As it turned out, COVID-19 was less a “black swan” (catastrophic but highly improbable) than a “gray rhino”—a big grey beast lumbering along the horizon and then suddenly charging ahead as a high-likelihood, high-impact event. The COVID-19 crisis proved to us all that resilience alone was not enough to survive disruption. Firms also needed to be able to adapt to the uncertainty of the “new normal”: They needed to be agile.
Building organizational agility into “business-as-usual” has been a challenge for decades, and organizations are often impeded by the leaders’ and managers’ lack of disruptive mental agility and suite of disruptive leadership competencies. Many of them have a misguided belief that agility and resilience cannot work together. On the contrary, our research has shown that the two can be complementary.
Today’s business environment demands organizations to adopt organizational learning as a source of sustainable competitive advantage. This means they need to learn to scale and deliver growth at clock speed while enabling agility and sustainability.
Enabling growth today in an era of constant disruptions and crises would require a deliberate focus on elasticity: building agility and sustainability
into the design of the organization while ensuring that the business can meet strategic business objectives and goals. Companies need to adhere to evolving societal standards and operate using sustainable business practices to scale and drive growth. Opting in or opting out of sustainability is no longer an option. Sustainable organizations expand the term “performance” to optimize environmental, social, and governance (ESG) outcomes as well as financial results. Since the relative emphasis on these outcomes changes over time along with the methods for achieving them, there is no sustainability without agility. Indeed, the digital era has revealed the implications for the effective design and implementation of agile and sustainable organizations.
Organizations must be prepared for future disruptions which would evolve into crises if they are not prepared and those. that place importance on resilience now, only to let become an afterthought later, will do so at their peril. COVID-19, with all its indirect impacts, is the most immediate critical event organizations face so far in this decade, but it is hardly the only one. There will be other potential forces that are creating new and constant waves of disruption—creating both opportunities and risks as outlined earlier in Chapter 2.
Companies experiencing fast growth must build an agile and sustained organization designed to rapidly deploy and redeploy talent and resources without denigrating operational capability in other areas. Capability building includes everything from training on how to run virtual meetings and executive coaching to workshops focused on teaching fundamentals around how to lead change. While companies face a significant opportunity to expand and realize revenue and profit growth, they may not always readily have the organizational capabilities to do so effectively. Why? For one, external disruptions to a given market (e.g., new regulations, innovations, and customer performance requirements) can quickly make current business and/or operating models less viable. Organizational designs must be able to outpace disruptive changes of environmental jolts, economic shocks, and more classical reorganizations.
To evolve, organizations need to develop continuous change capabilities. For organizations seeking to scale and grow, not only should their leaders inspire change and be effective “change agents,” but they also need to adopt an integrative and future-focused approach to their strategic redesign, allowing them to integrate structure, people, process, and technology (PPT) as leverage points to drive growth. Engaging leaders at all levels and aligning their growth and disruptive mindsets and providing the relevant incentives to reinforce new behaviors go a long way toward executing large-scale organizational design efforts and growing the company.
Research by the Centre for Executive Education (CEE) and the Disruptive Leadership Institute (DLI) on best-in-class organizations that have successfully navigated the disruptive challenges showed that they took concrete steps to dramatically improve their capacity to anticipate, respond to, and capitalize on the disruptive forces heading their way. As a result, both CEE and DLI have developed the “L.E.A.DE.R.” framework for organizations to prepare for the era of constant disruption and crises ahead that could threaten the organization’s sustainability.
Demonstrate Strategic Foresight
Leveraging cognitive readiness skills and disruptive mental agility where the leader could anticipate, predict, and prepare for their organizational future. This could involve activities such as learning to scan the external business environment, listen, monitor, notice, and learn from events, or things that can affect the organization. Strategic foresight seeks to help leaders think through uncertainty. It employs scenarios to consider how trends and developments in several areas may come together in different ways (“connecting the dots” to affect the operating environment of an organization both positively and negatively).
Demonstrate Cognitive Readiness and Critical Thinking
Next, the leader must be able to critically evaluate and analyze the data collected to develop insights, in other words, be able to interpret and respond to the present conditions. Building situational awareness and searching for latent problems and errors are two key skills in this space. Adopt the inspirational leadership style by encouraging experimentation and people to report anomalies, mistakes, and concerns, and providing confidence that these will be addressed is a fundamental part of this stage and may require a step change in the organization’s culture. This will enable people to explore the problem and encourage novel solutions, which might shift people’s mental models and adopt growth mindsets. (Someone with a growth mindset views intelligence, abilities, and talents as learnable and capable of improvement through effort whereas, on the other hand, someone with a fixed mindset views those same traits as inherently stable and unchangeable over time.)
Adopt System Thinking and Connect the Dots
Here, the organization must learn to monitor and review what has happened and assess the changes and implications from both risk and sustainability perspectives. This can be achieved by putting in place a robust process for identifying, prioritizing, sourcing, managing, and monitoring the organization’s critical risks and ensuring that the process is continually improved as the external or macro-business environment changes. Systems thinking offers a way to better predict future outcomes—based not on past events, but on a more intimate understanding of the surrounding structure and its elements. Structure, to a large extent, determines the behavior and actions of the leader.
Adopt Organizational Learning and Knowledge Management
This is about being able to correct organizational practices by learning from experience and past mistakes which is part of the organization’s knowledge management (KM) system. Future performance can only be enhanced if your organization is willing and able to change behavior as a result of experience. In simple terms, reflecting on an event is not about where the fault lies but what could have been done differently. Through KM, organizations seek to acquire or create potentially useful knowledge and to make it available to those who can use it at a time and place that is appropriate for them to achieve maximum effective usage to positively influence organizational performance. It is generally believed that if an organization can increase its effective knowledge utilization by only a small percentage, great benefits will result.
Reference: Sattar Bawany (2023), Leadership in Disruptive Times: Negotiating the New Balance. Business Expert Press (BEP) LLC, New York, NY. Abstract available at: https://www.disruptiveleadership.institute/second-edition-book/