Organizational Velocity is a book for current and aspiring executives seeing the disruption at their doorstep, but not knowing how to break through the cloud of uncertainty. I know the feeling. I was in their shoes, and this question drove me back to school at the age of 51 to find the answers I could not find in my corporate job. Through years of research and insightful interviews with established, digital, and military leaders, I landed on an undeniable fact; the world has changed, but the mindsets of corporate leaders have not. They hire the consultants, send their top managers to Blue Ocean Strategy training, and then check the box. These actions are not transformation; they’re window dressing.
Organizational Velocity is not a how-to book; it’s a how-to-think book. It describes the continuous learning process of observation, acceptance (or not), and action (or not) that creates a virtuous circle of progress. The book addresses the friction inside the four walls of corporate offices that must be lubricated before velocity can occur. It’s the difference between what theoretically should happen and what does happen.
For leaders in the trenches, the situations addressed in Organizational Velocity will be as familiar as a Dilbert cartoon with a pragmatic path forward. It’s not a quick fix or for the faint of heart, but nothing worthwhile ever is.
The nature of competition has fundamentally changed over the last ten years, challenging the defensive paradigms of incumbent companies. Thriving in our digital world requires OV, the ability to observe, accept, and act on opportunities with speed and agility.
The Fortune 500 is turning over at record speed. Why is that? The introduction addresses my motivation for writing this book and desire to help firms with what Clayton Christensen said to him: “The most important data is that which has yet to be created.” This book steps back and says, “After all the books and resources on disruption, what is not working? Why can’t many incumbent companies get out of their own way?” A couple of decades of disruption literature have not changed the behavior of incumbent and legacy organizations.
Do You Want to Live?
Organizational Velocity is a way of life for leaders who want to build forever companies. There are many legitimate reasons that leaders pursue paths to short term profitability gains. If this applies to you, then you can put the book down now. The principles outlined in Organizational Velocity only make sense if there is a will and expectation to live. There is a difference between leaders who are genuinely searching for the right answers and those who purposely manipulate the system for short-term personal gain at the expense of their workforce. They are essentially choosing “not to live” for the rest of the people actually doing the work and creating value.
The Thinking Problem
Calibrating your mindset to the new realities of the digital economy is a prerequisite to meaningful action. This chapter is the first of two thesis chapters. Chapter 2 focuses on the cognitive barriers that persist in leaders that slow decision-making and limit options. Time is a luxury not afforded to today’s executives who must judge the celerity of innovation waves accurately or be turned bottoms-up by them.
Unlocking Persistent Advantage
Next-generation leaders are tackling the dynamic business environment by becoming more dynamic themselves, operating with faster OV. OV is a modus vivendi for persistent advantage and is defined as the capability to observe, accept (or not) and act (or not) on threats and opportunities facing the firm with speed and agility. OV is not a linear process, but rather a series of forward-moving feedback loops influencing both the speed and quality of learnings as well as the ability to act at the most opportune time (best-mover not first-mover).
The choices organizations and individual leaders make throw sand or oil in the gears of OV. It’s the difference between acting OV and being OV. “Acting OV” is that annoying kid in your MBA class who parrots what the professor just said. He acts the part but doesn’t move the needle. “Being OV” requires the hard work of creating an environment where real-time inputs can be assessed and acted upon with speed and agility. It’s being open to new realities with a fierce pragmatism for turning each learning into further action, creating continuous forward momentum for the business.
From Manager to Maestro
CEOs set the tempo by adjusting risk-tolerance and metrics, so learning relationships among the people inside the company are as fast as, if not faster, than those outside the company. They are also in the best position to overcome the inevitable resistance to change created by management fiefdoms, legacy mindsets, and risk aversion. Contrasting examples of transformation at Siemens, Schneider Electric, Ford, and GE provide the palette used to paint the picture of OV leaders. The most distinctive characteristics of an OV leader are humility and the ability to inspire and align through words and actions.
There’s no velocity without a different kind of trust. In the old model, trust is earned and meted out slowly over time. In the new model, trust is given. If an employee can’t be trusted immediately with spending authority and access to data, for example, then he or she should not be hired. The only way for an organization to learn quicker is with extreme trust. It’s reflected in everything that an organization does. There is obviously central guidance with goals and parameters, but employees are not bogged down by process. They are acting, they are learning, and they are reacting to real-time information.
It’s Board, Not Bored
In the previous chapter, we established that the CEO provides permission the organization needs to generate OV. The group that gives the CEO permission is just as critical, and less-often discussed. In an age when cognitive technologies can transform culture in unexpected ways, boards play an influential role in setting the strategic framework, calibrating the appetite for risk, and keeping the organization true to its mission and values; or it doesn’t.
Was COVID-19 on the full agenda of your January 2020 board meeting? What about disruptive technology? If not, that is a red flag (or a white flag). Too often, board presentations are watered-down versions of the truth meant to pacify rather than engage. The board’s purpose is not merely to rubberstamp but to think aggressively about the future.
Be the Third Pig
When we were growing up, nobody wanted to be the pig who built their home with straw or sticks. We wanted to be the third pig who made their home out of bricks, capable of withstanding the mighty blows of the wolf. Don’t we still want that as grown-up leaders of companies? Building a company that thrives when faced with wolves of different coats requires vision, time, and effort. Chapter 7 uncovers the building blocks of an OV organization that is open, agile, and adaptable, where failed experiments are welcomed as learning experiences, and priorities can pragmatically shift in response to external changes. This is not command and control; it’s sense and respond. Done right, OV reduces friction within a company while at the same time creating friction in competitors.
You Can’t Eat Ideas
No, we can’t eat ideas, hug data, throw an algorithm, or sit on a cloud, fluffy or otherwise. We are, in fact, living in a material world (hat tip to Madonna). The digital economy meets the material world in an often overlooked and underappreciated function, the supply chain. While OV is essentially a rapid-learning paradigm, it is all for not if action is not taken to convert raw materials into products we can eat, hug, throw, or sit on. The best supply chains go unnoticed; the worst are unavoidable. In this chapter, I draw upon my TED Talk, my 27 years at UPS, and my research at the University of Tennessee’s Advanced Supply Chain Collaborative to illuminate the supply chain’s critical role in creating persistent advantage through OV.
Building Your OV Muscles
This final chapter provides the payback on the reader’s investment by answering the question, “How do I make OV work in my organization?” The building blocks of OV come together in a training guide for executives in a technology-empowered VUCA world. The guide is designed to help organizations build their OV muscles their way.