industry average.
2. Value and foster communication skills throughout the organization
Communication is the lifeblood of any organization, but fast-moving organizations operating in chaotic environments face especially daunting communications challenges. When channels of communication are open and unfettered throughout an organization, information can travel quickly across operational boundaries and from frontline employees to management (and back again) quickly and with minimal filtering. According to Alfred C. DeCrane Jr., former chairman and CEO of Texaco, "With the utmost clarity, leaders convey...an understanding that communication is a two-way process in which leaders listen, hunger for feedback and new ideas, and are driven by a need to compel and to influence, not to command and control."
3. Operate with a high degree of internal transparency
Opaque organizations function very poorly in chaotic environments. It is particularly difficult to be responsive to sudden change and radical unpredictability when employees see only walls between themselves and their colleagues, and between themselves and customers. Organizations that make a point of removing barriers and encouraging a high degree of internal transparency are better able to respond to fast-changing business conditions, because employees are able to easily "see" where to find the support they need from their colleagues, and where to best find the resources they need to achieve their goals.
4. Solve problems by "letting a thousand flowers bloom"
Smart leaders empower people throughout their organizations to invent and set in motion many individual solutions designed to meet core organizational objectives, letting the chaotic environment determine the winners through the process of natural selection. They monitor them very carefully, have rigorous criteria to evaluate them, and kill off the failures fast--while making it clear they're killing off the failures and not the people who failed. In his book Thriving on Chaos, Tom Peters promotes the idea of using "fast failures" to increase the speed of innovation and dramatically accelerate product development cycles. But, cautions Peters, "To support speedy failure is not to support (or tolerate) sloppiness. It is imperative to demand (1) that something be learned from each failure, and (2) that it be quickly followed with a new modification."
5. Value and make use of improvisation
Just as musicians open up the gates to their personal creativity when they improvise rather than follow the strict parameters of a written musical score, so too can employees open up the gates to their personal creativity--and strengthen their capacity to think on their feet--by improvising as they solve problems and seek solutions. Says innovation thought leader John Kao, "Improvisation is probably one of the two or three cardinal skills for businesses to learn in the future, and the process of improvisation must underlie how organizations formulate strategy going forward."
6. Focus organizational learning on judgment, creativity, and scenarios
Organizational learning can be static or dynamic. Though static organizational learning can be instructive, only dynamic organizational learning can enable an organization to effectively meet the demands and challenges of chaotic business environments. When businesses foster judgment, creativity, and scenarios--"what might be knowledge"--they become dynamic organizations that are better able to prosper in fast-changing market conditions.
7. Define your company by its mission
As management expert Frances Hesselbein has said, "Mission is the star we steer by. Everything begins with mission, everything flows from mission." Businesses that define themselves by their missions know exactly what their goals are and how they will achieve them. Now, more than ever, they are able to see their paths clearly through the fog of chaos and act accordingly.
8. Invest heavily in knowledge workers
Knowledge workers are people who create, transform, or repackage information as a key part of their jobs. As such, these workers are directly plugged into the latest company and market trends as they occur, and they are therefore better able to respond to changes in the environment. Knowledge workers build intellectual capital for the organization; they are both motivated and able to rapidly adapt to environmental and systemic shifts. According to management guru Peter Drucker, "The most valuable assets of a 20th-century company were its production equipment. The most valuable asset of a 21st-century institution, whether business or nonbusiness, will be its knowledge workers and their productivity."
9. Empower people doing work--especially entrepreneurs and innovators
When organizations give employees both the responsibility and the authority to take initiative in their jobs, they can unleash a torrent of innovative ideas and energy that can make an organization more responsive to customer needs in any business environment, whether chaotic or not. The original IBM personal computer, or PC, was developed by a team of 12 employees who were given carte blanche to develop this revolutionary new product as quickly as possible, including express authority to ignore standard company policies when necessary to get the job done.
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