We’re already far into the digital revolution, the biggest change since the industrial revolution in the 1800s. All parts of society are and will be affected by new technology, big data, IoT, artificial intelligence, 5G, quantum computing and more. We will be approached by businesses and authorities in ways we’ve never seen, or even imagined. Processes we know today as complex, slow, time-consuming and incomprehensible, will become simplified, transparent, involving – even fun and educational. We will be served by efficient machines and advised by caring and passionate humans who love their jobs and who are obsessed by you – their customer. Most of them will know what you need before you know it yourself, and they will not sell in traditional ways, but involve you in understanding and crafting the perfect solution, designed specifically for your needs.

The passionate employees and their authentic leaders

These passionate employees will know that the machines and the robots are awesome tools who will help them do all the dirty work they’ve never really cared for anyway. They will bring on major workload for the machines to hack, so that the employees themselves, get to do the fun work of breaking it all down, making it understandable and relevant for their peers, their leaders, developers – and most importantly – their customers. They will be so excited to bring the newfound information and solutions to the market, test it on their customers, get instant feedback which they will in turn feed back to the machines, robots, peers, developers, and leaders, so that the entire eco-system at a workplace, will continually improve and create even better solutions.

The passionate and engaged employees are motivated by authentic leaders. Leaders who understand that their most valuable resource is their human workforce. The people. These leaders have realized that everything has to start with the people. The employees need to get the newfound information first, and they must be in charge of their own mandates. All employees will in short time – if not already – be working as Marketing Managers, in control of their products, markets, customers and framework conditions. They will be prospering and thriving in a network of dynamic and empowered teams, where roles are clear and structure is flat. Each team is a robust community and processes are rapid and educational due to action-oriented decision making, authenticity, and radical transparency. (This is further reflected and backed up in for example McKinsey’s report on “5 Trademarks of Agile Organizations”)

Trust and team-efficiency

Within the field of research, trust is regarded as a dimension closely related to team-efficacy. This may become evident through how companies make strategic choices, structure their organizations with regard to i.e. employer involvement, collaborating within the organization and formal, bureaucratic routines. Huang and Murninghan stated that trust is an essential part of human collaboration, and my own research for a master thesis in 2015 proved that the level of trust within a team has strong impact on the team-efficiency. Broad research has found three drivers for building trust: Ability, Benevolence and Integrity. In a workplace these three drivers could affect or determine the company-culture for instance like this:

• Ability – how employees regard their CEO’s abilities
• Benevolence – how employees expect their CEO to safeguard their employees’, customers’ and/or society’s interests
• Integrity – how the CEO walks the talk when it comes to company- as well as his or her own values and principles

With Edelman’s Trust Barometer in mind, 2019 could possibly be the best timing ever for establishing and building trust within the organization. Building trust by involving and empowering the entire organization ensures that efficiency and productivity will improve, as well as employee- and customer satisfaction and engagement.

It all comes down to the company-culture

Building trust is hard work and closely related to the company culture, often defined by the company’s mission and values. Most companies have defined their Mission and values based on an industrial mindset, possibly looking like this: we have (or acquire) the necessary technology (1) to come up with a product (2) that solves (3) our customers’ needs (4).
The digital mindset looks like this: we need to know our customers’ needs (1) so that we can solve (2) their problems by creating a product (3) which needs to be continually improved by implementing and using the best technology (4).

Customers today expect to be treated individually and not as a mass, this can only become possible through involving and engaging the entire workforce, each and every one. Igniting and engaging all employees should start by involving them in defining a new Mission and new values supporting the new era. This process can also be seen as an opportunity to connect employees’ own values with the company values and mission – the Big idea – as referred to in the Trust Barometer.

The company culture starts with the CEO. A company will never be able to build trust and loyalty if the CEO is regarded as not trustworthy. This is why I believe it has never been a better environment or time for building trust. The Trust Barometer 2019 states that people are looking for trust. They are likely to find it in their workplace when CEOs put Culture and Trust on top of the company’s agenda in 2019.

