McKinsey’s Nine Imperatives: Building ‘future-ready’ organizations

Covid-19 has radically changed the way organizations operate, and it is ready to set the new imperatives into the game.

McKinsey describes nine organizational imperatives that will separate future-ready organizations from the pack:

Imperative 1: Take a stance on purpose

A firm sense of corporate purpose is a company’s unique affirmation of its identity – and it personifies everything the organization stands for – whether a historical, emotional, social, and practical point of view.

A clear sense of purpose helps people navigate uncertainty, inspires commitment, and even reveals untapped market potential. Future-ready organizations will have a clear understanding of:

What they stand for?

Why they exist?

Such organizations will effectively use purpose to cement the connection between employees and other stakeholders to appraise their business choices.

Source: McKinsey and Co.

Imperative 2: Sharpen your value agenda

Value agenda helps an organization focus on its efforts to instil a sense of what really matters. It also allows the organization to differentiate itself from others—the results are robust and hard to replicate. 

Imperative 3: Use culture as your’ secret sauce’

Culture is that unique set of behaviours, routines, symbols, and experiences that collectively describes “how the company run things.” Culture shapes the firmness of organizational health and fuels sustained outperformance over time for the most successful companies. 

Imperative 4: Radically flatten structure

Future-ready organizations structure themselves in ways that make them fitter, flatter, faster, and far better at unlocking value – they require models designed, nourished, and developed around people and activities. Progressions in technology mean that managers can become real mentors and enablers—not micromanagers. 

Rethinking structure means rethinking teams: Google follows a “non-zero-sum” management approach. The development of lines of communication running in all directions is more prominent than reporting relationships. Such teams bring together cross-functional skills and a wide range of experience while avoiding the usual baggage with more hierarchical mindsets. The teams can act fast because they are flexible. They form, disband, reshape, and experiment as they learn lessons, make and correct mistakes, and try new approaches.

“Instead of saying “I have an idea,” it must be, “I have a new hypothesis, let’s go test it, see if it’s valid, how quickly can we validate it.’ And if it’s not valid, move on to the next one.”

Microsoft CEO Satya Nadella describes hypothesis testing. 

Imperative 5: Turbocharge decision making

Many companies will need to reset their default mode by developing a bias for action and differentiate between crosscutting and delegable decisions to prepare for the future. It requires a system to appropriately allocate actionable and decision making to the right executives, teams, individuals, or even algorithms.

Imperative 6: Treat talent as scarcer than capital

Organizations must consider three core questions: 

  • What talent do we need? 
  • How can we attract it? 
  • How can we manage talent most effectively to deliver on value agenda?

Creating an attractive destination for top talent means fostering an inclusive employee experience. This influences whether employees stay and thrive, which in turn affects the company’s bottom line. Employees that perceive lack of inclusions turn down a job or do not pursue. 

Imperative 7: Adopt an ecosystem view

Future-ready organizations view partners as extensions of their ecosystem. These relationships help to develop high levels of trust and mutual dependence to share value and let each partner focus on what it does best. 

For example, in 2014, Tesla made a radical decision to open-source its patents and encourage other companies to use its intellectual property. Tesla recognized that it couldn’t grow without partners that would build charging stations and offer services to create the infrastructure to support electric vehicles. By putting itself at the centre of a burgeoning ecosystem of partners, Tesla laid the groundwork for its own explosive growth.

Imperative 8: Build data-rich tech platforms

Data is a serious business for Future-proof companies. Data has moved beyond the boundaries of merely reporting about the business or answering a business question. Data is the business. Future-ready companies understand that data can continually empower decisions and the value agenda in unexpected, yet promising.

Imperative 9: Accelerate learning as an organization

Companies need to get learning right to fuel their talent engine and create an empowered workforce that’s fluent in the art of “fail fast, learn, repeat.” High-performing companies promote a continuous learning mindset that encourages and supports people to adapt and reinvent themselves to meet shifting needs.

Experiment-and-learn environments encourage accelerated personal growth and improvement for employees. Getting to this level requires instilling a growth mindset, curiosity, and an openness to experimentation and failure. 

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