Set the creative and entrepreneurial potential free

Fit for humans and fit for the future

Many organisations are aware of the need to change, to transform and to become different so that they can match the challenges of an environment they recognise themselves to be increasingly volatile, uncertain, complex and ambiguous. Most companies know that in this volatile, uncertain, complex and ambiguous (VUCA) world, their traditional way of doing business might be disrupted and challenged by new competitors, substitute products and services and even more so by the ever changing and emerging needs of a next generation of customers.

And while executive teams are trying to transform and change their organisations to become more innovative and agile, increasingly lean and customer-focused, less bureaucratic and hierarchical, many also struggle to comprehensively embrace all of these guiding principles in a way that aligns with their vision, their purpose and their strategic objectives. Only one in three projects deliver the change intended. Change is difficult.

To stay relevant today and tomorrow, organisations need to become more bold, entrepreneurial and adept in the face of change. They must embrace the dilemma and find ways to transform their organisations so that they can successfully address the fast-changing needs of customers, society and the environment in a volatile, uncertain, complex and ambiguous world.

In this world where top-down power structures and rule-choked management systems are becoming a liability and where bureaucracy is overburdening the organisation, crushing innovation and creativity, we believe that permitting to unleash human potential and creativity in organisations fit for humans and fit for the future is a valid proposition to solve this dilemma.

Design according to need – a law of nature

Everything that companies do to stay relevant has its origin in the law of the customer. This is one of three principles that Stephen Denning in his book “The Age of Agile” declares as having constitutional value at the level of “a law of nature.”

In its most simple form, companies must respond to the unmet needs of the customers with value propositions that are designed for the job to be done. They must fulfil these unmet needs in an effective, efficient and convenient manner – and do this without creating waste, respecting an increasing awareness of the footprint and the sustainability of their product or service of choice. To stay in the lead, they must pick up, respond and deliver on changes to their customers’ needs faster and better than competitors. This is how organisations stay relevant in the future.

Organisations that operate under the law of the customer have undergone a radical mindset shift and changed the way they are organised to explore and live up to the future needs of the customer. Vanguard companies flip around their model of a classical organisational hierarchy triangle and allow millions of customers to become the boss of the organisation. They use swarm intelligence and collective genius, which have been proven to be more successful and more efficient to deliver better solutions when confronted with complex tasks, to embrace the relevant set of multifold dimensions defining the future customer needs and to define winning offerings for these.

Many companies struggle to understand their current customers’ needs. And struggle even more with anticipating future customer needs, picking up weak signals from the future and pointing to potential changes needed. So while it sounds very logical, the organisational capability for “seeing around corners” – as Rita McGrath coins it in her newest book with the same title – is restricted to the few rather than the many.

So what does it take to unlock this organisational capability? To truly live by the law of the customer, to continuously stay relevant and at the top of the curve?

In a VUCA world that is living up to these challenges, the answer may lie in new forms of leadership and management models. These are becoming a prerequisite for companies to stay relevant in the future. And while providing an opportunity to stay ahead of competition, they also secure a sustainable competitive advantage because it is hard to do. Not because it is easy to copy.

The pathway to humanocracy

In their newest book “Humanocracy”, the authors Gary Hamel and Michele Zanini show how vanguard companies such as Michelin, Haier, Buurtzorg and Nucor have very successfully mastered these organisational challenges by killing bureaucracy and rebuilding their leadership and management model around human-centric principles.

These companies succeeded in unleashing the hidden potential of humans while creating organisations adapted to fit their expectations and are themselves as organisations fit for the future. They got rid of rigid, badly rated bureaucratic structures and unpopular silo-driven top-down management models. And they created trust in this new organisation and leadership model by demonstrating economic success and high net promotor scores of their customers.

For these vanguard companies, it was a long journey and a great effort driven by a mindset that in the book is summarised in seven guiding principles that form the pathway to humanocracy:

1. Ownership allows the members of a team to act like entrepreneurs and directly embrace the feeling of accomplishment.
   
2. Meritocracy recognises that natural hierarchies are correlating with competence and compensation with contributed added value.
   
3. Markets is acknowledged as a superior internal mechanism than top-down decision-making to align needs with the resources allocated to serve them.
   
4. Community builds on trust-based personal relationships that foster commitment, collaboration and creativity among all members.
   
5. Openness permits to openly embrace new ideas and encourages curiosity, learning and candour.
   
6. Experimentation permits to try out new things and experience the sense of fulfilment.
   
7. Paradox accepts the balance of competing objectives and enables trade-offs between different priorities.

All these guiding principles of humanocracy emerged because of experiments conducted by these leading-edge companies accompanied by an extensive research programme. For Gary Hamel and Michele Zanini, humanocracy is a movement that needs to be embedded step by step into an organisation and at their pace. The pathway to humanocracy is created by walking the path. The seven guiding principles, referred to as the DNA of humanocracy, provide a tangible sense of direction.

Implement Consulting Group is proud to have been integrated in the research of the book and has established a partnership with the authors. Our collaborative consulting approach is a perfect match to achieve revolutionary goals in evolutionary steps along the pathway of humanocracy. Organisations can count on Implement Consulting Group to assume the role of a considerate tour guide that supports them to become fit for humans and fit for the future. Organisations that are creating a measurable impact for their customers and their needs.