Corporate Agility today will drive a greater social change in the future.

Summary:

• The change impacting corporates will inevitably come as inequality rises, global systemic problems become more frequent and uncertainty about the future grows.
• Furthermore, with social and consumer activism supported by proliferation of information and information sharing networks, corporations choosing to still focus predominantly on profits, and not on strategic governance or social aspect of the business, will be naturally de-selected from the economy.
• This shifting world order means that in order to survive, corporates need to become better at making strategic decisions, build discipline to learn quickly and adapt their strategy in time.
• Adopting Agile practices and responsible leadership today will help corporates to not only to survive, but also build stronger communities that will accelerate and reinforce the future social change.

Many economists agree that the current market capitalist, or neo-liberal system is not sustainable and will inevitably require change to avoid further polarization, discontent, escalation and slowing productivity. We do not need to go far for clear signs in our day to day lives, as we see the rich get richer and poor get poorer (since 2012 alone, 90% of wealth has gone to 1% of the richest) and the feeling of security in the future dwindles. Growth is predicted to slow and inequality to increase by 40% in the next 50 years, according to OECD. Furthermore, the middle-class, the working horse of the western world, is expected to shrink by 2030, and as a result, western countries are facing yet more difficult geo-political and economic choices considering rising middle class in the developing markets. There are many proposed solutions to the problem, both socioeconomic and political, from wealth transfer to building more ‘maternalistic’ community focused political systems with organizations playing an important role in catering to society’s needs.

Already today corporates are being forced by investors and shareholders to establish sound corporate agendas that are in line with investor ESG requirements. However, ‘governance’ is a term often misused and instead in practice results in ‘compliance’. This could be partially explained by the proliferation of technology turning the fundamental principles of current capitalist economics on its head. In the past decades, we started increasingly moving towards ‘information capitalism’, where goods are shifting from scarce property-based goods towards information goods. The resulting competitive forces have prolonged the focus on the profit generation for many disrupted corporates to stay afloat economically. The continuous focus on profits is unlikely to uphold long-term, as more and more consumers are starting to demand equitable distribution of the growth dividend and vote with their wallets against less socially responsible corporates. They are increasingly adopting information networks and technology to spread the discontent, leading to natural de-selection of some companies. Focus on human capital is increasing too, as corporates need to start delivering tangible change — support for communities starts with supporting own workforce and companies need to walk the talk, as we are on the wave of technological development, such contradiction are no longer tolerated and human capital too is starting to vote with their choice of employer.

In strategic transformations of the last few decades, one often finds that the principles are adopted without adopting the fundamental values. For example, adopting Agile operating models and way of working, without loosening control and giving more trust and empowerment to the people that are working on delivering value for the company. The changing world order means that the corporates will inevitably need to move away from green washing and superficial and nominal solutions. Companies will need to completely re-invent the leadership to truly invest long-term into focusing on client without compromise — see the customer as bloodline of their existence and empower the skills that are needed to execute on the corporate purpose which puts that very customer first. The leadership will need to change its perception of risk and instead of focusing on risk avoidance, compliance, focus on defining risk as ‘capacity for quick recovery’ from failed initiatives — the true agility. This means turning relationship with the workforce from transactional to a more strategic one, from treating your workforce as tools to treating them as assets. Establishing the right vision, structure, and processes to support value delivery, clearly defined, and communicated by the leadership to the organization, will also be required to bring agility to life.

Good news is, there are companies that have already adopted agility on the leadership level and are paving their way to becoming more resilient and competitive, making Digital technology central to their business models, and adopting the agile way of working as unavoidable necessity, since in most companies, people are still the ones performing most tasks. One of the fundamental principles of agile way of working is lack of fear of the uncertain, instead prompting people to take weighted risks and action, creating a risk-free environment where mistakes are the source of learning. It also makes people work in an integrated way as a community, instead of working in a cubicle on one concept or solution that few will understand and therefore need. It will create a future generation of people, that are much more capable of building communities, defining joint purpose, and working together towards achieving it. This has potential to create political and economic expectations in future generation and will likely drive and reinforce the needed change. The companies that are adopting agile at scale the way that is intended today, are likely to become pioneers in shaping the future societies and stay relevant in the future.