This session covers the anticipative organization building block. It argues that huge companies behave like oil tankers, changing course by a degree with great effort, and that this way of working is going out of date.
The alternative is a flock of birds: organizations that overperform on working together while staying agile, moving in sync toward an opportunity or around a threat, coordinated by a shared vision rather than by process.
Key findings
- Competitive agility splits 68 percent of overperformers against 16 percent of underperformers.
- Effectively removing internal barriers splits 50 percent against 24 percent. The question was written after a Bain study in which 94 percent of senior executives at companies over 5 billion dollars named their own dysfunctional organization as the biggest impediment to growth.
- Internal connectivity splits 67 percent against 35 percent, and external connectivity 67 percent against 39 percent.
- LinkedIn data puts numbers on those bridges. Individual contributors at overperformers are connected to other internal functions at 3.5 times the average rate, and to directors and above at 5.5 times the average rate.
- The same data shows employees at overperforming companies have 29 percent more external connections than those at underperformers, which the session reads as ideas arriving through employees rather than from on high.
Structure: from closed to open
The first shift is out of the not-invented-here syndrome, where companies reject good external ideas because they are convinced they know better or that their business is different.
The case is Procter and Gamble in 2000, where innovation success had stagnated with only 35 percent of new products meeting their financial objectives. The team concluded that internal resources could not meet the growth targets and shifted from an invention model to a proudly found elsewhere model.
The chief executive set a target that half of innovations would be acquired outside the company, without replacing the 7,500 researchers inside it. The team estimated that for every internal researcher there were 200 equally good scientists or engineers in the world, around 1.5 million people.
By 2016, 35 percent of new products had elements originating outside the company, innovation success rates doubled and overall costs fell, with products including Olay Regenerist, Swiffer Dusters, and the Crest Spinbrush.
A shadow board is the second structural device: younger employees or external appointees advising senior management. At Gucci a committee of employees all under 30 meets the chief executive periodically, and he also lunches with individual junior employees asking each for three ideas to improve the company.
Roles: from fixed to fluid, from hierarchical to empowered
Overperformers win the war in micro-battles, assembling fit-for-purpose teams because they are the right eight people for the job, working until the goal is met and then disbanding, regardless of what the RACI said.
Haier took that further, pulling down the pyramid into microenterprises of 10 to 15 people that function as separate businesses, contracting with one another and deciding their own strategy, hiring and firing, leadership selection, and rewards.
Gojek makes each of its 30,000 delivery drivers a mini-CEO, asking what the driver thinks the opportunity is and how to address it, and supporting an opportunity a driver spots before questioning it.
Empowerment at the front line shows up as budget authority. Pret a Manger has a random acts of kindness policy giving each branch a budget for free coffee and food, with no detailed guidance on who receives it, and the Ritz-Carlton lets employees spend up to 2,000 dollars to solve a customer problem without asking a manager.
The third shift is from function to project. Liberty Global uses task forces led by managers from marketing and non-marketing functions to optimize key customer engagement points, with different durations and different talent mixes.
That model is described as both agile and disciplined. It requires central leadership to trust that local teams understand the strategy, and works only when everyone is inspired by the brand purpose and clear about the goals.
The agency relationship, rebuilt
VodafoneZiggo is presented as a working example, organized around the customer journey of get, keep, and grow, with quarterly planning and full functional integration internally and with the agency.
The agency side moved from multiple specialist agencies to one bespoke team, from leadership per agency to one empowered leadership team, from multiple entry points to one, and from individual profit and loss accounts and contracts to a single one.
The stated benefit is integration without the client refereeing competitors, eliminating hundreds of handovers, with a contractual agreement excluding agency chief executives from involvement. Two learnings are recorded: distinguish run from change projects, and get clarity on business and brand strategy pillars.
Meetings
The case for changing meetings is quantitative. Professionals lose 31 hours a month in unproductive meetings, research indicates over half of meeting time is wasted, 73 percent say they have brought other work to meetings, and 39 percent say they have dozed during one.
The shifts asked for are from update and informing to action and decision, and from siloed to cross-functional.
Two mechanisms are offered. At Brivo, employees raise a no rehash paddle when someone reopens a decided topic, which the chief executive describes as empowering anyone to call out rehashing without having to justify invoking the rule.
The other is forced preparation, described through the Amazon practice of every attendee reading a six-page structured memo in silence for the first 30 minutes before discussion begins.
What the leader does
Open innovation needs funding: the right people and budgets to find the best external partners. Nestle’s Digital Acceleration Team runs an open innovation platform that lets it collaborate with outside entrepreneurs and businesses to solve existing problems faster.
Partners should be invited earlier and given broad problems rather than specific input requests, which widens the pool of collaborators and leaves contributors bought into the whole project rather than only their piece.
Shared success metrics are a warning as much as a method. Using seniority to squeeze collaborators is described as likely to doom the relationship, and the advice is to understand what partners want, agree metrics early, and be transparent about progress, remembering that innovators often need expertise rather than only financing.
Leading by example means not assuming the job is done once a partnering team exists or a hackathon has run. Curiosity, meeting potential partners, and staying open to ideas from anywhere in the ecosystem create the conditions for others to behave the same way.
Marketing is named as the part of the organization where experimentation should thrive, through little bets, so the company can test new opportunities without changing direction every time a technology emerges.
Networking is defended on the same grounds, quoting William Gibson that the future is already here and just not evenly distributed yet, so being out there is how you find it before competitors do.
Scope and limitations
Several of the strongest numbers come from outside sources rather than the IRG survey: the impediment to growth figure is from a Bain study, and the connectivity multiples and the external connections figure come from LinkedIn data.
Source
This page summarises Anticipative Organization, by Institute for Real Growth, 2021.