Is your company designed like a car with a large dashboard and small windows? Many companies are: focused on internal operations and efficiency, their views of the outside world are limited.
But while that may have worked very well in the past, it likely won’t be enough in the future. “We have organizations that are like cars. They have huge dashboards but they have very tiny windows,” says professor Antonio Dávila. “Why is that? It’s because for the last 100 years, the organizations that succeeded were those that were more efficient. So the complexity was inside the organization.”
For Dávila, companies must redesign themselves to resemble a car with big windows and a tiny dashboard. That means execution will continue to be vitally important, but so will collecting information from outside the company to create new opportunities and competitive advantages.
It’s not just about responding to changes wrought by COVID-19. Even before the pandemic, the pace of technological change was accelerating, and billions of people were joining the market economy – especially across Asia – with the intent of creating new value and upsetting incumbents. Those dynamic mega-trends will only continue, amplified by COVID-19. “When we come out of this crisis, this tunnel, the world that we’re going to find is going to be very different from the one that we knew when we came in,” Dávila says.
How to prepare to reinvent your company? Here’s where to start:
Your competitive advantage will come from sensing what’s going on outside before your competitors, and the way to do that is to observe. But don’t rely solely on customer insights, since they will tend to favor what they’re used to. Instead, take a wider view. Look at startups and at companies outside your sector. Stay current on new technologies. See what’s happening in China and India. “The world is extremely rich with ideas,” Dávila says.
2. Embrace creativity.
This requires a fundamental shift in the purely execution mindset, and means you have to be prepared to experiment and to fail – learning from your mistakes. You have to wear an execution hat along with a creation hat.
3. Empower your team.
It’s impossible for a single person to anticipate everything that’s going on out there. Seek the opinions of, and listen to, your team. “From a leadership perspective you have to rely a lot more on your people, on their talents, on their ability to experience what’s going on out there,” according to Dávila.
4. Turn observations into action.
Put into place the mechanisms that turn new information into actions. That means starting with information-based management systems, which include processes for discussing this information and a culture that rewards outside-looking attitudes.
5. Keep learning.
“The critical skill, if I had to name one, is learning,” says Dávila. The knowledge you learn early in life is valuable but will not carry you through. You have to continually be upskilling, receptive to new knowledge and insights.
For more on how to prepare your company for the future, watch professor Dávila’s open access session Time to Reinvent Your Company.
This post is also available in: Spanish