Creating Adaptive Organizations Jan 24, 2019 Since publishing The Adaptive Corporation in 1985, Alvin and Heidi Toffler have theorized about what organizations must do not only to survive but to prosper in a social-economic environment that is fundamentally different from the industrial era in which they were born. As part of our mission to provide clients a path to a profitable, sustainable future through actions to be executed today, Toffler Associates recently brought together a small group of executives to discuss organizational adaptiveness. Looking across both commercial and government organizations, we considered what lessons we can learn from organizations that have proven themselves “adaptive” in the fast-paced environment in which we all live and work. The participants considered two critical questions: 1. What are the vital attributes of an adaptive organization? 2. How do you make your organization more adaptive to the challenges and opportunities of the knowledge age? Defining the Vital Attributes of Adaptive Organizations In their discussion of different organizations—their own and others they’ve observed—we identified several attributes that seem to enable these organizations to adapt to the economic, societal, and other shifts that routinely occur around them. These attributes include: •The ability for all employees, departments, and groups within an organization to collaborate effectively. • The ability for all employees at all levels to network with others outside the organization, gaining new sources of useful information and helpful perspectives in the process. This includes networking with customers and other stakeholders, external industry experts, even with competitors or rivals. • The ability for all employees at all levels to innovate and experiment without fear of “reprisal” or marginalization. Instead, where the culture of the organization is to reward those who think innovatively, participants saw the greatest success in adapting to solve the pressing issues the organization faces. After identifying some of these “attributes of adaptiveness,” discussion centered on what many agreed is a key to creating organizations that have these attributes embedded into their structure: empowering from the bottom up. Three Ways to Empower Bottom-Up Change The participants pointed to three strategies for planting and nurturing the attributes of “adaptiveness” throughout any type of business or government agency. #1: Create Self-Directed Teams The foundation of any bottom-up transformation starts with the empowerment of self-motivated, self-directed teams. An abundance of structure and rule-setting tends to inhibit creativity and adaptiveness, particularly when the structure is hierarchical, the default organizational form for many prior to today’s knowledge era. In the experience of many of the participants, the most effective collaboration is voluntary, informal, self-supervised. Good personal relationships lead to successful collaboration as it’s hard to collaborate with people with whom you are “commanded” to work. “By mandate” teams have a hard time looking at their environment with an open mind—familiar assumptions and conventional approaches come to the fore. Smaller, self-generating groups are freer to challenge the dominant paradigms and arrive at new ways of adapting to emerging challenges and opportunities. #2: Bridge the Stove Pipes Through Employee Engagement The next strategy our group noted was to attack the segmentation of departments, divisions, and units within an organization. An organization cannot adapt to new circumstances if vital information is hoarded by any group. Only an unfettered exchange of insights and ideas among all the groups and sub-groups within the organization can build a comprehensive understanding of the environment and generate the right adaptations and solutions. Participants believed several different kinds of actions can help “bridge the stovepipes.” One approach is to develop “open standards for teams” to build trust, collaboration, and share ideas across the organization. Common methods of communication, approaches to problem solving, and modes of behavior are necessary to remove restrictions on the effective flow of knowledge that is so important to truly understanding a rapidly changing environment and adapting to its challenges and opportunities. These methods and standards should encompass all teams within the company and transcend all organizational boundaries. A shared vision also helps unite and inspire all the parts of an organization to adapt together toward a common purpose. One participant related the story of how the members of one company quickly coalesced in the hours and days after the 9/11 attacks to restore critical communications to the financial sector in New York City, unified by a vision of “customers first” and corporate responsibility that manifested differently for different parts of the company but was shared by all. When an organization has a shared vision, different internal stakeholders are less apt to let their “stovepipe” equities be a roadblock to the adaptiveness of the company as a whole in the face of rapid change. #3: Create Venues Where Employees Can Practice Adaptive Thinking Leadership must create space and time for innovation. Several participants noted that you have to shape the structure of an organization in order to enable employees to “think out the box” and create new ways of doing things. Many have written and commented on the need to create an environment inside the organization where employees feel the psychological and practical safety to collaborate and pursue new ideas—an “intellectual safe harbor” in which unfamiliar perspectives and approaches are expected and encouraged in response to, or anticipation of, unfamiliar circumstances. Often the “safe place to innovate” is established within the organization but outside the normal organizational forms—for example, “tiger teams” or “greenfields.” Just as importantly as creating the space and time, the upper echelons of the organization (as well as supervisors at all levels) have to demonstrate a genuine commitment to listening to the ideas from up, down, and across the organization, reinforcing positive behaviors when people use their safe venues to raise new ideas about how to adapt to what’s changing in the environment.