Both privately and professionally, we possess more square meters with fewer people per dwelling and own more stuff that we choose from an almost exponentially growing number of products and services. People will even cut back on necessities to preserve luxury. We are truly shaped by habits and expectations, which we mirror from other people and organizations thus making the digitally created abundance harder to handle than the industrial scarcity of the 20th century.

If we can’t regulate consumption in our private lives, how are we supposed to do it professionally with almost everything readily available?

This tendency of believing in big is linked to the human and organizational bias of overestimating the value of big things. Throughout history, trusting big things and consolidating families, cities and organizations made sense when we faced famine, wars, and natural catastrophes. Today, large organizations are trying to cope with globalization and digitalization by pouring what seems to be disproportionate amounts of resources into fewer large innovation projects. What is meant as an attempt to de-risk concept development and product launches have the exact opposite effect, thus making many large organizations behave like giant forks in a world of soup.

Unfortunately, organizations approach innovation and digitalization like they are drinking from a fire hose – they think getting a lot fast is the way. Fast is good, everything fast is not.

Clearly, R&D spending depends on industry and lifecycle stage of the organizations but it does not correlate with innovation and business performance. Today, lead times are longer, complexity is higher and resources are more concentrated than ever so new design principles are needed.

At Sputnik5 we believe in SMALL to be a core design principle as the smart inbuilt organizational mechanism for getting the right things done fast in innovation. By small, we mean that large organizations should:

• provide dynamic access to and increase the granularity of resources, i.e. smaller chunks of money, time and (a broader set of) data/tools for more employees
• distribute decision making to small and agile teams to avoid organizational drag
• spend as much time in the before and after phases of an innovation project as during to make sure that the right problem is solved and there are a place and resources for the output in the roadmap (and a contingency plan)
• maintain a prioritized backlog of small problems, possibilities, and processes

Strategically staying small does not mean resizing the overall company and not leveraging corporate resources but it does mean creating a more ambidextrous set up where at least 10% of all projects are a small but high risk and the rest are low risk. An often-copied strategy is long-term planning for the future but that often leads to option-blindness in a wild chase for minimizing risk.

Small is good. Not enough is just right. Think about how you can get as much as possible from as little as possible when doing your next project or designing innovation activities. The next big thing in innovation is a lot of small things.

Here is an answer to a similar question stated in Gallup’s State of the American Workplace 2017: “Because the changes that are affecting organizations today are coming fast and furious. They are overlapping and colliding in ways they haven’t before. They are historic and monumental.”

Are you still contemplating whether your business needs to change? Here are 3 clear signs it does. If you are familiar with any of the 3 topics below, you need to get on with it – now.

1. You think your company’s first priority is to create value for your shareholders

Well, obviously that is important. But are you sure it’s your first priority?

If I told you, you’ll be out of business in a short time if you haven’t made sure you have the best employees there is in your line of business. Would you believe me? Well, it doesn’t really matter, because it is a fact. (This is backed up in extensive and various modern research, check out, for instance, McKinsey’s study on five trademarks on agile organizations). You might think you need new employees? Or could it be that for most companies the best employees are already part of the organization? Igniting your employees’ full potential is dedicated and hard work, and for most companies, it could be wise to invest in tools to develop each and every employees’ competence.

Let’s take a look at some of the world’s greatest and most desired companies right now. How did they get there? Obviously for many reasons, but they have certain things in common, and whether we like it or not, their incredibly fast growth tells us they have made a lot of right decisions. Take FAMGA (Facebook, Apple, Microsoft, Google, Amazon), what do they have in common apart from obvious reasons like their products and financial strength? These companies are all younger than me (and I’m not that old!), in fact, three of them are younger than my oldest daughter…. They were established by founders driven by passion. Founders who wanted to change the world, with a clear vision and purpose.

Being able to develop and recruit on those principles, they attract like-minded people. They have had a tremendous growth, and although there are discussions now on what their motives really are, we think it’s safe to say that their business models have grown out of the energy created by the founders and people who work there. Every single employee plays its part and wants to be a contributor in making the world better. As a consequence, they make money. A lot of it.
Most businesses today are created and have recruited based on old principles. Principles that won’t work anymore. To make a transition from old to new is a completely different ballgame, and that ballgame needs to be put on all leaders’ agenda.

