In our last post, we explored how to adapt to the Business 3.0 era with Success Skill #3: “Execution and Process: Innovate and Respond.” Here we examine the final one, Success Skill # 4, in detail. The Did You Know? Series supports the release of our video, “Did You Know? 6.0: Change to Thrive.”
Success Skill #4: Balanced & fair organizational structure.
Trust is key to results.
Trust in organization leaders cannot be assumed. In fact, surveys reveal that 4 in 5 Americans do not trust corporate executives. Equally unsettling, half of all managers don't trust their own leaders! Further, a lack of management commitment, passion, and involvement are the greatest barriers to change, which in turn can lead to organizational failure.
One might think, how about a reorg? Fewer than 1 in 3 major reorganizations produced any meaningful improvement in performance and some actually decreased company value. That’s because most attempts center on success stories for the company, not the culture—such as beating the competition, industry leadership, share-price targets and so on. This creates significant energy for change in only about 20% of the workforce. Buy-in by a majority fails.
Empowered employees excel.
What’s shown to work? Invite everyone to act as if they own the business—quite literally giving them a “business within the business.” In other words, empower people. When you reorganize the structure of a business to be more organic than hierarchical, you align employee incentives with the ambitions of owners and management. Rewards are real and tangible. Short-term and long-term benefits are in balance. Staff are rewarded when they are good stewards of the business.
Morning Star: all for one, one for all.
On example is Morning Star, the world’s largest tomato processor with annual revenues of $700 million. It’s succeeding due to an egalitarian and balanced organizational structure. Crew manage themselves, and report only to each other. Morning Star employees write personal mission statements that describe how they will contribute to the company’s goal, and there is a strong sense of mutual accountability.
Conversely, one of the factors that contributed to Nokia’s well-publicized disarray was its homogenous structure and culture. Nokia's top executives were of similar age, ethnic origin and background, and this hampered their ability to develop a multifaceted analysis of a changing international environment. The company simply lacked the capacity to adapt in a decisive and committed way. Combined with too-frequent, poorly implemented, organizational structure changes, Nokia went from a king in the mobile world to a technology history footnote.
>> To survive and prosper in today’s hyper-changing environment, organizations need a new operating model. At XPLANE, we call this new way of working Business 3.0—where an organization recognizes itself as a complex, dynamic, growing, organic system that strives to be nimble and learns to adapt over time. Business 3.0 organizations cultivate both strategic performance and a healthy work environment, where all employees excel in strategy, execution, and organization. With aspirational core values intrinsic to their strategy and workplace culture, organizations can excel in the Business 3.0 era.