The growth and success of an organization is never guaranteed and needs to stand the test of time. Mark J Perry of AEI shares that, “only 12.2% of the Fortune 500 companies in 1955 were still on the list 59 years later in 2014, and almost 88% of the companies from 1955 have either gone bankrupt, merged, or still exist but have fallen from the top Fortune 500 companies.” As we grapple with the challenges of the VUCA World (VUCA stands for Volatile, Uncertain, Complex & Ambiguous), we can see that growing the business is not any easy feat and the rate at which organizations fail is increasing.
Peter Diamandis, Founder & Executive Chairman of XPrize Foundation and named by Fortune Magazine as one of the world’s 50 Greatest Leaders, observes that “The rate of change is too hard to fathom. But they need to be aware that many of today’s F500 are in danger. A study from the John M. Olin School of Business at Washington University estimates that 40 percent of today’s F500 companies on the S&P 500 will no longer exist in 10 years.” If there is a probability for a business to fail in 10 years, what can Leaders do today to drive organizational growth?
In my career of 21+ years working for diverse organizations, I have had the opportunity observe & learn how leaders can ensure the growth and success of an organization and I believe in what J C Penney said, “Growth is never by mere chance; it is the result of forces working together.” So what are the factors or forces which can support the growth of a business? In my view the following will play a vital role in business growth and I am sharing in no particular order of importance.
a.Innovation – Janet Sernack, Founder & CEO of ImagineNation writes that “Organizations who see & act upon the opportunities and possibilities for change through innovation in the current volatile and uncertain, business environment will not only survive; they will successfully compete and even flourish in the face of the range of emerging adverse and fluctuating business and economic conditions.” The key points to understand are whether the organization values innovation, nurtures an environment of innovation, how innovative ideas are triggered and captured and how they are executed. I believe that innovation does not happen overnight and it has to be nurtured and has to be part of the business strategy. One key foundation for Innovation is to harness the creative potential of the employees. Nurturing Creativity will require supportive leaders and a supportive environment. What happens if an employee has a creative idea – is it shot down or listened to or acted upon? Do we ask the frontline employees for their ideas? Leaders play a key role in this and they have to create the space and environment for people to bring out their creative potential.
b.Collaboration – A key challenge for organizations will be to facilitate collaboration within teams, between teams and with external environment for organizations to sustain and grow. Given the increasing diversity due to multiple generations, globalized business environments and speed of change, nurturing collaboration becomes a challenge. For example the tendencies to send an email instead of speaking or walking across to connect, silos within an organization creating islands are some examples of lack of collaboration. So what can we do differently –Are the Goals aligned? Right Goals drive the right behaviour and the goals need to be aligned to the overall mission. Is Collaboration part of culture? If collaboration is not a part of the culture, it will not survive. More importantly are the Leaders collaborating? The tone needs to come from the top and when Leaders collaborate, their teams follow.
c.Learning – Henry Ford said “The only thing worse than training your employees and having them leave is not training them and having them stay.” Learning has to be part of the leadership agenda and culture for it to succeed. Sometimes the biggest challenge will be to get the nominated employees into the classrooms. Many drop out citing reasons of work and they are supported by their supervisors also. This is a serious leadership issue – if employees are nominated for a program, leaders need to ensure they attend and this is a basic responsibility to show the importance of learning. Having a culture of learning from mistakes is important. While mistake proofing the process is critical, focusing on the problem rather than the employee when a mistake happens is critical for nurturing a learning environment. Organizations need to have a knowledge management system to capture the learning and record for others to learn from. The best would be to facilitate a coaching culture where a leader becomes a coach to his/her team members. Monique Valcour in the HBR Article “If you’re not helping people develop, You’re not Management material” writes that “the manager-employee dyad is the new building block of learning and development in firms.”
d.Culture – In all of the above I have shared the importance of Culture. The critical success factor for culture will be whether the culture nurtures, facilitates, motivates, encourages – the right behaviours & values, new thinking, inclusiveness, positivity & energy and more. The most important aspect for the culture should be to value and cherish the people. In the words of Ian Hutchinson “Your number one customers are your people. Look after employees first and then customers last.” The Deloitte Global Human Capital Trends Report 2016 shows that “82 percent of survey respondents believe that “culture is a potential competitive advantage.” Culture is the DNA of an organization and organizations are known by their culture. If the DNA (Culture) is not built to sustain/support Business Growth, the future will be dim and Leaders play a key role in articulating and role modelling the cultural elements.
e.Leadership – Now we have come to the most important factor or force for Business Growth – Leadership. The first question we can ask is whether the Business has the right Leaders? In the words of Carl Icahn “The CEO is, by far, the most important decision for a company… The company is going to rise and fall with the CEO.” The same is true of other leaders in the organization. The next question is how the organization is developing leaders. Leaders play a key role by developing other leaders, defining strategy and ensuring execution, nurturing the right culture and taking care of the most important asset of the organization – People. If Leadership is compromised, business growth will be compromised.
It is important to ask what is at the heart of Growing the Business in a VUCA World. In the words of Doug Conant “To win in the marketplace, you must first win in the workplace.” If Leaders take care of their people well, the people will take care of the growth of the business in a VUCA World and this is at the heart of business growth.