Creating value for the shareholders is of course still immensely important, but your employees are a matter of life and death for your business.

2. Your company has a very strong structure, and it has worked great for you for years

The traditional way of running a business just doesn’t do it anymore. Gone are the times where you had your own product that no one could copy, or produce better and smarter. Today, if your product is physical, some young hipster can take a look at it and go home, make it on a 3D printer in no time. Cheaper, stronger and faster, and with a sharper design.
Most likely the days when your clients came to you are in the past. Today you can get almost anything anywhere. You need to give your customers a reason to why they should come to you. Looking at the purpose-driven Generation Z (born after 1996’ish), they will choose who they shop with and who they work for based on the businesses’ values, and if they align with their own set of values. (This is backed in a wide range of research, for example here).

Your clients expect you to listen. You need to listen and be curious, so you know what they want and need before they do. They expect to get the best service there is, if they don’t, they’ll leave you for someone else. You’ll need to go out of your way to serve them, solve their problems, pamper them, thank them and improve their lives, however, best you can.
To be able to do that, you will need a passionate and curious workforce, with necessary authorization to do almost whatever it takes to keep your customers happy and satisfied.

Enabling this kind of dynamic workforce, the organization needs to be agile, and operate as a living organism. We can all agree the world has taken on a new pace, and we find it hard to keep up with everything the way we used to. There just is not enough time for the traditional structure to work anymore. You need to distribute power to everyone in your organization while cultivating let-go-leadership and innovation, (we work as a fully distributed team at Innovation Lab, you can read more about that here).

And it all comes down to customer centricity, a culture that must run through the organism’s veins. All the way from the board actually. There is an urgent need for most businesses to review the company’s organizational structure and all processes. Is the organization agile enough to kill a darling that’s just not selling anymore? Or reinvent it before someone else does? Do you have the guts it takes to rapidly try out new things, with the risk of failing? Are your internal processes based on rapid decisions, failing and continual improvement? Do you make good use of all the big data you already have access to? And is all this done fast and swiftly? Or are you stuck in a structure, with too long and complex processes? Give it some thought, and be honest about the answer.

3. Your leaders are strong and always fully updated on whichever tasks their employees are working on

Just not possible anymore, and definitely not what you want. Bear in mind, you want employees going out of their way to please your customers, and constantly ease their lives and solve their problems. They should be working their guts off to please, serve and solve. For them to be able to do that, you need leaders who go out of their way to please their team members. (Pay it forward, right?).

Future leaders need to have capabilities to spot and develop talent. Their passion should lie in creating talent in all team members, including the ones who are not necessarily considered talented. You might need new and different skills in your business, now that you’re being disrupted and challenged by new demands and competitors. It’s vital that your employees are led by leaders who really and truly take part and care about all their team members. Leaders who can guide the way when they need to take on new skills. Nurture their need and want for continual development and improvement. These leaders must be authentic and trusted by their team members so they can create psychological safety at the workplace.

Today’s businesses need to leave the traditional organizational structure and model behind, and move forward by developing an agile organization – or living organism – which is both stable and dynamic. Innovation Lab was founded in 2001, on the terms and principles crafted for innovative and agile organizations. Our core business and passion is to help businesses stay relevant. Some of us have always worked as consultants, helping various customers stay relevant. Some come from medium sized and large organizations, where the transition from traditional to agile and innovative has started, and for some, catapulted. We are based in various countries, working together remotely, or physically close – always as a dynamic team and organism. We truly love it!
We know a lot about what it takes to make the transition, it’s what we’ve been working on for more than seventeen years.
We have helped a lot of companies, public dinosaurs as well as private mastodons, transitioning into a more distributed organisational model, just as we have taken the turn ourselves. If you are interested in learning more about the transitions or curious to see if it would be fit into your company, drop us a line or give us a call, our passion is helping you stay relevant.