Beware your mindset when approaching the modern workplace.

I recently read an interesting article by Donald Sull entitled “Why good companies go bad”. In it he expands on the concept of “active inertia”, saying that “companies often respond to even the most disruptive market shifts by accelerating activities that succeeded in the past. When the world changes, organisations trapped in active inertia do more of the same. A little faster perhaps or tweaked at the margin, but basically the same old same old.”

Sull uses the example of organisations trapped in active inertia as resembling a car with its back wheels stuck in a rut. Managers step on the petrol and rather than escaping the rut, they only dig themselves in deeper.

He talks about clear commitments being required for company’ initial successes, but he says that these commitments harden with time and ultimately constrain a firm’s ability to adapt when its competitive environment shifts. He discusses distinctive success formulas which focus on employees, confer efficiency, attract resources and differentiate the company from rivals.

The Success Formula for Organisations

Five categories of commitments comprise the success formula for organisations:

§ Strategic frameworks – What we see when we look at the world, including definition of industry, relevant competitors and how to create value;

§ Processes – How we do things – entailing both informal and formal routines;

§ Resources – Tangible and intangible assets that we control which help us compete, such as brand, skills, technology, real estate, expertise, etc.;

§ Relationships – Established links with external stakeholders including investors, technology partners or distributors; and

§ Values – Beliefs that inspire, unify and identify us.

Initial success reinforces management’s belief that they should fortify their success formula. With time and repetition, people stop considering alternatives to their commitments and take them for granted. The individual components of the success formula grow less flexible – Strategic frameworks become blinkers, resources harden into millstones hanging around a company’s neck, processes settle into routines, relationships become shackles and values ossify into dogmas.

Ossified success formulas are fine, as long as the context remains stable. However, when the environment shifts as we have seen with the global pandemic, a gap can grow between what the market demands and what the company does. Managers see the gap, often at an early stage, and respond aggressively to close it. But their hardened commitments channel their responses into well-worn ruts. The harder they work, the wider the gap becomes. The result is active inertia.

Seismic Environmental Shifts

One seismic environmental shift, apart from structural changes in the global economy, is the advent of the interactive internet and its impact on the modern workplace. The new Internet has radically changed the rules of the game, customers have more power, companies have the ability to harness the Internet to apply many minds both internally and externally to collaborate and innovate.

Many companies are investigating the modern workplace, but they are still filtering their interpretation through their existing success formulas.

In organisations I have worked with, I often see the role out of modern workplace technologies from the IT department as though it was any other Enterprise technology like SAP or Oracle. Whilst there is nothing wrong with the technology being owned by the techies, the modern workplace has fundamentally changed the way that businesses will do business in the future and should be owned by the business. Often the modern workplace seems to be interpreted as the technical ability to blog, or an emoji, bolted onto a content management system for a website, or the document management system within an organisation.

The Modern Workplace

In reality, the modern workplace should be accompanied by a strategic review of how a company is doing business, its environment and its new, empowered customers and expanding markets. Processes need to be reviewed and designed from the user backwards, the way we handle orders and complaints needs to be streamlined, or the world will know all about a company’s unwillingness or inability to address issues. People’s skills need to be analysed, have they got what it takes to be able to communicate across porous company boundaries, do they know how to maintain their personal and company brands in an increasingly transparent business environment, has the organisation got enough dedicated resources to engage with powerful consumers and other stakeholders? What relationships are going to be key to the future of doing business and are the entrenched value systems compatible with a new business environment?

Many companies are looking to their suppliers for advice on how to roll out the modern workplace, if the suppliers are technology companies or management consultants, businesses need to realise that they will approach the modern workplace from their own mindset. Management consultants se the modern workplace as an extension of the conventional academic wisdom, often imported from America. Technology companies see it as an addition to the application architecture.

Realising the Full Power of the Web

Companies are not going to realise the full power of the web, if they don’t think through their success formulas, they will implement strategy, processes and technology in such a way as to reinforce or aggravate the “active inertia”, enabling people to do more of the same more quickly.

Generally, the skills in technology suppliers and management consultants are geared towards rolling out software and adhering to good project management principles. They are not strategic business thinkers and need to partner with people who are focused on how companies create competitive advantage and function in the business environment.

Applications do not conduct business, people do. If employees in the organisation are required to collaborate for the organisation to become more successful, then the fact that they now have the tools to do so is not necessarily going to improve collaboration, they may need to be taught to collaborate – when, why, how?

If people are required to engage with customers to shorten sales cycles, but the value system within the organisation is all about risk mitigation and proprietary methodologies, then the value system may need to be adapted to fit the modern business environment. If processes are designed from a point of view which suits the organisation and call centres have been deployed to cut costs, then no amount of emojis and blogs or the ability to “share” on Facebook is going to appease outraged customers who will take their gripes public.

The modern workplace requires greater levels of maturity within organisations and sophistication in how they function successfully in an ever-changing environment. By reviewing their success formulas companies can use the web to compete in an extraordinary way and conduct business in a structurally changed business environment.