Hay Group recently issued a white paper following its international conference in Valencia earlier this year.
The conference, attended by a growing delegation of Maltese business leaders, is steadily becoming a yearly event for local managers and entrepreneurs. An abstract of the white paper addressed the global financial crisis, which struck so fast and furiously last year. This is just one manifestation of an increasingly volatile and unpredictable business climate.
A sustained period of economic boom may have masked it, but the world is characterised today by political uncertainty and extremism, fluctuating financial and commodity markets, unpredictable consumer sentiment, increasingly complex global trade, climate change, terrorism, genocides and the threat of pandemics.
To survive and thrive, organisations will have to adapt to a 'new normal'. This will be no easy task. It will require different leadership, different skills and talents, different organisational forms, different corporate priorities and different human resources strategies. And critically, it will require different thinking - not least an understanding that volatility is not, in itself, bad, provided you accept it and work with it.
This year's speakers, who included Fons Trompenaars, C.K. Prahalad, Vijay Govindarajan and Rod Beckström, left delegates in no doubt about the scale of the challenge facing them. However, they also made it abundantly clear that organisations that rise to the challenge can exploit volatility to create competitive advantage through deploying their resources more effectively.
Organisational structures in the new world will look different. Rather than traditional hierarchies that own all their resources, organisations will increasingly be networked structures that draw on resources from the whole system.
Within such fluid, flexible structures it will become far easier to 'co-create' products and services with customers and suppliers.
Technology will be at the heart of the new networked, customer-centric organisational model.
Embracing technology will therefore be critical for everyone in the organisation - not least HR, for whom the shift to the new paradigm will be a particular challenge.
But technology is just one of the 'discontinuous shifts' that organisations need to exploit if they are to encourage the kind of innovation that is critical to their survival. It won't be enough simply to adapt their existing business model; they will have to think in non-linear terms.
It's a lesson graphically illustrated by the very different fortunes of Ford and Tata Motors in seeking to create a new car for Indian consumers. While Ford's adaptation of its western model completely missed the mark, Tata's new $2,000 Nano - or 'people's car' - will not just revolutionise the car market in India; it will also disrupt car markets in the rest of the world because it turns conventional thinking on its head.
Abandoning their obsession with 'best practices' and thinking instead in terms of 'next practices' will be a critical challenge for leaders in the new world. What's more, within the more fluid networked organisational structures, the job of leadership becomes that of catalyst and co-ordinator rather than command and control. As such, they will need to be humble, emotionally intelligent, collaborative and comfortable with ambiguity.
Being able to manage future and current challenges together, and to integrate apparently contradictory objectives, will be vital. So, for instance, chief executives shouldn't prioritise shareholder value over customer satisfaction; they should satisfy customers to the extent that it creates shareholder value. Likewise, instead of choosing between developing their people and becoming more cost conscious, they should develop their people to help reduce costs.
Leaders will need to work even harder to engage the hearts, hands and heads of their employees in an economic climate characterised by dramatically shifting demographics and intensifying competition, particularly from China and India, which will require everyone to work harder, longer and more flexibly.
The current downturn notwithstanding, talent will be a more important source of advantage and innovation over the coming years than it has ever been. Shifting to this new modus operandi won't be easy; nor will it happen overnight. But there is no standing still and certainly no going back.
The world has changed irrevocably, and organisations that want to prosper have to observe new rules and develop new practices. For those that do, the prizes are there for the taking.
To read the full white paper, visit www.haygroup.com/ww/register/index.aspx?p=/ww/Downloads/Details.aspx?ID=21413.