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November 28, 2022

What a responsive company is like

In his book "The Innovator's Dilemma", Clayton Christensen explains how leading companies that are well-run by their executives succumb to the cataclysm resulting from the success of disruptive innovations that leave them out of the market.

Changes affect large organisations too

It is counter-intuitive to think that powerful organisations can be wiped off the map because their leaders lacked the vision to anticipate future developments: Did Nokia executives lack a digital vision in the late 90s? Did the leaders of Blockbuster and Kodak not see the digital revolution coming? Did telecommunications operators not realise what was happening while they were still cashing in on SMS?

In the pre-digital world, the sensory acuity of organisations didn't matter as much. Change cycles, new competitors, market disruptions... they all played out over years, sometimes decades.

In today's hyperdigital society, if you blink, you'll miss it. These days, someone could be creating a business model just down the street that will make you irrelevant before you have time to react to its appearance.


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The environment and organisations

Organisations need to identify the faint signs of the coming change. Leading companies increasingly need to be on the lookout at all times. Responsive companies are extraordinary in two related, but different, activities: listening and responding.

We need to create a structure that is completely geared towards interacting with the environment. But that's not enough; we need to establish the connections the organisation needs to react to signals and take action. We need companies that sense everything and act quickly and decisively.

The bottleneck to a rapid response and optimised execution is rarely found in the speed of the operation, in how quickly we do things. Companies generally have highly optimised operating processes, which are comparable to their competitors'.

What sets a responsive company apart from one that is not is how quickly and completely a company processes external knowledge and how streamlined its decision-making process is. To make a company work in real time, decision-making processes have to be optimised and simplified, and bottlenecks eliminated. And this almost always involves taking decisions as close as possible to where the action is. Taking those decision-making rights from the offices on the last floor to the places where the teams work.

The changes that have to take place to make a company more responsive, that is, to work more in real time, are profound and involve corporate processes, mindsets and culture. In some companies, achieving this will lead to a genuine reinvention of the company, since reactive behaviours will be so thoroughly ingrained in the heart of the organisation that changing them will require a great effort. One thing is certain: no matter what the company is like, the further the company is past its start-up phase, the more effort that will be required to make it work in real time.

Responsiveness is essential to success, but it can be elusive. Achieving this requires will and determination.

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alberto delgado
Alberto Delgado
Director de Transformation en SEIDOR