The speed of business is accelerating enabled by new technologies (e.g. Artificial Intelligence, Cyber-currency, Internet-of-Things, Biotech, Nanotech, Robotics) management and work-practices practices of the 4th Industrial Revolution. Increasingly the context of business is recognised as being volatile, uncertain, complex and ambiguous (VUCA). A recent study indicated that the capacity of the firm to anticipate and react to emergent opportunities and threats in the marketspace in which it operates produces competitively superior performance. The study showed that the share price of firms with above average Dynamic Capacity outperformed their own industry peers by over 30% (over the 5 year period Dec 2014-Dec 2019). Whereas the share price of those firms with below average Dynamic Capacity underperformed their industry peers by approx. 15%. The study showed that the measure of a company’s Dynamic Capacity is a leading indicator of future share-price performance compared with sector peers and is of greater importance as an indicator of comparative performance in faster evolving, less stable, contexts.
There are the three groups of capability that differentially enable an organization to thrive in the dynamic context of 4IR:
- The level of Dynamic Capacity is determined by the combination of three capabilities, determining the capacity of an enterprise to pivot and adapt in a timely manner to the future as it unfolds.
- Sensitivity to the forces and events that could drive change (and the ability to make-sense of these, to distinguish which are most important to pay attention to).
- The ability to quickly decide how to respond and to implement actions that seize on an emergent opportunity, combined with the ability to rapidly scale-up and replicate these initiatives elsewhere.
- The ability to adjust the activities and assets of the corporation, how they are configured, what is within and what is outside the boundaries of the enterprise, and how they collaborate externally.
2. The desire and ability to develop Dynamic Capacity is driven by a strategic outlook that is forward-leaning; a hunger for the ‘to be’ rather than comfort with the ‘as is’. This also has three identifiable components.
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- A clear, ambitious vision for the future that aligns and energizes stakeholders. Often such visions are based on the pursuit of a societal impact (Purpose-led).
- Empowering managers to own and to resolve seemingly conflicting goals; such as enhancing operating efficiency and also seeking greater flexibility, or the tension of delivering on current period budgets and forecasts whilst building the capabilities and processes for tomorrow.
- The organization needs to be energized by continuous adaptation and adjustment. Organizations can become ossified due to their existing practices and organizational structures; departments optimising their performance at the expense of overall, total firm performance.
3. The ability to leverage and maintain the Dynamic Capacity is dependent on being effective in developing and deploying 4IR capable talent. In 2020, the World Economic Forum predicted that 50% of employees in developed economies will need to reskill, adopting 4IR relevant skills, by 2025. There is a significant and growing deficit of the skills required for 4IR, both technical skills and managerial and leadership skills. Most people haven’t had the relevant education or experience to manage in 4IR. Three key shifts in talent management are essential to operating dynamically:
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- The ability to continuously upskill and reskill, at pace, across large proportions of the workforce.
- The ability to deploy talent fluidly and flexibly. In particular, the ability to form, perform and reform in teams, creating opportunity and career mobility.
- The adoption of human-centered workforce practices that promote employee well-being and support appropriate flexibility.
Acceleration officer is the executive who, looking across the organisation, helps to identify where and how the agility and speed of the enterprise can be increased; they look across the breadth of evolving technologies, the opportunities for upskilling, adjusting business models and key processes to identify how to increase Dynamic Capacity. The Acceleration Officer looks outward to understand what are the developments that could have most relevance for the corporation and they look into the corporation to coordinate and enable continuous evolution. The role may be incorporated within the position of the Chief Operating Officer or Chief Innovation Officer or similar, or may be a dedicated person. It should not be viewed as a singular programme of change or transformation, but rather an ongoing requirement. The Acceleration Officer plays an important role in navigating evolution. They peer intently into the fog of the unknown future, providing insights and assessments for the executive team; they are responsible for helping to formulate the evolution roadmap. They also provide governance of the evolution journey, coordinating across all the different initiatives that are being pursued at any one time. The Acceleration Officer promotes the culture that change is constant and the mindset to ‘never settle’ but rather to always be seeking new ways to adapt, evolve and accelerate; building and leveraging Dynamic Capacity.
The Dynamic Capacity of the organisation is the measure of the company’s ability to adapt and adjust in a timely manner as the future unfolds. Dynamic Capacity is of increased importance the faster evolving or less stable the context of the firm. It is a leading indicator of future performance that can be measured. The Acceleration Officer supports the leadership to identify and implement actions that increase and effectively leverage the Dynamic Capacity of the corporation for competitive advantage.
Management and Leadership in the 4th Industrial Revolution by Stephen Wyatt is published by Kogan Page, priced £19.99, available online and from all good bookshops.
