We know that the next decade will be a period of explosive connectivity characterised by speed and frequent disruption on an unprecedented scale. But, as the pace of change increases, how do you transform into an organisation of the future, quickly and in the right ways – structurally and socially? How do you help your people cope and motivate them to acquire new behaviours?
Organisations of the past relied on rigid structures and relationships to maintain control and get things done. But, in the future world, when everything is infused with intelligence, will culture emerge as the new infrastructure?
Recently, I’ve been doing a lot of work with my colleagues Rowena Westphalen, Managing Director of Strategic Innovation at Salesforce Ignite Asia Pacific, and Kelly Evans, Producer of Salesforce Futures LAB, to reimagine the role of the organisation and explore some of these questions. We’ve been exploring the implications of the Fourth Industrial Revolution and discussing the long-term strategies needed to become a successful organisation of the future.
But, before you can explore a future state, it’s important to understand why organisations have existed in the past. Eighty-odd years ago, Nobel laureate economist Ronald Coase theorised that organisations exist to simplify transaction costs – such as search, bargaining and enforcement.
But, is this definition still relevant today? One of the fascinating elements of the Fourth Industrial Revolution is the collision of two macro forces – technology and equality – both forcing organisations to transform. Here’s how:
The brokerage of trust has historically been a primary function of organisations, who’ve been in a better position to secure trust than sole traders. But, fast forward to today, and technology has opened up the marketplace, making it easy to search for a product and transact anywhere around the world.
Technology has also provided the framework for customers to be confident that the transaction is secure and reliable. But, now that any seller can broker trust, organisations don’t have an advantage, which means they have to be doubling down on maintaining, rebuilding and instilling trust.
The IT department’s core remit over the past 20 years has been to build, run and maintain IT systems. But, with the advent of cloud technologies and service-built architectures, IT teams now have the capacity to focus on higher order functions, such as enabling compelling employee and customer experiences.
And they have to, with new market entrants who don’t have legacy infrastructure to contend with delivering inspired experiences from day one. Organisations are relying on IT to deliver the fast, smart personalised experiences customers have come to expect.
At the same time, for the same reason, employee expectations are also changing. Employees want to have modern, consumer-like tech experiences in their work life, and there's a strong correlation between delivering a compelling customer experience and delivering a compelling employee experience.
Then you have transformative technologies, like artificial intelligence (AI), entering the mix. AI is the 21st century’s electricity – it will become a fundamental aspect of our day-to-day lives. The opportunity AI presents for organisations is huge.
As a number of transformative technologies – blockchain, AI, 3D printing, etc – all collide in the marketplace, at an unprecedented rate, across all industries, markets and countries, speed will become currency.
If you compare the Fourth Industrial Revolution to the three before it, the key differentiators are the rate of change and the scope of change. These are so significant that organisations need to build in a muscle to be able to respond.
One of the things we encourage our customers to do is to create an ‘innovation reflex’, where you can run experiments off to the side and test new technologies, without disrupting the entire business.
The second macro force that’s having a real impact on the future of organisations is the rise of equality. Technology has allowed us to have instant access to unprecedented levels of information, creating much more transparency in our world. As a result, organisations have to aspire to a higher purpose, particularly if they want to maintain the trust of customers and employees.
A recent PWC study found that 68% of Australian CEOs strongly agree that it’s more important than ever to have a strong corporate purpose reflected in an organisation’s values, culture and behaviours. And that purpose should be more than financial goals.
The organisation of the future will be defined by its culture, and culture is driven by strong leadership. We're moving to a world where there are more virtual workers and decentralised organisations, and culture is what will bind our organisations together.
Leaders need to be more careful than ever about the behaviours they choose to celebrate, the behaviours they choose to reward and the behaviours they choose to minimise – and they must lead by example.
Innovation isn’t about creating something brand new, it’s about looking at a scenario and coming up with a way to do it better. Children are the most innovative human beings on the planet. The reason for that is that they have a beginner’s mind – they don’t take things for granted and they question everything aggressively.
The ability to keep that beginner’s mind throughout your professional career and ingrain that into the culture of an organisation is critical for future success.
As traditional models are disrupted by technology and equality, we need to be building our organisations for constant change, instilling a culture of continuous innovation and a mentality that it's okay to experiment.
To blaze your own trail in the Fourth Industrial Revolution, download a copy of our new e-book We Are All Trailblazers.