In a previous post, I explored the importance of adaptability in large organisations, a concept I referred to quite unoriginally as Strategic Agility. I hope I was quite persuasive about the importance of being able to change direction quickly to even large and very successful organisations.
The task of operating large organisations at speed is a topic that John P Kotter is making his own, in his book and Harvard Business review article – Accelerate! Kotter argues, quite convincingly, that the hierarchical structures and organisational setups that form the foundation of modern corporations fundamentally fossilise a solution for a given market or problem. What they don’t do half as well is to drive successful change initiatives or deal with rapid change.
The solution according to Kotter is to set up companies with a dual organisation structure. Kotter suggests to complement the existing hierarchy with a loose ‘strategy’ network that is organised in the amorphous way typical of a startup, but is crucially set up to be the equal of the hierarchy. While a number of people will be in both systems, most leaders and team members will be a member of one or the other. This is not a ‘Skunk Works’ initiative. It is a core part of the overall organisation, one tasked with developing, nurturing and chasing new markets, businesses, products and ideas. In time, businesses created by the network will be absorbed into the hierarchy.
The key insight provided by Kotter, is that as companies grow (or as the jargon goes, ‘scale’), the very mechanisms put in place to coordinate the growing organisation prevent it to flex or change. Kotter therefore advocates that the company maintains a start-up like structure reporting to the CEO or executive board. While I have not seen many examples of this kind of permanent dual organisation, the principle remains valid. For a change strategy to have credibility, it must be seen as an equal to the mainstream business. Too many businesses keep their innovation arms subservient to today’s cash-cows to be successful. Tomorrow’s stars are under-invested in for fear of killing off the cash cow, until the point arrives at which disruptive competitors kill your cash cow. I have seen this at close range where the formally high-margin text messaging service offered by mobile operators remains essentially the same service created in the ’90s, completely superseded by a fantastic diversity of messaging apps.
Where Kotter is more compelling, is in his recipe for accelerating change. Kotter describes eight accelerators from building and maintaining a coalition to celebrating short-term wins. None of the eight accelerators are in themselves particularly novel, and any change practitioner is likely to be using them to some extent or other. What is effective however is the central theme – creating a sense of urgency around a single big opportunity. Without urgency, there is no need for speed. Without the need for speed, there is no need for the network. This is, in my opinion, the key theme of this book. Urgency is a strong emotional force that can be channelled to drive change.