How to Ensure Your Corporate Culture Can Respond Quickly to Market Changes
If we need to improve physical agility, we head for the gym. Or call a personal trainer. We work out until we've fluffed up, buffed up, and retrained our bodies to react more readily to physical demands.
If only we could build organizational agility as readily--especially when it involves the capability to respond quickly to changes in the market. Because we all know that the market is about as predictable as a ride on, oh, say the Iron Rattler at Six Flags Fiesta in Texas.
Yep. Looks about right for today's markets, don't you think?
Business leaders aren't relegated to buying a ticket and just trying to hang on while the world tilts on edge. We know from i4cp research that high-performance organizations (based on revenue growth, market share, profitability, and customer satisfaction) are nearly 3x more responsive to changes in the market than are their lower-performing counterparts. So how do they do it?
High-performance organizations respond to change
Leaders in those high-performance organizations (HPOs) understand that it requires a sort of double vision. Not the kind of double vision you get from that roller coaster ride. But the kind that means approaching the market from both inside-out and outside-in perspectives.
Looking at the market from the inside-out challenges leaders to apply knowledge of readiness by comparing their current human capital to the organization's anticipated future talent demands. How do they figure that out?
Understanding in and out
Two words: workforce planning.
And two more: gap analysis.
Creating lasting business success and high performance require an intimate understanding of the organization's workforce. What skills do employees have now? What will they need five years from now? Ten years? What do we need to do to get them to that decade mark with those capabilities? Regular identification of any gaps between skills supplies and predicted demands, done within the context of workforce planning, is the strategy behind an inside-out focus.
The outside-in view comes from environmental scanning, another activity that falls under the workforce planning umbrella. Scanning takes an organized approach to monitoring the marketplace. Keeping tabs on competitors and their activities; identifying trends in talent acquisition, technology, worker engagement and retention, compensation, organizational learning, politics, compliance, customer focus--these are factors that figure into understanding the overall environment that constitutes and influences markets. It's a big job, but they bear watching.
Companies like Capital One illustrate winning approaches that encompass the kind of double vision that drives performance. i4cp's The People-Profit Chain™, a model for organizational performance, reports that the company's culture is "centered on sensing and responding to market change." Analysts within each of Capital One's business lines track trends and engage in yet another workforce planning activity, scenario planning.
The company's structure enables "decentralized decision-making to promote quick response" to the market shifts that scenario construction helps forecast. Hiring targets employees who value learning and know how to surf the seas of change effectively. And "Capital One's performance system rewards both current results and development of competencies to support future needs."
Applying the lessons of high-performing organizations, such as Capital One, helps leaders tame the wild ride that is today's volatile marketplace.
To discover the other culture practices used by HPOs, download the complete People-Profit Chain report.